Every Homeowner’s Association is governed by a set of documents and laws (which vary from state to state). These governing documents guide how an HOA is run and “what owners must abide by.” As the governing body of an association, the HOA board of directorsis ultimately responsible for the direction of how the HOA is run — its implementation of policies and day-to-day management.
In New Jersey, the specific laws that govern an HOA “allow for a good deal of leeway in how a condo, co-op, or town home community decides to run things.” Because of this leeway, it’s especially crucial for the board of directors to understand the governing documents completely and to make sure that every resident understands the documents as well. This helps to avoid conflict, including liability issues, and creates an amicable, functioning community. Modes of communicating the purpose and content of these documents can be accomplished through well-written newsletters, welcome packets for new homeowners and social events.
Governing documents typically include the articles of incorporation, the bylaws, the Declaration of Covenants, Conditions and Restrictions (CC&Rs), and rules and regulations.
1. Articles of incorporation (or just “Articles”) refer to the literal creation of the Homeowner’s Association. The Association files Articles for “a nonprofit organization within the secretary of state where the development is located.” Usually brief, Articles are mostly comprised of basic information, such as the name of the association, its location, and its purpose. HOAs are set up as a corporation, which allows residents to take part in and enjoy shared or common-area amenities. A vital point to stress to residents is that their board of directors isn’t fighting against them, but for them, to create certain rules so that everyone can enjoy themselves.
2. Bylaws are formed to state how an association will be run, including voting rights and procedures, and rules regarding management. In addition, the bylaws will outline classes of memberships, including voting rights and provisions for member meetings. Bylaws are very important. They describe the procedures and mechanics of HOA management and decision-making and you can think of them as the rights and responsibilities of the HOA.
One of the reasons why understanding the bylaws are so important is because they oftentimes detail the length of the terms that board members can serve, as well as election procedures. Every member of the board must know their term limits, as well as familiarize themselves completely with their powers and restrictions. HOA residents must be aware of these as well, so that they can act in accordance along with the board of directors to avoid internal problems, or even lawsuits.
3. CC&Rs are a major portion of the governing documents and is crucial for the HOA’s wellbeing. In terms of development and operation, this portion is especially important for the board of directors to read and understand very carefully. Essentially, the CC&Rs are used to regulate the use, appearance, and maintenance of property. The problem that often arises here is that these laws determine what residents can and cannot do with their properties (i.e. home additions and lawn maintenance).
The CC&Rs spell out the processes for when violations occur, including internal notice and hearing requirements. When violations are not resolved, the board of directors may make the decision to bring action against the relevant resident. It’s important for the board of directors to note, however, that residents cannot be evicted, property belonging to the resident cannot be removed, and personal rights cannot be violated when attempted to control alleged violations. Residents need to understand their rights as well, so as to not create any friction, and so they know that they are being looked after and respected.
4. Rules and regulations are typically more lengthy and specific than what is found in the CC&Rs, and can cover anything from prohibiting broken cars and trash in yards to regulating the height of fences to limiting the number of swimmers in the pool. Like the CC&Rs, these rules can oftentimes cause conflicts between the board of directors and the residents. Again, it must be articulated to the residents that the HOA isn’t working against them but instead is striving to create a community where everyone can be happy. The driving force of an HOA is the common good of its residents.
It’s natural that not everyone will agree with the rules — this is unavoidable — but disputes must be avoided at all costs in order to keep the community running smoothly, and to keep it as the safe and well-kept place that everyone wants. It’s also important for the board of directors to immediately stress any changes that are made to the rules and regulations. Community newsletters are a great way to get this message across.
There are many reasons why condominium and planned developments are desirable to live — namely that there are several amenities available to residents, including security gates, private streets, pools, etc. There are times, however, residents within an HOA will feel as though they are stifled or wronged by their board of directors in terms of what they can and cannot do with their homes and surrounding areas.
In order to avoid conflict of any kind, defend against liability, and create a community that acts as a team, it’s important for the board of directors, who are ultimately responsible for the HOA’s actions, to make sure their residents understand the purpose of governing documents as well. This can be accomplished through a well written and entertaining community newsletter or a fun social event. By consistently articulating that governing documents are enforced in order to create a fair and reasonable way of living for everyone, HOAs and residents alike will be more harmonious in their community space.