Governing Documents Do’s & Don’ts

Three main documents constitute the governing documents of a property owners association:

  • The Articles of Incorporation
  • The Bylaws
  • The Declaration of Covenants, Conditions and Restrictions (DCC&R’s).

Each section of the governing documents is essential to the proper administration of an association and must be given careful consideration before the first plat is drawn or drafted. Listed below are a few do’s and don’ts when creating relevant governing documents:

The Do’s

  • Use a specialist. Hire an attorney that specializes in homeowner’s association law to help write and file the governing documents.
  • Plan ahead! The Articles of Incorporation and Declaration should be filed before any development begins.
  • Think about the future. How will these rules affect the management of the association after the developer transfers power to the homeowners. Don’t include rules that are difficult to enforce or difficult to interpret.
  • Be reasonable. Consider all aspects of community living such as parking, basketball goals, pets, noise, lawn maintenance, garbage cans, rules for private streets (if applicable) and outbuilding requirements.
  • Allow for the Board to create resolutions that further explain the rules of the neighborhood, if necessary. Provide a process for how this should be done.
  • Consider how Board members or homeowners will be able to amend the documents in the future.
  • Consider the quorum requirements for annual meetings and allow for reasonable contingencies if a quorum is not met. Don’t make it impossible to get a quorum.
  • Clearly state assessment requirements and consequences of failure to pay association dues. There is very specific language that should be used when writing this section of the Declaration.
  • Make sure all governing documents are filed and in place before even one home is sold and closed by an individual homeowner.

Don’ts

  • Procrastinate! The governing documents are the backbone of your project and need to be created and filed first.
  • Restrict the power of the board by making the rules too specific.
  • Use too much legal jargon. Homeowners need to be able to read and understand the rules of the association.
  • Consider using narrative comments throughout the document to further explain portions of the declaration.
  • Make it impossible for the board or homeowners to amend the governing documents if needed.
  • Make it impossible for an association to meet reasonable quorum requirements for annual or special meetings.

Spectrum Association Management, LP offers this information for educational purposes only and not as legal advice. The information provided in this article does not create a client relationship between you and Spectrum Association Management, LP, nor is this article a substitute for legal advice. The contents of this article are subject to change without notice. You should not rely or act upon the contents of this article without seeking advice from your own attorney. Spectrum Association Management, LP is not a law firm.

Spectrum Association Management, LP provides information in this article as a general resource to clients and other interested readers. By making available access to this article, (i) Spectrum Association Management, LP is not purporting to render legal or other professional advice or opinions on specific facts or matters and (ii) Spectrum Association Management, LP is not creating or intending to create a client relationship between you and Spectrum Association Management, LP.