AMS reviews all documents after transition. These include the CC&Rs, Bylaws, Reserve Study, Budget, and Insurance. AMS reviews these documents to ensure uniformity and that the Community functions optimally. AMS also evaluates all contracts and expenses to look for potential savings based on scale or relationships.
Common Interest Development (aka Homeowner Associations)
The Declaration of CC&Rs is the most difficult of the governing documents to amend. In general, any amendment to the CC&Rs must be approved by a vote of the owners. An owner vote to amend the CC&Rs typically requires approval of a super-majority of the total voting power of the Association and may require approval from a government agency. There is usually a section of the CC&Rs that states the percentage of owner votes required to adopt a CC&R amendment, and sometimes the required percentage varies depending on which part of the CC&Rs is being amended. For example, the CC&Rs might state that at least 50% of the owners must approve an amendment in general, but that an amendment that would shift maintenance responsibility for some element of the property from the HOA to the individual owners requires a 75% vote. In another variation, the CC&Rs might state that to change the boundaries of someone’s lot, or to change the percentage of expenses someone pays, a 50% vote of the owners is required plus the approval of 100% of the owners who will be directly impacted by the amendment. Refer to your governing documents for specific percentages.
There are a few types of CC&R amendments that can be adopted by the board of directors without an owner vote. The board can amend the CC&Rs to delete provisions that illegally discriminate against or harass any person because of the race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. The board can also delete references to sections of law that no longer exist or have been renumbered.
If an owners’ association is unable to get the votes needed to adopt a necessary amendment, it is possible to petition the court to amend the CC&Rs without the required number of owner votes; however, a court will not grant such a petition unless there is a good reason to ignore the voting requirement spelled out in the CC&Rs.
It is common for CC&Rs to provide that some or all amendments must be approved by eligible mortgage lenders who hold mortgages on the lots or units within the property, or by a local government agency. These provisions are intended to prevent the owners from adopting amendments that undermine the lenders’ or local government’s rights or powers. Before adopting an amendment, owners should review the CC&Rs to determine whether the approval of lenders and/or a local government agency might be required.
Once a CC&R amendment has been approved, it must be recorded in the records of the county where the property is located. A CC&R amendment that has not been recorded in the county records is not valid.
CC&Rs describe the rights and obligations of the homeowners’ association and of each owner. CC&Rs are recorded with the county recorder of the county where the property is located, and automatically bind anyone who becomes an owner of the property after the CC&Rs are recorded. CC&Rs vary widely in content and length, but usually cover some of the following topics:
- The boundaries of the common area and of each unit or lot;
- The legal description of the property;
- The allocation of association operating costs among the owners
- The mechanism for collecting owner payments;
- Allocation of owner voting rights;
- Any restrictions on alienation of units; and
- The rights and protection of mortgage lenders.
Ownership and Possession
If the LCE is assigned to a particular unit or lot on a map or plat recorded separately from the CC&Rs, the sale or exchange would require an amendment of the map or plat as described in the previous answer. If the LCE is assigned to a particular unit or lot only in the CC&Rs and/or the initial deed conveying the unit or lot, and is not assigned on the map or plat, the sale or exchange will require an amendment to the CC&Rs and/or a new deed. In these cases, the owners directly involved with the sale or exchange will need the approval and cooperation of both the association and of their mortgage lenders. The CC&Rs may also require approval and cooperation of some or all the other owners and their mortgage lenders.
Most CC&Rs state that the homeowners’ association has the right to enter any unit or lot whenever necessary to fulfill the association’s duties. Among the duties that would justify entry are common area maintenance, verification of an owner’s compliance with owner maintenance requirements or alteration restrictions, and pet rules. Often, the CC&Rs will require that the association provide advance notice of the entry except in an emergency. When the CC&Rs are silent on these issues, both the right of entry, and the requirement for advance notice, would be implied.
The term “limited common elements” (“LCE”) refers to parts of a condominium project that are not within the defined boundaries of a unit but are intended to be used exclusively by one owner. Technically, LCEs are part of the common elements owned by all the owners, but one owner holds a type of easement which gives him/her exclusive usage rights. The easement is permanent, and cannot be taken away by the association or by the other owners. Decks, patios, parking spaces, and storage spaces are often assigned as LCEs on the recorded plat or survey map, in the CC&Rs, or in the deed conveying the unit to its owner.
The term “party wall” usually means a shared wall, fence, or other building element that sits on the border of two or more lots or between two or more units in a condominium. Where there are party walls, the CC&Rs will usually allocate responsibility for maintenance, impose restrictions on alterations, and provide access rights for maintenance. When the CC&Rs are silent on any of these issues, general rules of law apply. These laws are complex and beyond the scope of this article. For additional information, consult an attorney.
In a condominium project, the individually owned area is called the unit. The exact physical location of each condominium unit within a project is shown on the recorded map or condominium plan for that project. The map or plan, and/or the CC&Rs, will also contain a definition of the term “unit” as it is used for that project, listing the elements of the building that are part of the unit. These definitions vary significantly from project to project, and it is unwise to apply generalizations or assumptions. Instead, read the definition with the following questions in mind:
- Does the unit include any exterior surfaces such as roofing, siding, or foundation?
- What portions of the interior walls does the unit include? The whole wall (i.e., both sides and everything in between), half the wall (i.e. everything from one side to a point halfway to the other side), one finished surface (i.e., only the wallboard or plaster on one side), or just the finish (i.e., the paint or paper)? Note that some unit definitions distinguish perimeter walls (i.e., walls between units, or between a unit and the common area) from partition walls (i.e., walls between rooms in the same unit), or structural walls (i.e., walls that help hold up the building) from non-structural walls (i.e., those that simply divide rooms). Where these wall-type distinctions are made, the portions of the wall that are part of the unit will vary depending on wall type.
- What portions of the floors and ceilings does the unit include? The entire floor or ceiling, all portions up to a midpoint, the finished portion (i.e., ceiling plaster or sheetrock, finished wood flooring), or just the finish (i.e., paint or carpet)? Here again, some definitions distinguish floors and ceilings between units, or between a unit and the common area, from floors and ceilings between levels of the same unit.
- What portions of the windows and doors does the unit include? The entire window or door, or only glass and screens? Note that some definitions distinguish interior doors from exterior doors. Does the definition include window and door frames? Does it include window and door hardware?
- Does the unit include all of the fixtures and appliances located within it? Note that the term “fixtures,” when used in this context, encompasses cabinetry, lights, electrical outlets, sinks, showers, and tubs.
- What portions of the plumbing, electrical, heating, and air conditioning systems are part of the unit? All elements that serve only the unit, or only elements visible from within the unit?
- Does the unit include any decks, balconies, or patios, and if so, how does the definition describe the boundaries of these areas? Note that even if the unit does not include these areas, they may be assigned as exclusive use common area as discussed below.