Community Association MemberS

The following is a brief introduction to the basics of community associations and their management. Although this introduction doesn’t cover everything, it discusses the main principles so as to help those who are unfamiliar with associations better understand community association living and what is involved. We hope you find the following information useful.

Condominium and homeowners’ associations are created to establish and maintain the envisioned quality and sense of community living as outlined by the governing documents of the association by maintaining the physical assets, managing association finances, enforcing rules, keeping and safeguarding the documents, records, and files of the association, and planning for the future of the community. Protecting property values of the common areas as well as those for the privately owned lots or units are a major goal and benefit of any properly managed community association, and the community association, through its board of directors, directs the day to day functions of the association and the management thereof toward these ends. The responsibilities of a community association are various and many, and include, but are not limited to: maintain the common areas (used or shared by and beneficial to all) and in some instances limited common areas (used by or beneficial to more than one but not all); maintain community amenities like private roads, vehicle gates, play fields, green belts, walking trails, swimming pools, clubhouses, ball courts, and the like; forecast and budget for future maintenance, improvements, or replacement expenses; solicit competitive bids and manage and supervise vendors; assess and collect dues and pay bills; monitor, control, and document expenses and income; reconcile and balance bank statements; work with the association’s certified public accountant on annual audits; act as the legal custodian of the community association’s records; help ensure the association has the proper insurance and required licensure; have a working knowledge of applicable real estate laws and regulations; conduct periodic site and violation inspections, issue and mail violation letters and other correspondences to members; levy fines and apply late fees; cause application of property liens and in rare instances foreclosures; serve proper notice of and conduct regular, special, and annual meetings; field and document member complaints, requests, and questions; help deliver ACC requests from members to the ACC (Architectural Control Committee – community volunteers who help regulate member changes to their property); and enforce the community’s rules reasonably, fairly, and equally.

The governing documents of the association contain specifics about how the association is to be created, operated, and dissolved. These important documents consist of but are not limited to: the Articles of Incorporation; the By-Laws; and the Covenants, Conditions, and Restrictions (also known as the CC&R’s). These documents are most often initiated by the original developer of the property (also known as the declarant) who is also usually the first board of directors of an association. A newly developed community’s association remains under developer/declarant control until a certain date or until a certain number or percentage of units or lots are sold. Once allowed or required by the governing documents control of the association is transferred to the general membership who then elects a board who then makes the decision to keep the current declarant hired management (if any was used), hire a different company, or to self manage. Some even opt for what’s called “financial only” management where a management company or accounting firm does only the accounting functions for the association without any actual management of property or physical assets.

The Articles of Incorporation legally creates the nonprofit association itself. It names the association, lists original directors, discusses director indemnification and limits their liability, and discusses procedures to dissolve the association. The By-Laws are mainly concerned with procedural rules, especially those about meetings, elections, and voting. The Covenants, Conditions, and Restrictions (CC&R’s) define the limitations and requirements of what an individual member can’t and must do with their property. For most members the most important and pertinent things to know are found in the CC&R’s. Some communities also have Rules and Regulations (also called R&R’s) or a Good Neighbor Policy (also known as the GNP) either of which usually further define the limitations and requirements in the CC&R’s and might also establish a fine structure for repeated CC&R rule violations and late fees for fine nonpayment. Being familiar with the governing documents of the association, especially the CC&R’s or R&R’s/GNP, will greatly help members understand what is expected of them and will help them to better understand the envisioned quality of community living as set forth by the governing documents of their community.

The board of directors is generally made up of four members; president, vice president, secretary, and treasurer. The president represents the board before the membership and is kind of the CEO of the board. They usually set meeting agendas and preside at all board meetings. They generally can execute legal documents for the association and they might have the right to select or nominate committee chairpersons, depending on the association. The vice president performs the president’s duties in their absence and shares some of the burden of the president. The secretary ensures meeting agendas are prepared and distributed and that meeting minutes and any related materials mentioned in the minutes are prepared. They ensure they or the manager maintains the official records properly and receives, verifies, attests to (swears to their legitimacy), and maintains voting proxies. The treasurer ensures annual operating budget is prepared and submitted for approval and ensures that all financial records and lists of delinquent accounts are maintained. The treasurer makes recommendations in regard to collections, receives and disburses funds, ensures the preparation of financial reports, and authorizes independent audits. If there is a professional manager, they are likely to prepare these documents but the treasurer is ultimately responsible for them.

Some boards of directors are willing and able to spend the time to become very knowledgeable and involved, and do a great job managing their communities without using a management company. However, most find using a professional association management company the best route and enjoy this helps save them valuable personal time and insulates them from certain, possibly uncomfortable, tasks. For example, not everyone wants to collect dues from or enforce rules to their neighbors and a management company can really ease the volunteer board’s exposure in these regards. Moreover, a good management company will be an experienced, knowledgeable, and professional independent third party administrative specialist who helps ensure the continuity and consistency of association management as envisioned by the governing documents as control of the association and priorities change from board to board.

Each community association is different and it’s important its members have at least a working knowledge of their association’s specific governing documents. Simply due to the fact that one lives or owns a property in a community with an association each member (including tenants and guests) agrees to have acknowledged receipt of and to abide by the governing documents - especially the CC&R’s. All members should have been provided a copy of the governing documents at or before closing the sale of their property. If a property is an allowed rental (some communities have limits) it is highly advisable for the association member to explicitly provide their tenant with at least a copy of the CC&R’s/Rules and Regulations/Good Neighbor Policy and ensure they know and agree to follow them by incorporating the pertinent association documents into the signed rental agreement or lease as a part of the agreement terms or as an acknowledged exhibit or otherwise ensure the lease or rental agreement is in congruence with the CC&R’s. This can help make the tenant a better tenant, the property owner a better association member, and can help all to better enjoy community association living.

If you have the time please become involved in your community association and attend meetings, offer your ideas, share and discuss issues, and even volunteer if possible. It can be a very rewarding experience. Also, please thank your current board members and community volunteers when you have the chance. They do a tremendous service for the community and often it goes underappreciated.

Below you will find online forms to update account status and contact information, and a general question and answer section for very common community association member concerns. We hope you are able to become involved in your community association, and maybe we’ll see you at a meeting soon.