The Community Associations Institute has many valuable resources for anyone who assists community associations. While these materials are often of most interest to professional community managers and HOA/condo owners, there are also many excellent publications for attorneys. A recent digital book, Guiding Principles for Community Association Governing Documents: A Resource for Lawyers, will be of interest to anyone who has to draft original association documents or amendments to those documents.
This is no little brochure, but has excellent, detailed advice for getting the wording of documents right. The Task Force that compiled the recommendations was appointed by the College of Community Association Lawyers and is worth listening to, as it was composed of some of the best developer and community association attorneys in the country. The group was co-chaired by CCAL Fellows Laurie Poole of Adams Stirling in CA and Robert Diamond of Reed Smith in VA. I’m proud to say that Harmony Taylor, a partner at Law Firm Carolinas, also served on the Task Force.
With 55 pages of advice, I won’t try and summarize the whole publication. Instead, I recommend you purchase the book as a digital download from CAI’s Online Bookstore.
However, here are some of the principles for writing good HOA/condo governing documents, with the book elaborating and giving examples of each. (The below phrasing is mine.)
Guiding Principles for Governing Documents
- Balance the developer‘s interest with future owners‘ interests
- Use plain English when possible
- Identify property locations and boundaries precisely
- Clearly define responsibility for upkeep of community components
- Use restrictions should be both appropriate and clear
- Provide leasing restrictions that are consistent and fair to both owners as well as investors
- The amending process should balance the developer‘s interest with future owners’ expectations
- Provide appropriate insurance coverage and risk management techniques to protect both the association and owners
- Make certain that either reconstruction or insurance proceeds will be available in the event of a loss
- Have consistent, fair and compassionate enforcement that treats residents as neighbors
- Language protecting lenders should also preserve association flexibility
- Provisions should allow for meetings that are orderly, open and facilitate owner participation
- Make certain that the Board of Directors has the power to properly govern
- Provide for flexible decision making processes to allow the association to function successfully
- Ensure for liability protection and indemnification of association leaders
- The documents should allow the board to set policy, which a community manager can then implement efficiently and economically
- Have a process for maintaining association records properly and for appropriate periods
- Owner assessments should be fair and economically sustainable for the Association
- If not provided by statute, ensure efficient and compassionate collection of assessments
- Include language as to reserves for physical asset replacement
- Rules and regulations must be modifiable to meet changing needs and circumstances
- Architectural request provisions should be included that are reasonable, flexible, and preserve property values
- Allow for committees to assist in governance, but specify their limitations
- Include timely, efficient and cost-effective dispute resolution language
- Clear provisions should sunset developer authority over time
While many of these recommendations should be self-evident or expected, it’s nice to have them all in one place with specific details. My compliments to CAI, the College of Community Association Lawyers, and the drafting Task Force on such a useful resource!
If you have questions about any community association (HOA or condo) issue, please contact a Law Firm Carolinas attorney at any of our five offices for assistance.