An Architectural Guideline: An architectural guideline is a rule that applies to the appearance of an owner’s lot or the exterior of his or her unit or improvements. Development of architectural guidelines should begin with a review of the governing documents to determine in what areas the board can allow a change. Usually a community association’s declaration, CC&Rs, or master deed provides for architectural changes. It is in the community’s best interests for a board to establish written architectural guidelines for two reasons: Written guidelines indicate to owners what types of changes will be allowed under normal circumstances, Written guidelines are a way to avoid claims of arbitrary or selective treatment of owners.
Articles of Incorporation: A community association’s corporate structure is established when a developer sets up the association. The developer files articles of incorporation—sometimes called a corporate charter—with the appropriate state corporation agency. The articles of incorporation bring the corporation into existence, define its basic purposes and powers.
Board of Directors: The homeowners or condominium association is a corporation and therefore a governing body that is required to oversee its business. The board of directors is elected by the property owners, or as otherwise specified in the bylaws. The limitation and restrictions of the powers of the board of directors is outlined in the association governing documents.
Bylaws: The bylaws are the guidelines for the operation of the homeowners or condominium association. The bylaws define the duties of the various offices of the board of directors; how elections will be handled; the terms of the directors; the memberships’ voting rights; required meetings and notices of meetings; and the principal office of the association, as well as other specific items that are necessary to run the association as a business.
Committees: Role and Responsibilities of Committees usually a community association’s bylaws—and sometimes its declaration—will name certain committees that are required, allow for the appointment of other committees that may be required from time to time role Community association committees typically consist of owners appointed by the board of directors. The role of these committees is to assist the board in meeting its responsibilities, broaden the community’s input on decisions by serving as a means of gathering owners’ opinions and attitudes, training ground for future leaders, means of explaining board actions to the community, perform research and prepare recommendations for the board. The number and type of committees will depend on the size of the community and the complexity of its activities. The more activities a community is involved in, the more a board may need additional groups to collect information, develop recommendations, and carry out activities.
Common Area: A common area is designated on the recorded plat of the community as land and community assets that are not sold to an individual owner. In a planned community, the common areas are owned by the association, whereas in a condominium association the common areas are owned by all owners in undivided interest. You will also see the term “limited common areas.” A limited common area is common area that is for the exclusive use of fewer than all the owners of an association.
Conditions & Restrictions (CC&R): The declaration of covenants, conditions and restrictions (CC&R or DCCR) are the governing legal documents that set up the guidelines for the operation of the planned community or condominium. The CC&R was recorded by the original developer in the county in which the property is located and is included in the title to your property. Failure to abide by the CC&R may result in a fine to a property owner by the association.
Courtesy Letter and Compliance Issues: From time to time, a rule or covenant may not be complied with in an association. This compliance issue is either spotted during a routine community inspection or reported by another homeowner. A Courtesy Letter is always issued on the first occurrence of any compliance issue. This is an attempt to discover possible reasons for the compliance issue, as well as request that the homeowner address the compliance issue in a reasonable amount of time. If the infraction is not addressed, a second compliance letter will be sent to the property owner. If no response is made and the infraction still exists, a hearing may be set with the Board of Directors. Additionally, the Board of Directors may impose fines until the matter is resolved.
Declarant: The development company and its successors and assigns.
Fee Simple: In real estate, this is when the buyer acquires entire ownership of the property including the land and the building in full.
Governing Documents: The purpose of a community association’s governing documents is to provide for the legal structure and operation of the community. The documents define the rights and obligations of both the community association and its owners, create a binding relationship between each owner and the community association, establish the mechanisms for governing and funding the community association’s operations, set forth rules and standards for the protection of both owners and the community, enhancement of property values and promotion of harmonious living.
Homeowner and Condo Associations: It is a corporation registered with the state and managed by a duly elected board of directors. Most associations are registered as nonprofit corporations. Its purpose is to maintain all common areas and to govern the community in accordance with the provision of the governing legal documents: declarations or covenants, conditions and restrictions (CC&R), bylaws and articles of incorporation. The corporation is financially supported by all members of the homeowners or condominium association. Membership is both automatic and mandatory.
Management Company: A professional management company is contracted by the board of directors to properly maintain the common areas and conduct the business affairs of the association. A management company provides services such as: collection of assessments; overseeing of subcontractors; obtaining bids for subcontracted services; providing financial statements and collection reports, as well as serving a general clearinghouse for problem solving; communicating with property owners and the board of directors; and serving in an adviser capacity. The management company reports directly to the board and all decisions are made by a majority vote of the board of directors. (Please note that services provided by a management company will depend on the individual agreements between a community association management company and the client association.)
Rules: A rule is a specific statement of required behavior and being noncompliant with such behavior carries a penalty. In a community association, rules and guidelines outline expected behavior, identify limitations, and govern the community in three areas. These areas include:
- The use of both common property and individual lots or units. Rules and guidelines are developed in this area to promote conformity and harmonious living.
- Changes in the architecture, the construction, or the appearance of lots or units. Rules and guidelines are developed in this area to establish and preserve a harmonious design for a community and protect the value of the property
- The behavior of residents (owners and tenants), guests, and other visitors. Rules are developed in this area because of the possible impact one person’s behavior may have on another person.