HOAs, regardless of their size, need a formal structure in order to function in the best way possible for their residents. By having a formal structure in place, 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 hierarchy of your association’s governing documents, rules, and regulations.
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. Typically, the documents that are included in this hierarchy are: the local law, Declaration of Covenants, Conditions, and Restrictions, Articles of Incorporation, Bylaws, and Operating Rules & Regulations.
The Local Law
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.
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 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. 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.
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.
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.
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.
How Clark Simson Miller Can Help Your HOA
Clark Simson Miller has years of experience helping established and new HOAs alike. What makes Clark Simson Miller’s offerings unique is our ability to customize service based on factors like the location, neighborhood size, projected budget, and necessary tasks. In order to learn more about our HOA Association Management offerings, please reach out online or by calling 865-315-7505 today.