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Association Powers and Decision Making

Association Powers and Decision Making

Each homeowner’s association decision must adhere to the following standards:
  • It must be within the scope of the association’s authority under the governing documents and the law;
  • It must be based upon a reasonable investigation;
  • It must be intended to serve the best interests of the association and the owners as a group;
  • It must be made in good faith; and
  • It must be reasonable considering the information available at the time the decision is made.
Additional standards may apply for specific types of decisions such as owner discipline or alteration approvals. Where the association has formally established policies or procedures, they must be uniformly applied and followed. But the fact that the association has permitted or approved a certain activity or alteration by a particular owner at one time does not mean that the association must permit or approve that same activity by the same or a different owner at a later time. In evaluating an association decision for compliance with these standards, the courts will defer to the board’s authority and presumed expertise.

The owner should begin by attempting to discuss the matter with the president, a director, committee chair or property manager. If this attempt does not yield satisfactory results, the owner should attend a board meeting or call an owner meeting to discuss the problem with the other owners. If the owner wishes to pursue the matter further, he/she should consult an attorney.

There is no governmental agency with authority to oversee homeowner associations. Association duties and standards must be enforced by owners and lenders through the court system or through some alternative dispute resolution process such as mediation or arbitration.

Association Structure and Funds

Common Interest Developments (aka Homeowner Associations)

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.

Director Election and Term

Enforcement and Disputes

Insurance and Liability

Maintenance, Alteration, and Defects

Meetings and Decisions

Mortgages and Liens

Officers, Managers, and Committees

Owner Assessments

Ownership and Possession

Ownership and Possession

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.

Title to the common area can be held by the homeowners’ association in a planned unit development or by the owners of percentage shares in a condominium. The decision is made by the developer at the time the governing documents are prepared and is very difficult to change later. To determine who owns the common area in an association, refer to the CC&Rs. The method of common area ownership has no significant consequences in a properly insured association. Note that in condominium projects, title to the common elements must be by undivided interest to all owners. The percentage held by each owner does not necessarily determine that owner’s usage rights or cost responsibility.

Use of Common Area

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