In upcoming publications, we will furnish a brief commentary on several different items that may affect boards of directors, homeowners and property managers. If you would like a specific topic to be included, please send us your request.
READING THE GOVERNING DOCUMENTS
For those of you who have recently moved into an association, we provide this section for you and your sanity. If you are like most homeowners, you have not sat down and read each and every section of your association’s Declaration of Covenants, Conditions and Restrictions (”CC&R’s”). (If you did, you probably fell asleep!) You might ask yourself, “why do I need to read this stuff?” Well, there may come a day that you will need to refer to this document, and prior to that day, we hope the following will assist you.
Why do CC&Rs exist? The CC&R’s,
– are the source of the association’s authority and responsibilities
– enable the board to adopt rules and regulations which are designed to enhance the entire community
– ensure that the financial responsibilities are followed, therefore ensuring that the association has funds to operate
– are required to maintain and preserve homeowners’ interest in the community
– provide for the maintenance, repair and replacement of common area property and elements
– establish financial policies and procedures, including maintaining proper financial records
– provide for the formulating and adoption of an annual budget, including the amount of assessments
– authorize the board to adopt a collection and or/fining policy
– permit the board to establish and/or review the associations rules and regulations, which may also include architectural guidelines
– ensure that the association has adequate insurance coverage
– permit the board to select management companies and other vendors who do business on behalf of the association, including accountants, attorneys and landscapers
– allow the board to create and supervise committees, as well as any other programs that assist the homeowners
– ensure that the homeowners are well informed with regards to monthly board meetings, annual meetings, changes or amendments, etc.
REVIEWING THE CC&RS
For those of you who may be on the board, we suggest (if it has not been already done) that you take a look at your association’s current CC&Rs. In performing that review, the following are some tips to assist you:
– How old are the CC&Rs? Were they recorded twenty (20) or more years ago? If so, the CC&Rs are most likely outdated and do not conform with current California law, including important items such as late fees and interest rate for delinquent assessments.
– Have there been too many amendments? (Make sure you have copies of all the amendments to understand which sections have been changed in the main document) If there have been several amendments, it becomes difficult to keep track of them when addressing issues within the association.
– Are there any necessary items which are missing? For example: authority for the board to grant licenses and easements over common area, etc.
– Are they in accordance with recent legislation. For example, is there a provision which is discriminatory? If so, it needs to be removed.
– Who can sign on behalf of the board for the collection of delinquent assessments. Is it a board member or a representative?
– Does the association need to add or delete use restrictions? (Most likely, provisions regarding satellite dishes and antennae installations are not in compliance with the recent FCC orders)
Upcoming topic:Rules & Regulations