HOAs, regardless of their size, need a formal structure. They need it in order to function in the best way possible for their residents. By having HOA governing documents, it is easier to resolve potential disputes that may occur down the road. Whether you are on the board of your HOA or simply a member, it is important to understand the HOA governing document hierarchy of your association. This hierarchy includes HOA CC&R documents, HOA declaration, and other governing documents, rules, and regulations that we’ll cover here.
An Overview of HOA Governing Document Hierarchy
The HOA governing document hierarchy is important to every HOA. While each document has an important purpose, some will take priority over the others. HOA governing documents are put in place to control the operation of the association along with the common interest development that the HOA was formed to manage.
Typically, the documents that are included in this hierarchy are:
- The Local Law
- Declaration of Covenants, Conditions, and Restrictions (CC&Rs)
- HOA Articles of Incorporation
- Association Bylaws
- Association Operating Rules & Regulations.
With several extensive documents providing a framework for an HOA, some priority needs to be established. The higher the document is in the hierarchy, the more authority it usually has, with exceptions. For example, the provisions in the law will have priority over the CC&Rs of an HOA.
Sometimes, though, provisions within the same document may conflict with each other. In cases like these, certain rules of interpretation applies to resolve these conflicts.
The Local Law
The governing document that determines the hierarchy of governing document is a good example of the law. The Civil code section 4205, which is part of the Davis-Stirling Act, has established the authority of certain governing documents over others.
When creating HOA governing documents, it is important to have a working knowledge of the local laws where the HOA is located. Local laws are important, and they also need to be combined with the Rules of Interpretation when there is a conflict between the local law and governing documents of an HOA. The law will always supersede any rules laid out by the community.
The Hierarchy of HOA Governing Documents
In the first provision of section 4205, the act sets forth the ultimate authority of the law. That is, the law shall prevail if there is any sort of conflict between its provisions and those of the governing documents of an HOA.
However, there are a few provisions where the law explicitly defers to the governing documents. These are the only exceptions to this level of hierarchy.
Next, the act establishes the authority of the Declaration of Covenants, Conditions, and Restrictions, also known as CC&Rs or simply the declaration. In any case that the articles of incorporation conflicts with the declaration, the latter shall prevail.
Similarly, the next provision sets forth the authority of both the CC&Rs and the articles of incorporation over the HOA bylaws. In the hierarchy, the CC&Rs and articles of incorporation shall prevail over the bylaws in case of conflict.
Lastly, the act establishes the place of the HOA operating rules in the hierarchy. It’s the governing document with the least authority in the hierarchy. As such, the operating rules get overridden by all the other documents. If there’s any conflict between the HOA operating rules and one or more of the bylaws, declaration, articles of incorporation or the law, the provisions in the operating rules shall yield.
Declaration of Covenants, Conditions, and Restrictions (CC&Rs)
The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) is a document stating the division of power along with the rights and responsibilities between the HOA and its members. CC&Rs usually contain provisions related to assessment obligations of its members, association and member maintenance responsibilities, architectural control powers, association enforcement authority, dispute resolution, property use restrictions, and insurance requirements.
When it comes to HOA violations, these are typically what members are running afoul of. CC&Rs set the stage for the nature of the relationship of authority between the HOA and residents. Generally, CC&Rs have the most authority, right below the local law.
That means the provisions in the CC&R prevails over those of any of the other governing documents, except for the law.
Articles of Incorporation
The Articles of Incorporation are filed with the state that the HOA is registered and essentially define the legal name, address, and corporate status of the HOA. It also has provisions that define some of the functions of the association, as well.
The articles of incorporation sits under the law and the declaration in order of hierarchy. This means that the provisions of the articles of incorporation prevail over those in the bylaws and the operating rules. However, the law and the declaration both overrules the articles of incorporation, in case of any conflicting provisions.
The Bylaws are terms that define how the HOA is going to function as a corporation. Bylaws can name who will be directing certain aspects of the HOAs responsibilities. Bylaws will determine the number of their directors, frequency of elections, and any other procedures that are specific to the HOA.
The provisions in the bylaw overrides only those in the operating rules, in case of conflict. Aside from the operating rules, all the other governing documents have precedence over the bylaws.
Operating Rules & Regulations
The Operating Rules & Regulations are developed by the board of the HOA to determine how the day-to-day procedures will operate in the HOA. Topics of these rules can range from architectural specifications or club house rules. Generally, the rules and regulations will be the lowest in the hierarchy of documents.
The operating rules are the lowest in the hierarchy of governing documents. In case of any conflict in the provisions, any of the bylaws, articles of incorporation, CC&Rs, or the law will prevail over the operating rules.
How A Professional HOA Management Company Can Help You In Legal Matters
When it comes to HOA governing document management, having help matters. A good HOA management company should have years of experience helping established and new HOAs alike. Even better if they have the ability to customize service. We can give you custom-fit solutions based on location, neighborhood size, projected budget, and necessary tasks. Want to learn more about our services? Give us a call.
- The Ultimate HOA Architectural Review Guide
- 8 Commonly Asked Questions About HOA Taxes
- HOA Financial Reports: What Every HOA Board Member Should Know