Association Terminology & FAQs




Association Terminology


Frequently Asked Questions




Association Terminology: Association Manager

An Association Manager's responsibilities include...

  • Advise and provide administrative, managerial, and operational counsel to the association governing body
  • Exhibit professionalism and loyalty to the principal (the Board)
  • Exercise diligence in performing duties on the principals behalf
  • Account for financial activities covered by the Management Agreement
  • Perform onsite property inspections
  • Solicit and evaluate bids for association services
  • Supervise maintenance activities and contractor performance
  • Oversee and authorize payment for primary association services
  • Know and abide Bylaws, recognizing the State agency that supervises the community associations

Managers Perspective:

  • Working in balance with homeowners, board, and realities of management companies business(possible friction)
  • Problem-solver
  • Multi-task oriented

 

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Association Terminology: Board of Directors
Frequently Asked Question: What is the Board of Directors?

Answer: The Homeowner's Association is a corporation and therefore a governing body that is required to oversee its business. The Board of Directors is elected by the homeowners, or as otherwise specified in the bylaws. The limitations and restrictions of the powers of the Board of Directors is outlined in the Association governing documents found within the Resource Center page of this site. Depending on the management agreement, some of the Board's responsibilities can be turned over to a managing company.

Board of Directors Perspective

  • Maintaining the value of the property and a good quality of life for the residential community
  • Governing smoothly
  • Enforces rules
  • Establishing and keeping budget


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Association Terminology: President

A President's responsibilities include...
  • Chief executive officer and leader of the association
  • Presides at all meetings of the board and membership
  • Executes legal documents on behalf of the association
  • Sets meeting agendas and controls all meetings
  • Represents the board before the residents
  • May have nominating, if not appointment, responsibility for all committees

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Association Terminology: Vice President

A Vice President's responsibilities include...
  • Performs all of the duties of the president in his/her absence
  • Typically shares some of the burden of the president regarding appearances, liaison, public hearings, etc.
  • Usually assigned liaison responsibility to specific staff or contractors, and to specific committees

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Association Terminology: Secretary

A Secretary's responsibilities include...
  • Prepares and distributes board and membership meeting agendas, minutes, and materials referred to in minutes
  • Maintains minutes and book on all meetings
  • Maintains book of resolutions
  • Maintains all official records, including official correspondence, contracts, membership roster, etc.
  • Receives, verifies, and maintains all proxies
  • Attests, by signature, to the legitimacy of certain documents

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Association Terminology: Treasurer

A Treasurer's responsibilities include...
  • Works with appropriate staff, contractors, and committees to develop and submit annual operating budget for approval
  • Maintains adequate records of all association financial transactions
  • Maintains roster of disbursement of funds, as authorized
  • Prepares period financial reports
  • Arranges, subject to board approval, an independent audit of financial affairs

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Association Terminology: Governing Documents
Frequently Asked Question: What are the CC&Rs?
Frequently Asked Question: What are the Bylaws?

  • All documents that regulate the community life
  • Documents may vary depending on type of Association (condo, townhome, etc.)
    • State law
    • Declaration of Covenants or Master Deed
    • Conditions and Restrictions
    • Bylaws
    • Rules and Regulations
    • Plats of Survey and Easement Agreements (may be separate, often included in the declaration)

Basic Condominium/Townhome Legal Documents

  • State Enabling Statute - permits the creation of condominium/townhome form of ownership and prescribes the basis of determining ownership interest, rights and obligations of the owners, duties and powers of the association, and the process of dissolution of the condominium
  • Subdivision of Condomimium/Townhome Plat - describes the location and nature of the common elements and the units
    Condominium Declaration or Master Deed-defines the units, common and limited common elements, and is the collection of covenants imposed on the property to provide for:
    • The basis for allocation of percentage ownership interest
    • The obligation of each owner to share in funding the cost of association operations
    • The power, authority, and responsibility of the association in its operations and in making and enforcing rules
  • Individual Unit Deeds - comprises the individual unit deed
  • Articles of Incorporation - creates the association as a corporation under state corporate statute and defines its membership and sets forth the process for creating the board of directors, voting procedures, etc.
  • Bylaws - implements, in specific detail, the provisions of the Declaration and the Articles of Incorporation regarding the association operations, including delineation of the meeting process, election procedures, powers and duties, board meetings, committees, insurance requirements, rule-making and enforcement process
  • Rules and Regulations - sets forth the operational powers or provisions and the use restrictions adopted by the association

Legal Docs for Homeowner Associations and the Hierarchy of such Documents

  • Subdivision Plat - describes the location and nature of the common property and the individual lots
  • Property Deeds-comprise the individual lot deeds and the deeds to common property which give a legal description of the property. 
  • The Declaration of Covenants, Conditions, and Restrictions - The Covenants, Conditions and Restrictions (CC&Rs) are the governing legal documents that set up the guidelines for the operation of the planned community as a non-profit corporation. The CC&Rs were recorded by the County recorder's office of the County in which the property is located and are included in the title to your property. Failure to abide by the CC&Rs may result in a fine to a homeowner by the Association. The governing legal documents for the association may be viewed online within the Resource Center page of this site. The declaration of CC&R's is the collection of covenants imposed on all property within the development and provides:
    • For automatic association membership of all owners and the basis for voting rights
    • The obligation of each owner to share in funding the cost of association operations
    • Certain restrictions (architectural control and other rules) on the use of the property and the association's enforcement powers
    • Sets forth the power and authority of the association to own and maintain the common property and to make and enforce rules
  • Articles of Incorporation - creates the association as a legal entity under state corporate statute; defines the board powers and responsibilities of the association and its membership; and, sets forth the process for creating the board of directors, voting system, etc.
  • Bylaws - The Bylaws are the guidelines for the operation of the non-profit corporation. The Bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership's voting rights, required meetings and notices of meetings, and the principal office of the Association, as well as other specific items that are necessary to run the Association as a business. Implements, in specific detail, the provisions of the CC&R's and the Articles of Incorporation regarding the association operations, including delineation of the meeting process, election procedures, powers and duties, board meetings, committees, insurance requirements, rule-making and enforcement process.
  • Rules and Regulations - sets forth the operational powers or provisions and the use restrictions adopted by the association

Applicable Civil Rights Laws

  • Prohibition against racial discrimination as stated by the Civil Rights Act of 1866
  • Equal Credit Opportunity
  • Fair Housing Amendments Acts, 1988, applies to sale of residence
    • Does not prohibit discrimination by owners, if selling or renting as long as they own 3 or less homes
  • Board is prohibited from discrimination in exercising its 1st right of refusal
  • Association must abide by laws prohibiting discrimination against families with kids
  • Persons with disabilities (at own expense) must be allowed to make accommodations per the Americans with Disabilities Act, 1993

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Association Terminology: Accounting Basic Terminology
  • Cash Method of Account - income and expenses are only recorded when cash changes hands. Financial reports only reflect cash transactions. This is a relatively simple system for simple situations. Because all obligations are not recorded until cash changes hands, this method does not provide an accurate portrayal of the financial condition of the association at any given time.
  • Accrual Method of Accounting - keeps track of all financial activities, including revenue as it is earned (as opposed to when it is received) and expenses as the obligation is incurred (as opposed to when it is paid). This makes possible a more accurate determination of the financial condition of the association at any point in time. Also, this is a better method for multi-year tracking of capital reserves credits and deficiencies. The primary disadvantage is the greater complexity and technical knowledge that is needed to maintain the records, understand the reports, etc.
  • Capital Reserves - the Board has the obligation to repair and replace major capital facilities, buildings, and equipment of the association. The ideal method of providing for these future expenses is the establishment of a capital reserves system and budget to assure that such funds are available when needed. With knowledge that the future holds predictable major expenditures for repair and replacement of facilities and equipment, the association could begin the gradual accumulation of funds through a reserve account to meet all or a portion of that expense when it comes due.
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Frequently Asked Question: What is a "management company," what so they do, and how do I reach them?

Answer: A management company is contracted by the Board of Directors to provide such services as: Collection of assessments, supervision of subcontractors, obtaining bids for subcontracted services, providing financial statements and collection reports, as well as a general clearing house for problem solving, communications with homeowners and the Board of Directors and to serve in an advisor capacity. The management company reports directly to the Board and all decisions are made by a majority vote of the Board of Directors. The management company may be reached online through the Management Office page on this website or by phone from the numbers listed on the Contact Us page on this site.

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Frequently Asked Question: What is a Homeowners Association?

Answer: It is a non-profit corporation registered with the State and managed by a duly elected Board of Directors. Its purpose is to maintain all common areas and to govern the community in accordance with the provision of the legal documents: CC&Rs, Bylaws, and Articles of Incorporation. The governing legal documents for the association may be viewed online within the Resource Center page of this site. The corporation is financially supported by all members of the homeowners association. Membership is both automatic and mandatory.

Homeowners Perspective

  • Most care a great deal about residences
  • Will want service from manager and decisions from Board that will provide a good quality of life
  • Problems may arise when expectations are too high or not realistic; this can occur when interests are too specialized or unique
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Frequently Asked Question: Are there any other rules?

Answer: Most associations have developed Rules and Regulations as provided for in the CC&Rs and adopted by the Board of Directors. Rules are established to provide direction to the homeowners for common courtesies with regard to parking, vehicles, pets and pool use hours, etc. In addition, your Association will adopt Architectural Guidelines with procedures for submitting requests to make exterior changes to your home. Such changes may include patio covers, decks, landscaping, exterior color changes or extensive interior changes and additions. These rules and guidelines are set up to maintain the aesthetic value and integrity of the community on behalf of all owners, and hopefully protect the market value of your investment as well. Violations of these rules may result in action by the Board of Directors and a fine. In addition, if you proceed with an exterior improvement or change, without written approval of the Board of Directors, or Architectural Committee, as applicable, you will be required to remove or correct the alteration and/or be fined for the violation.

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Frequently Asked Question: If I am having problems with a neighbor for a violation of the Policies & Guidelines, what can I do?

Answer: If residents cannot resolve a situation between themselves, then turn to your Association. Should you have a situation that does not appear to be resolved through neighborly means, and you are willing to actively participate in the enforcement provided by the Policies and Guidelines, you may complete a Covenant Violation form online. The Violation form may be found within the Management Office page on this site. If the situation is deemed in violation of the Policies and Guidelines, the Board of Directors will institute the enforcement policy. Your continued assistance may be required.

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 Frequently Asked Question: Are Board Meetings open to all residents? If so, where and when are they held?

Answer: Yes. Notice of the time and place of any regular board meeting will be noted in the community newsletter, or accessed online on the Calendar page.

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Frequently Asked Question: If I was to serve on a committee, how do I find out what committees are active and how I can get involved?

Answer: The Board and Committee MEmbers page under the Contact Us menu tab of this website will inform you of the status of current committees organized and committee contact information. If you are interested in volunteering, please contact the committee chair or fill out the online volunteer form found on the same page.

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Frequently Asked Question: What is my assessment?

Answer: The assessment is the periodic amount due from each homeowner to cover the operating expenses of the common area and provide for reserve funds for replacement of common facilities in future years. Your assessments are due on the first of the month. Statements will be sent for assessments as a reminder of the amount due. It also includes DirecTV's 'CHOICE' package and 6 HBO channels as well as internet.

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Frequently Asked Question: How is the amount of my assessment determined?

Answer: The Department of Real Estate typically requires an initial budget from the developer for each community that a developer proposes to build. This budget is set upon specific guidelines for utilities, landscaping, administration, etc. Reserve funds are monies set aside for future expenses due to the life expectancy of certain items: lighting, street resurfacing, pool equipment, etc. These amounts are then divided by the number of units built in a given phase of the development. Subsequent budgets are developed by the Board of Directors and adjusted periodically to meet anticipated expenses.

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Frequently Asked Question: Will my assessment go up?

Answer: There is no concrete answer to this. Typically the Civil Code provides for annual increases, but not to exceed 20 percent per year without the vote of the membership. The Board of Directors may approve an increased budget, increasing your assessment up to this percentage in order to cover increased costs of operating and maintaining the common area and sufficient reserve funds.

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Frequently Asked Question: What happens if I don't pay my assessment? 

Answer: The maintenance and management services incurred by the Association are dependent upon timely receipt of the assessments due from each homeowner. Late payments will result in a late charge as assessments are due on the first of the month. In addition, the CC&Rs allows the Association to charge late charges and interest and proceed with a lien on your property, or foreclosure proceeding for nonpayment of assessments. Also, once a resident is two months in arrears or more, with payment of assessment, their telecom services (TV & internet) as well as amenity access, will be turned off.

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