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Real Estate News and Advice |
July 3, 2008 |
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The 3 Rs of Homeowner Associations: Rules, Regulations & Resolutions
by Richard Thompson
Every community association has various methods available for establishing acceptable community standards. As a benchmark, community standards must stand the test of federal law: For example, the board cannot enact a rule that flies in the face of the Fair Housing Act. Sometimes community standards or rules are clearly defined in the governing documents, also called the Declaration and Bylaws or CC&Rs (Covenants, Conditions & Restrictions). More often, however, these documents only provide a framework or starting point, leaving the "fleshing out" process up to the Board. This is done to allow flexibility and customization of policy. The Board may use either rules and regulations or resolutions to accomplish this goal. So what’s the difference? Rules and Regulations should be limited to addressing rules of conduct in the common or limited common area property. Appropriate topics include:
When adopting new or revised rules, it’s wise for the Board to solicit owner input for a greater degree of compliance. And always make sure to follow the dictates of governing documents when adopting, amending or revoking rules and regulations. Resolutions are the preferred method of establishing procedures for the Association. Resolutions come in two flavors: policy and administrative. Policy Resolutions define acceptable community standards. An example of a policy resolution: Many governing documents are unclear with regard to maintenance responsibilities. Who repairs a water supply line after it enters an owner’s unit? Who repairs damage from a flood originating in an upper unit? There are many variations on this theme that could be answered in a policy resolution that defines association versus owner maintenance responsibility. Other significant and critical policy resolutions deal with money collection, parking, architectural guidelines and enforcement procedures. Administrative Resolutions define procedural guidelines, like how to hold more effective board and homeowner meetings. The mechanics of formulating a resolution: The resolution should first cite the relevant provisions of the governing documents and any applicable state statute, especially those sections which give the Association authority to establish policies. Following the authority section are the details of the resolutions. It is advisable to circulate any proposed resolution to the membership for a minimum 30 day period for comment before the Board votes on it. Once approved, it should be dated and signed by the Board President and the Secretary. For more on this subject, see www.regenesis.net A word about amending the governing documents: As opposed to rules, regulations and resolutions, amendments must be approved by a required percentage of the owners dictated in the governing documents, often 75% or more. Reaching this majority is not easy so amendments should not be undertaken lightly. The process is relatively costly and time consuming. If, however, the documents are unwieldy or in violation of the law in some respect, amending may be prescribed. Consult with an attorney knowledgeable in homeowner association law. Rules, regulations and resolutions help solve a frequent problem in homeowner associations: inconsistent enforcement that results from frequent board turnover. Inconsistent enforcement may lead to permanent unenforceability of a particular restriction. Rather than reinventing the wheel every time a problem arises, thoughtful rules, regulations and resolutions can be crafted that answer most questions so the Board only need deal with those periodic issues that fall outside the norm. For more information on this subject, see www.Regenesis.net. Published: February 23, 2000 Use of this article without permission is a violation of federal copyright laws.
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