HOA Governing Documents

Associations are governed by several documents, perhaps the most important of which is the Covenants, Conditions & Restrictions (CC&Rs) of the common interest development.  The CC&Rs, among other things, set forth the duties and responsibilities of the individual owners and the Association, restrictions on what can be built and maintained on the property, and how the duties and responsibilities can be enforced.  CC&Rs describe boundaries of areas owned in common and what is individually owned.  They often describe exclusive use common areas and easements.  Some CC&Rs can be very specific and establish such things as heights and sizes of buildings allowed, parking restrictions, colors of paint and window coverings, particular species of plantings for landscaping, and what can or cannot be placed in yards or patios.

 

CC&Rs should not be confused with Bylaws, which dictate corporate governance details such as terms of office for directors, how elections are held, and times and places for meetings, or with Articles of Incorporation, which establish the official existence of the mutual non-profit corporation with the state.  

 

What sets the CC&Rs apart from other governing documents is the fact that the CC&Rs are recorded on the property.  They are part of the title report and run with the land, binding every owner of the land on which they are recorded.

 

It is rare to find an owner who has read the CC&Rs thoroughly before buying the property, or even after owning the property for years.  It is often not easy reading, and can require legal interpretation.  Yet, the buyer/owner is as bound by the terms of the document as if he/she had personally negotiated them and eventually signed the final document.  Every party who buys the property is deemed to be on notice of every detail in the CC&Rs.

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HOAs, regardless of their size, need a formal structure. They need it in order to function in the best way possible for their residents. By having HOA governing documents, it is easier to resolve potential disputes that may occur down the road. Whether you are on the board of your HOA or simply a member, it is important to understand the HOA governing document hierarchy of your association. This hierarchy includes HOA CC&R documents, HOA declaration, and other governing documents, rules, and regulations that we’ll cover here.

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An Overview of HOA Governing Document Hierarchy

The HOA governing document hierarchy is important to every HOA. While each document has an important purpose, some will take priority over the others. HOA governing documents are put in place to control the operation of the association along with the common interest development that the HOA was formed to manage.

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Typically, the documents that are included in this hierarchy are:

• Federal, State, and Local Laws

• Declaration of Covenants, Conditions, and Restrictions (CC&Rs)

• HOA Articles of Incorporation

• Association Bylaws

• Operating Rules & Regulations

With several extensive documents providing a framework for an HOA, some priority needs to be established. The higher the document is in the hierarchy, the more authority it usually has, with exceptions. For example, the provisions in the law will have priority over the CC&Rs of an HOA.

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Sometimes, though, provisions within the same document may conflict with each other. In cases like these, certain rules of interpretation apply to resolve these conflicts.

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Federal, State, and Local Laws

No governing documents in an HOA take precedence over federal, state, and local laws. When creating HOA governing documents, it is important to have a working knowledge of the local laws where the HOA is located. Local laws are important, and they also need to be combined with the Rules of Interpretation when there is a conflict between the local law and governing documents of an HOA. The law will always supersede any rules laid out by the community.

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The law has the ultimate authority. That is, the law shall prevail if there is any sort of conflict between its provisions and those of the governing documents of an HOA. However, there are a few provisions where the law explicitly defers to the governing documents. These are the only exceptions to this level of hierarchy.

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Next, the act establishes the authority of the Declaration of Covenants, Conditions, and Restrictions, also known as CC&Rs or simply the declaration. In any case that the articles of incorporation conflict with the declaration, the latter shall prevail.

Similarly, the next provision sets forth the authority of both the CC&Rs and the articles of incorporation over the HOA bylaws. In the hierarchy, the CC&Rs and articles of incorporation shall prevail over the bylaws in case of conflict.

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Lastly, the act establishes the place of the HOA operating rules in the hierarchy. It’s the governing document with the least authority in the hierarchy. As such, the operating rules get overridden by all the other documents. If there’s any conflict between the HOA operating rules and one or more of the bylaws, declaration, articles of incorporation, or the law, the provisions in the operating rules shall yield.

 

1. Declaration of Covenants, Conditions, and Restrictions (CC&Rs)

The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) is a document stating the division of power along with the rights and responsibilities between the HOA and its members. CC&Rs also usually contain provisions related to assessment obligations of its members, association and member maintenance responsibilities, architectural control powers, association enforcement authority, dispute resolution, property use restrictions, and insurance requirements.

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When it comes to HOA violations, these are typically what members are running afoul of. CC&Rs set the stage for the nature of the relationship of authority between the HOA and residents. Generally, CC&Rs have the most authority, right below the local law.

That means the provisions in the CC&R prevails over those of any of the other governing documents, except for the law.

 

2. Articles of Incorporation

The Articles of Incorporation are filed with the state that the HOA is registered and essentially define the legal name, address, and corporate status of the HOA. It also has provisions that define some of the functions of the association, as well.

 

The articles of incorporation sits under the law and the declaration in order of hierarchy. This means that the provisions of the articles of incorporation prevail over those in the bylaws and the operating rules. However, the law and the declaration both overrules the articles of incorporation, in case of any conflicting provisions.

 

3. Bylaws

The Bylaws are terms that define how the HOA is going to function as a corporation. Bylaws can name who will be directing certain aspects of the HOAs responsibilities. Bylaws will determine the number of their directors, frequency of elections, and any other procedures that are specific to the HOA.

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The provisions in the bylaw overrides only those in the operating rules, in case of conflict. Aside from the operating rules, all the other governing documents have precedence over the bylaws.

 

4. Operating Rules & Regulations

The Operating Rules & Regulations are developed by the board of the HOA to determine how the day-to-day procedures will operate in the HOA. Topics of these rules can range from architectural specifications or club house rules. Generally, the rules and regulations will be the lowest in the hierarchy of documents.

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The operating rules are the lowest in the hierarchy of governing documents. In case of any conflict in the provisions, any of the bylaws, articles of incorporation, CC&Rs, or the law will prevail over the operating rules.