Sunday, 20 August 2017

What are HOA CC&Rs?

Written by Posted On Wednesday, 21 December 2005 00:00

"CC&Rs" is an acronym commonly used in the homeowner association industry. It means "Covenants, Conditions & Restrictions." It is used generically for any HOA rule or policy. But it's more complicated than that. In the HOA environment, there may be policies, procedures, rules, regulations and resolutions. All are necessary to do the HOA business properly. But what exactly are policies, procedures, rules, regulations and resolutions?

Policy: A policy is a standard adopted by the Board that sets out the beliefs, values and objectives that causes the homeowner association to act. (such as a collection policy, an enforcement policy, or a conduct of meetings policy). A homeowner association's policies communicate, organize, and focus the resources of the homeowner association.

Procedure: A procedure is the process that accomplishes a particular objective. For example, the homeowner association should have a clear and defined policy regarding assessment collection. The detailed steps of how this policy is achieved comprises the procedure of collecting assessments.

Rule or Regulation: A homeowner association's board of directors adopts rules, regulations or guidelines to define desired behaviors and to set limits on allowable uses of the common elements and homes or units, architectural changes and the behavior of residents and guests. Some typical examples of rules include pets, parking, noise and use of HOA facilities.

Resolutions: A resolution is a method of formalizing a decision made by an homeowner association's board of directors. Resolutions are used to adopt policies, procedures, rules and regulations or to clarify ambiguous terms in the governing documents. Resolutions should include four components:

  1. Authority. The section of the governing documents that gives the board authority to adopt resolutions;

  2. Purpose. Why the resolution is needed or being adopted;

  3. Scope and Intent. Who will be affected, the reach, range and extent

  4. Specifications. A clear and complete statement on what those bound by the rule are expected to do.

So there you have it. Now you can speak like an HOA authority. CC&Rs aren't just for acronymizing anymore.

Thanks to OrtenHindman.com for contributing to this article. For more on HOA good management practices, see Regenesis.net

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Richard Thompson

Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues.

Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at rich@regenesis.net.

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