Important Terms All Association Board Members Should Know

You have just been appointed to your homeowner and community association board.  Now it’s time to brush up on your vocabulary with terms that are going to be a part of your new life as a board member.

There is a lot to remember, but this doesn’t have to be daunting. Making a list with terms and meanings, and going over them regularly, is a good way to keep these items fresh in your mind. As you progress in your tenure as a board member, these terms will become second nature.

Below, you will find some important items to add to your vernacular, brought to you by FirstService Residential, the industry leader in residential property management. Another good idea is to talk with your property management company to find out if there are other specific terms that apply directly to your role in the community.

Articles of Incorporation:

This is the legal document that establishes your homeowner association, condominium, or cooperative and is filed with the proper state agency, if required. Most condos and co-ops are run based on the corporation concept, so this would apply mostly to them. Most planned communities are non-profit, non-stock entities. The articles, which could be in the form of a corporate charter, address items such as bringing the corporation into existence; defining purpose and powers; and indicating the structure of a board of directors.

Bylaws:

These are formal regulations which are adopted by most housing communities. Some examples of items that could be addressed under bylaws include requirements for community membership, rules for conducting meetings, voting rights, election procedures, quorum requirements, board member responsibilities, and general powers of the board.

Community/Maintenance Fees:

These are paid by community members on a weekly, monthly, or annual basis to cover services such as landscape maintenance, snow removal, amenities such as swimming pool, tennis court, and gym, garbage collection, security, community events, insurance, and other essential items related to common elements of your property.

Community or Property Manager:

This is the representative responsible for overseeing the day-to-day management of your community who is typically hired and approved by your association’s board. This person helps enforce bylaws passed by board members, administers any board-approved policies and guidelines, and helps with other matters such as fiscal items, building and grounds maintenance, and administrative or clerical duties.

Declaration, CC&Rs, or Master Deed:

These documents are drawn up to declare state ownership rights and limitations that apply to all members of a community. For condos and co-ops, the document is called a declaration or master deed, and for a planned community it is called a declaration of covenants, conditions, and restrictions. These documents:

• Address what property (including common element %) is owned by the individual and  what is owned by the community at large;
• Create a relationship among all owners to each other and the community for maintaining, funding, and governing the development;
• Set standards, restrictions, and obligations based on architectural control and other activities to promote communal harmony;
• Create administrative framework; and
• Provide transition of control of the association from the developer to the property owners.

Hierarchy of Authority:

This concept can vary from community to community. Generally, this entails all governing documents used by the homeowner association, condo, or co-op including:

• Recorded map or plan
• Declarations, CC&Rs, master deed, proprietary lease, or occupancy agreement
• Article of incorporation
• Bylaws
• Rules and regulations
• And any other items necessary to the community

Local Laws and Regulations:

Your community is situated in a town that has its own set of codes, laws, taxes, and services. These entities could affect your community’s annual budget and be incorporated into member fees. Some examples are local fire codes may require sprinkler systems, exit signs, or fire extinguishers in units or buildings. Swimming pools may be subjected to water tests. There also may be taxes that apply to residents. Check with your local government office, or contact your property management company, to see if any of these affect your community.

Recorded Map or Plan:

This document is filed with the county recorder’s office and shows the layout of the condo, co-op or planned community. This plan shows the precise location of all lots before they are sold, as well as any common areas. Some states require a definition of the plot of land as well as an architectural drawing. This document helps identify any owner’s or community’s title to the property, as well as determines who is responsible for maintaining property, and whether a piece of property is properly located.

Resolutions:

These are adopted by association board members and assign rules and regulations to your community. It is recommended that any rules and regulations passed by a board be kept in a Book of Resolutions so that all are in an orderly, indexed manner for easy access. There are various types of resolutions including:

• Policy: These resolutions affect owners’ rights and regulations and address items including common areas, architectural provisions, and enforcement procedures.
• Administration: These address internal workings of the community including operations, collections, location of meetings being held, etc.
• Special: These are rulings made by board members that apply to an individual situation including a rule violation or actions taken following a lawsuit.
• General: These outline routine, ordinary events on a community’s calendar such as budgets or approval of contracts.

For more information on how to be the best board member you can be, contact FirstService Residential today.