A homeowners association's bylaws and "covenant"---articles of incorporation for a community association---are its founding documents. Bylaws generally set up the basic structure of a board of directors, set forth rules for how (and what) it will govern, establish a general date for membership meetings and delineate how association fiduciary business will be conducted. Bylaws also define membership and establish ground rules for member participation.
The rules by which homeowners associations are established and operated vary from state to state. As a business, homeowners associations are chartered and governed by state laws. Lawsuits based on differences of opinion over the provisions of bylaws generally end up in state courts but civil suits concerning the structure of bylaws, including their application, may end up as federal civil rights cases based on Constitutional issues.
Bylaws provide a framework for governance. Since most association boards are made up of volunteers and many do not employ professional managers, reference to bylaws provides continuity from one governing group to another. Bylaws also provide a framework of limits and models for directors as they make rules and regulations, conduct business and contemplate changes.
Homeowner associations are recent inventions. Before World War II, most neighborhood organizations were informal, and ground rules reflected cultural values and social norms. As the population grew after the war, communities became larger and more diverse. The community association attempts to re-introduce the old concept of the neighborhood, but it must rely upon a set of standards that has been achieved by consensus rather than common experience.
Most bylaws define areas of common responsibility for association members. These "common areas" are most often physical: a green space that runs through a community, or the walls and roofs of a condominium. They may also be theoretical, such as design standards or historic preservation principles. Bylaws may incorporate state or federal standards for an association but should have a clause allowing any language to change as the adopted standard is changed. As with most corporations, homeowner association bylaws usually establish liability protection for individuals who serve as directors provided they govern honestly and to the best of their ability.
Too many associations try to pack rules and regulations into their bylaws, creating an awkward, unintelligible, long-winded document. Bylaws should contain only enough to provide the basic framework of the association and the procedures by which it operates, including a process to make changes in the bylaws and in the rules and regulations. A set of bylaws is not just another "club" document---it should be written with the advice of a qualified real-estate law attorney.
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