HOA Documents: What are they and how to properly organize
For first time HOA members, or even existing members learning the fundamentals of their HOA, many aspects of the association membership process feels overwhelming and extensive. Being able to assist and resolve any confusion about HOA documents easily is something that will help any board member to save precious time and see happier homeowners.
What will you find in this article?
- The Basic HOA Association Documents
- How to Organize Your HOA Documents and Save Time?
- The HOA Document Hierarchy
- How Much Does It Cost to Request HOA Documents?
- Are HOA Documents Public Record?
- A Comprehensive List of HOA Documents
Becoming a member of an HOA, either for first time association members or even homeowners looking to find a new community to move into, should be something that residents look forward to. With that in mind, the most capable board members are the ones that never cease to ensure this experience for their residents.One of those foundational steps in that process is maintaining and providing HOA documents to members who request them. Every single resident of an HOA should have both access to and comprehension of the entirety of the HOA documents that pertain to them; everything from the foundational rules and regulations of the HOA upon its formulation down to the HOA’s insurance policies. These documents aren’t just so that board members can maintain organization with daily operations or in accordance with state and local laws. The documents also allow residents, new or existing, a fully-realized representation of their HOA’s structure, especially if a conflict within the association were to arise involving the information in the HOA documents.As the property owners, the HOA has a duty to maintain and release certain HOA documents at any time to both prospective purchasers and existing homeowners upon request, and every homeowner within an HOA has a right to a copy of these documents upon request. Along with the legal implications of providing these documents to HOA members, there is also the aforementioned associative responsibility that board members have to their residents to make sure there is no stone unturned with any questions or concerns they may have.
The Basic HOA Association Documents
Luckily, detailing the foundational aspects to proper documentation and record-keeping is what will be covered here, and there is no better place to start than with the essential groups of HOA documents that all associations should have, and all residents and homeowners should have access to. Every association, without fail, should provide the ability to access this list in its entirety so that residents have a complete understanding of how and why their respective HOA functions the way that it does.
Federal, State, or Local Laws
The importance of full documentation of federal, state, or sometimes even local law is that it allows residents to know all of the ways in which their HOA must function in accordance with those laws. Governmental rulings and ordinances will almost always supersede all other HOA rules or regulations, and it is important for board members to provide their residents for several reasons. One, providing access to these documents to HOA members allows for full transparency on what board members can or cannot legally enforce within the community, if or when certain rules or regulations are disputed or called into question. Providing the federal and state laws that the HOA must adhere to also allows prospective and existing HOA members to see how and why other HOA governing documents were put into place, and how those documents mesh with governmental rulings.Lastly, providing these also allows board members to maintain full transparency with residents, especially with laws and regulations that mostly overrule their own rulings.
The Articles of Incorporation
The Articles of Incorporation for any association are its founding documents, and the HOA documents that are established once an HOA officially becomes a non-profit mutual benefit organization by the state it resides in. These documents can be beneficial for board members to provide because, although rarely of use in any hypothetical dispute between the board and its members, they establish things like:
- the date the association was founded upon
- its purpose as an organization
- the official location of the HOA if needed for legal purposes.
The Declaration of Covenants, Conditions, & Restrictions (CC&Rs)
CC&Rs allow residents to understand, in full, how every single restriction and limitation regarding both their property and the community at large works is a necessity.
CC&R’s are the backbone of the HOA, and making sure residents are clear on every possible restriction, from parking conditions to lot management to amenities usage, will provide board members and residents with as much clarity and stable communication as possible if issues arise. It also allows for any potential disputes of CC&R’s by association members to move forward under the grounds that all parties have a full understanding of the disputed restriction. The last thing that should occur is for a dispute to arise because a resident didn’t even know a specific CC&R existed in the first place.
These documents are important for homeowners because they help show how the board functions for residents who were previously unaware or uninformed. Since most of what comprises an HOA’s bylaws revolve around everything from board member elections to officer duties, it is important to make sure residents not only have full access to how the governing body of their community delegates roles to its board members, but also so that they are fully aware of how their role as a community members functions in alignment with the board. Providing bylaw documentation means that members can organize effectively around events such as board member elections if a particular officer’s term limit is up, or if and when a special election to vote over other various rules and regulations arises. Fully understanding the machinations of the board members' roles means that residents, again, have full transparency on how the checks and balances are kept in order when it comes to those in board members positions like yourself. There is also an exhaustive overview of the functions and importance of bylaws that you can find here.
The HOA’s Operating Rules and Regulations
In short, these particular regulations are the ways in which the aforementioned CC&R’s will be implemented and regulated by the board. These are also the rules and regulations that concern most of the daily operational rules, such as amenity hours or parking specifications. The documentation provided around these is crucial as well, because while it helps to know what the restrictions are for something such as what a resident can build on their property, providing them with how exactly those restrictions will be enforced, is key. These are also of the utmost importance in the event that a particular CC&R were to be violated, because the homeowner would have a full understanding of the impending penalty they would receive, even if they still decide to appeal it. Providing documentation like this to your residents removes any of the potential discrepancy that might happen if you and your board interpret the CC&R differently than the resident, strictly because the resident didn’t have access to that information.
How to Organize Your HOA Documents and Save Time?
Besides having all the necessary documents properly created and stored, it’s very important to organize them, because homeowners and residents will need them for their daily needs, and will certainly go ask help for the board or manager. First of all, the board should store the physical documents in a dry and safe area, and preferably maintain the records ordered by date and category, so it’s easier to find whenever needed. Alternatively, sometimes their management company will store some of the records.But even maintaining everything organized in a storage room, relying just on physical storage will not avoid:
- Homeowners asking to see documents
- Board members/managers needing to spend time going to the storage room
- Inefficiency, because the homeowner will not be able to check the document when or where he needs
- Unnecessary stress and unhappy homeowners
And here is one of the key aspects for board members to improve the access residents have to the HOA documents they need, as well as provide better communication to their homeowners about where to find them.
Some basic steps board members can take to supplement this process, and consolidate these documents into online access is to simply create an accessible Dropbox folder or Google Drive account that either provides residents access to basic HOA documents such as CC&R’s and bylaws, or provides them the proper contact information to request further document inspections for anything not included on a shared file. With the entire world continuing to pivot digitally in terms of paperwork, it only makes sense for board members to remove the unnecessary headache of trying to maintain and supply paper documents to association members when digital copies can replace them with ease. Going one step further, board members should also consider using an HOA app, as an even more comprehensive, and fully realized approach to storing and providing any and all necessary documentation. One of the foundational benefits of an app like TownSq is to streamline communications between board members and residents in cases just like the ones that arise when homeowners need access to HOA documents as quickly and efficiently as possible. Solution-based apps such as TownSq are designed not only to provide homeowners with all the document resources they need, but they are also specifically designed to meet the needs of board members who need help in knowing how to properly use online storage as well. Some clear benefits are:
- Save a lot of time and stress for board members and managers
- Share private documents in a secure system with registered users only
- Homeowners being able to access HOA documents anytime and anywhere
- Folders’ privacy customized according to community’s roles, like board members, homeowners, tenants and so on
- Private folders for end-users
- Easy to search for files
- Integration with public hoa website, being able to share specific files as you like
Knowing how and where to keep your association’s most fundamental records, and then streamlining that process back to the residents as effectively as possible is inherently challenging. An app specifically designed to help strengthen that relationship between HOA communities, from both sides, is oftentimes all that it takes to satisfy residents in need and board members looking to help however they can.
The HOA Document Hierarchy
Amidst all of the basic HOA documents board members should be making sure residents have access to, board members must also make sure their homeowners understand the hierarchy of these documents, or the succession these documents follow to help define which laws, rules, or regulations overrule which. The hierarchy’s value is how it provides context to each category of HOA documents so that residents, if they are searching for particular documentation, know how to interpret them while taking into account how they supersede or are overruled by other documents. In other words, if disputes between your board and a homeowner arise over a particular issue within the documents provided, both parties can look to overruling documents for help in potentially resolving that dispute. The hierarchy of HOA documentation is as follows: (Can we have an illustration with the hierarchy here?)
1.). Federal, State, and Local Laws
Once again, all HOA rules and regulations will almost always be overruled by federal, state, and local laws (in that order), mainly because it is within those laws that the HOA was able to be created.
2.) The HOA Plat/Map
The HOA’s plat is a drawn-to-scale map of the land with which the association is built on, divided and assembled by real estate developers to help organize the various lot characteristics present in the piece of land. In other words, the plat is the intended design of the HOA, and those lot characteristics can include anything from the development’s boundaries to park or facilities designs within the community, or even the finer details such as where streets, right of way’s, and easements will be located. The plat’s placement near the top of the hierarchy also has to do with its inherent effect on the association’s CC&R’s, and each plat’s design plays a direct role in creating the outlines for many of a respective HOA’s eventual CC&R’s. Oftentimes, residents will be able to find particular covenants written into the plat itself, detailing rules for any gray areas within the lot where either the board or residents might have questions as to who is responsible for governing it, such as a strip of land outside a homeowner’s lot that might require maintenance.
3.) Declaration of CC&R’s
As previously mentioned, the important thing to note about the Declaration of CC&R’s placement over other regulatory documents is how those rules have ultimate authority over almost any other association regulations outside of governmental laws and the association’s plat. Due to how early on in the process of founding an association that CC&R’s begin to form, their importance and power are directly tied to the foundation of any HOA.
4.) Articles of Incorporation
While important in establishing the HOA to begin with, the power of the articles over most documentation is minimal, strictly because there isn’t much governing-based documentation included in this paperwork. Although necessary to have, it is important for board members to help residents understand the articles’ limited effect in overruling most of the other laws.
The reason for an associations bylaws ranking lower on the document hierarchy is mainly due to the aforementioned nature of their creation; because the bylaws focus primarily on the inner workings of the board, most of their power can be overruled in the event that those bylaws come in direct competition with resident-related rules.
6.) Rules and Regulations
Similar to the bylaws, the power of the daily rules and regulations of the HOA can be overruled by every other founding document strictly because those rules are a lot more fluid in nature, and their interpretation and implementation as rules for the community are much easier to change than items like CC&R’s. These operating rules are, by design, focused on current regulations, with the mindset by the board that they can be altered, or at the very least taken into consideration to be altered, if they directly conflict with any documents higher in the hierarchy.
How Much Does It Cost to Request HOA Documents?
Whether or not the association can charge its members fees to request HOA documents isn’t a one size fits all answer, and much of it can vary depending on either the state the association resides in, or the rules established by the HOA, concurrent with the law. What this means is that it is important, as a board member, to know your state’s laws regarding HOA document disclosure, and how your association handles document requests, whether with fees or not. For most associations, a small fee is usually charged to residents requesting documents, which typically includes copying and mailing charges for providing the documents. These costs, as mentioned, vary from state to state, with such states like Florida permitting charges only after 25 pages of documents have been requested or if labor hours reach a certain level, while others like California may charge strictly based on the labor costs of providing the documents until they reach a certain level. Residents should be made aware of these charges beforehand as best as possible. The rules are not quite the same, board members typically have more liberty to inspect HOA documents without cost because of their position within the association. Therefore, as a board member, it remains of the utmost importance to respect those liberties that other residents do not have, while also doing your due diligence to make sure residents have access to requested documents, within reason, in as responsible a fashion as possible.
Are HOA Documents Public Record?
This is another complex question that once again revolves a lot around state laws as well as what the association is required, or not required, to disclose. Although it is beneficial for associations to provide residents with as much access to HOA documents as possible to avoid conflicts and increase understanding between the board and residents, access to some documents is either not required, or won’t be permitted under most normal circumstances. This is where the differences between the aforementioned basic HOA documents, and the official list of all the documents required by an HOA to maintain, become apparent. For instance, most, if not all, of the basic HOA documents should be accessible by the public, and board members should not only be aware of that fact, but encourage your residents to request access to them. Even official documents such as the HOA’s insurance policies, third party contracts, or
A Comprehensive List of HOA Documents
Providing homeowners with the basic HOA documents, as well as the establishing the hierarchy of those documents is important, but it is also crucial they know what they have access to, and what may require them to request at a later date in terms of documentation. These can range from accounting recordings for the HOA, to insurance information, and many of these documents can pertain to either prospective or existing homeowners within the association. Regardless, the importance of detailing this list lies in making sure board members know exactly what is required for their association to either have present for association members to receive, or for what members can request a copy of later on.A more comprehensive list of official HOA documents involving both prospective and existing association members is as follows:
- A full list of the aforementioned basic documents, CC&R’s, bylaws, rules, and regulations, along with a comprehensive list of any amendments to these documents
- A detailed explanation of the HOA’s insurance policies including any and all details for how residents will pay into the HOA’s master policy, as well as any documentation that pertains to how an individual resident’s insurance should be filed. Details regarding the HOA’s master policy should be all-encompassing in terms of what homeowners will be considered liable for within the community, how and where that liability insurance will be paid, as well as when those payment dates should be.
- For prospective homeowners prior to buying, a comprehensive Demand Statement detailing any unpaid homeowner’s fees, or unit and lot violations made by the previous owner, that the prospective homeowner may in fact be responsible for financially.
- For existing residents looking to close on their property and leave the association, a full detailing of any and all transfer fees required by both the HOA and the state to switch ownership of the property into the name of the new homeowner. This can also potentially be a document prospective homeowners buying into a property may have to do if the selling homeowner is not responsible for it.
- All previous insurance records and history regarding any prior changes or amendments to the association’s insurance master policies.
- All prior association financial expenditures and invoices from the last three years.
- All association financial reports, including any audits, or governmental and management company reviews from the last three years.
- All association contracts, past or current, associated with any financial gain or expenditure made by the board within the last three years.
- All accounting information regarding each association member, including their official names, the HOA documents that provide their annual dues payment dates and subsequent information, as well as any potential balances or penalties currently on their respective account.
- A full and exhaustive list of every single association member, including their name, address, lot or unit (if the property is a co-op or rental), and contact information. This list should also include all board member contact information as well, and potentially in a separate document regarding strictly the board members.
- Any and all third-party contracts such as management companies assisting with property regulations, outside maintenance companies, or vendors of any other kind.
- Any and all records of judgments or liens made by, or against, the association. This is a particularly important document because it ensures that crucial actions like a lien on a property, especially if performed on behalf of the association, are documented and fully detailed in the event that either a resident in a similar future situation, or an outside legal party, were to request those documents to resolve that future conflict.
- If the association permits property rentals, then all recorded rentals should be officially documented as well.
- All association member election materials, including voting procedures, election requirements, officer duties and capabilities, proxy rules and restrictions, ballot submission requirements, and, if voted upon, rules regarding membership approvals for prospective residents.
- Any and all board member documentation involving board meetings, an exhaustive accounting and recording of the minutes, as well as any special items of note that may affect subsequent documentation within the association.
- If necessary, any other HOA documents involving miscellaneous rules or regulations not already specified within the CC&R’s, bylaws, or operational rules documents.
Anything involving association voting procedures are also permitted for inspection by homeowners.However, any official documents that involve either legal matters within the board, or documents that involve a sensitive or litigative matter between the board and another association member, are not to be disclosed to the public, even upon request. In other words, members should not have access to other members’ personal files. It is important for board members to know what should or shouldn’t be disclosed, especially when the documentation involves the privacy of another resident, or their private and financial information.
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