Newly elected board members may come across unfamiliar terminology that will now be part of their new life. Making a list of a few key words and reviewing them regularly can help make the transition easier. With time and experience, this terminology will become second nature. Below, you will find a good starting point for your list, brought to you by FirstService Residential. Beyond this list, it would be a great idea to speak to your property management company to discover any specific terms applicable to your role in your community.
Articles of Incorporation: This is a legal document that establish your homeowner association, condominium, or cooperative. This document is filed with the proper state agency, should the information be required. Traditionally, most condos and co-ops are conformed based on the corporation concept. The majority of planned communities are non-profit, non-stock entities. The articles, which could be in the arrangement of a corporate charter, addresses items such as bringing the corporation into existence; defining powers and purpose; and indicating the assembly of a board of directors.
Bylaws: This term refers to the formal regulations which most common interest communities adopt. Some examples that this term entails are requirements for community membership, rules for managing meetings, voting regulations, election procedures, quorum requirements, board member responsibilities, and the general powers of the board.
Community/Maintenance Assessments or Fees: These fees are finances paid by community members on a weekly, monthly, or annual basis to cover services such as trash removal and landscape maintenance. The fees also cover maintenance for amenities such as the swimming pool, tennis court, gym, security, community events, insurance, and other necessary items related to the property’s common elements. In general we refer to these as Assessments, but neither the NC General Statute 47c or 47f have a definition regarding fees or assessments.
Community or Property Manager: This representative is responsible for overseeing the daily management of your community. Your association’s board will typically hire and approve who is assigned this role. This person’s responsibilities include helping enforce bylaws passed by board members and assisting with fiscal matters, administering any board-approved policies and guidelines, maintenance of the building and grounds, 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 also referred to as the declaration or master deed. For a planned community it is titled a declaration of covenants, conditions, and restrictions. These documents:
  • State what property (including common element %) is owned by the individual and what is owned by the community at large;
  • Create a network among all owners in relation 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 agreement on all items within the community; 
  • Establish administrative framework; and 
  • Provide transition of control of the association from the developer to the property owners.
Hierarchy of Authority: This concept may vary from one community to another. Traditionally, this entails all governing documents used by the homeowner association, condo, or co-op including:
  • Recorded map or plat 
  • Rules and regulations
  • Declarations, CC&Rs, master deed, proprietary lease, or occupancy agreement
  • Bylaws 
  • Article of incorporation
  • And any other items necessary to the community
Local Laws and Regulations: Because your community resides in a town or county that has its own set of codes, laws, taxes, and services – these entities could affect your community’s annual budget and be incorporated into membership fees/assessments. One example is the existence of local fire codes that may require sprinkler systems, exit signs, or fire extinguishers in units or common buildings. Your community’s swimming pool may be subjected to water tests. Additional taxes may be applied to residents. Verify with your local government office, or reach out to your property management company, to see if any of these affect your community.
Recorded Map or Plat: This document illustrates the specific location of all lots before they are sold, as well as any additional common areas. This document is an aid to identify any owner’s or community’s title to the property, as well as determine who is held responsible for maintaining the property, and whether the pieces of the property are accurately accounted for.
Resolutions: These decrees are implemented by association board members and appoint rules and regulations to your community. It is recommended that any rules and regulations passed by a board be recorded into a Book of Resolutions so that they are in an organized and indexed manner for easy access. There are various types of resolutions including:
  • Policy: Certain resolutions affect owners’ rights and regulations as well as address items including common areas, architectural provisions, and procedures needing to be enforced.
  • Administration: These address internal workings of the community including operations, collections, researching meeting locations, etc.
  • Special: These resolutions practice the rulings established by board members that apply to an individual situation that include rules, violations, or actions taken following a lawsuit.
  • General: These encompass routine, ordinary events stated a community’s calendar such as budgets or approval of contracts.
For more tips on how to be a successful board member, contact FirstService Residential, North Carolina’s leading community management company, today.
Thursday April 21, 2016