If you’re considering buying into a Home Owners Association (HOA) in the city of San Francisco, due diligence upfront is the name of the game. Understanding what you’re marrying into is so very important, after close it’s too late to discover.
HOA: Understanding CC&R’s, Bylaws and Regulation
Your homeowners association has three types of governing documents: Covenants, Conditions & Restrictions (called “CC&Rs”), Rules & Regulations, and Bylaws. 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 management company 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 obligations
- 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.
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 Bylaws or CC&Rs. 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 that 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.