For HOAs, implementing universal rules and expectations is part of what helps a community thrive. To structure these, every association has three types of governing documents: Covenants, Conditions & Restrictions (called “CC&Rs”), Bylaws, and Rules & Regulations.
Frequently, the function of these documents or the role the property management company plays in implementing them can be confusing. With this article, you will learn the purpose of each document and how you can work with your association management team to develop guidelines that work best for your community.
Covenants, Conditions & Restrictions (CC&Rs)
This is a legally binding document that is officially recorded and filed with your state. Your CC&Rs cover the rights and obligations of the homeowners association to its members and vice-versa. CC&Rs often cover legal issues, such as:
- Property use restrictions
- Clearly defined maintenance obligations for the HOA and individual members
- Mechanisms for rule enforcement and dispute resolution
- Lender protection provisions
- Assessment and insurance obligations
Because this record is kept on file with the state, it can be difficult to amend and requires a vote by the membership to make any changes.
Read More: HOA Living: How to Read Your CC&Rs
Bylaws
If CC&Rs cover the “what” of the HOA, the Bylaws cover the “how.” Your community’s bylaws establish the structure of day-to-day governance of your homeowners association. This includes things like:
- Frequency of HOA board elections
- Process for nominating and electing new board members
- Number of members that serve at one time
- Length of board member service terms
- Meeting frequency and quorum requirements
- Duties and responsibilities of board members
Like CC&Rs, Bylaws are difficult to change, as they too require a vote by the membership to amend.
Rules & Regulations
Your community’s Rules & Regulations are a catch-all for the things that aren’t covered in the CC&Rs or Bylaws. These are often the rules that might need revising over time due to changes in the community.
For example, an HOA might have a rule that states no children are allowed in the community pool before noon. This rule would not be a part of the community’s CC&Rs because it might need to change seasonally, or as more children move into the community.
Rules & Regulations can be changed by an HOA board vote with review by the members of the community. Traditionally, the board will adopt a rule, then send a notice to the community members who will have 30 days to review it. After 30 days, the board will review the comments and concerns of members, considering the members’ feedback in the final decision.
Read our updated article where we break down the nitty gritty details of your governing documents.
Every Restriction Can Be Changed
CC&Rs, Bylaws, and Rules & Regulations are usually determined when a developer incorporates the community. The developer will try to anticipate the type of community they are creating, but the needs of a community often aren’t fully clear until residents move in.
And, as the years go on, property values, homeowner populations, and other factors can affect the relevance of certain CC&Rs. Therefore, it’s important to consider a refresh of these HOA documents every few years. While the core of them is likely to hold up over time, there are a few that may need to be updated.
The board of directors can consult with their association management team to determine the right time to review CC&RS and how to implement changes.
When Is the Right Time to Update CC&Rs?
While there is no standard time for an update to a community’s CC&Rs, it’s good practice to review them every four to five years. Depending on the growth and changes of the HOA, this may need to be done sooner. The goal is to ensure the CC&Rs currently speak to a community’s needs and what may need to be done to stay competitive with other properties.
Reviewing CC&Rs starts with an evaluation of common areas and amenities, state and local guidelines, and homeowner suggestions to preserve property values. Then, categorize and prioritize the pressing issues and decide if a change to the governing docs makes sense. Because an official change requires conducting a membership vote, changes are typically minimal.
How to Make Changes to the Governing Docs?
Every rule, regulation, covenant, condition and bylaw can be changed–it’s simply a matter of which process is required. CC&R changes require re-filing with the state, so changes should be made sparingly and with the help of an experienced attorney to institute the right language.
CC&Rs and Bylaws often require a supermajority (67% or more) homeowner vote, while other communities may only require a majority (51%) consensus. Deciding which CC&Rs to change takes careful thought and should encourage the participation of all homeowners to vote on the change. Making them part of the process can help to limit pushback and make everyone feel part of the process.
Whereas, changes to Rules and Regulations usually only require a board of directors vote and approval before it’s communicated with the rest of the community. However, with any level of change, it’s important to ensure everyone is informed. This can be achieved through the resident portal, community boards, and newsletters.
The goal is to create change that is impactful for the community. It’s valuable to be open to revising longstanding rules that are no longer in the best interest of homeowners. Due to the time and resources necessary to make changes to the CC&Rs, it’s important to be discerning with updates.
The Role of Your Property Management Company
Your residential or association management company is an agent of your HOA, whose primary role is to increase your property value and facilitate the enjoyment of your community. They do not have a say in the development of your CC&Rs, Bylaws, or Rules & Regulations; they simply act to implement the guidelines set forth by your board.
However, your association’s management team will provide advice and guidance as you develop your community’s guidelines to ensure that you adhere to state and local laws. They can show you the risks and rewards of changing your CC&Rs, Rules & Regulations or Bylaws and provide a useful framework to develop your community in a way that serves residents today and long into the future.
Having everyone aligned toward the same vision and goals promotes a strong sense of community. Homeowners all want to protect their property values and ensure they have a great place to live. With accurate and relevant CC&Rs, Bylaws, and Rules & Regulations, this can be achieved.