Understanding the Differences Between CC&Rs, Bylaws and Rules & Regulations
Your homeowners association has three types of governing documents: Covenants, Conditions & Restrictions (called “CC&Rs”), Rules & Regulations, and Bylaws. Frequently, the function of these documents or the role the property management company plays in implementing them can be confusing.
With this article, you will learn the purpose of each document and how you can work with your management company to develop guidelines that work best for your community.
Covenants, Conditions & Restrictions (CC&Rs)
This is a legally binding document that is officially recorded and filed with your state. Your CC&Rs cover the rights and obligations of the homeowners association to its members and vice versa. CC&Rs often cover legal issues, such as:
- Property-use restrictions
- Clearly defined maintenance obligations for the HOA and individual members
- Mechanisms for rule enforcement and dispute resolution
- Lender protection provisions
- Assessment obligations
- Insurance obligations
Because this record is kept on file with the state, it can be difficult to amend and requires a vote by the membership to make any changes.
If CC&Rs cover the “what” of the HOA, the bylaws cover the “how.” Your community’s bylaws establish the structure of day-to-day governance of your homeowners association. This includes things like:
- Frequency of HOA board elections
- Process for nominating and electing new board members
- Number of members that serve at one time
- Length of board member service terms
- Meeting frequency and quorum requirements
- Duties and responsibilities of board members
Like CC&Rs, Bylaws are difficult to change, as they too require a vote by the membership to amend.
Rules & Regulations
Your community’s Rules & Regulations are a catch–all for the things that aren’t covered in the Bylaws or CC&Rs. These are often the rules that might need revising over time due to changes in the community. For example, an HOA might have a rule that states that no children are allowed in the community pool before noon. This rule would not be a part of the community’s CC&Rs because it might need to change seasonally, or as more children move into the community.
Rules & Regulations can be changed by an HOA board vote with review by the members of the community. Traditionally, the Board will adopt a rule then send a notice to the community members who will have 30 days to review it. After 30 days, the board will review the comments and concerns of members, considering the members’ feedback in the final decision.
Every Restriction Can Be Changed
CC&Rs, Rules & Regulations, and Bylaws are usually determined when a developer incorporates the community. The developer will try to anticipate the type of community or commercial property space they are creating, but the needs of a community often aren’t fully clear until residents move in.
Every rule, regulation, covenant, condition and bylaw can be changed–it’s simply a matter of which process is required to make the change. CC&R changes require re-filing with the state, so changes should be made sparingly and with the help of an experienced attorney. Meanwhile, Rules & Regulations are in effect at the community level and simply require a board vote with community member review.
The Role of Your Property Management Company
Your residential or commercial property management company is an agent of your homeowners association corporation, whose primary role is to increase your property value and facilitate the enjoyment of your community. Your property management company has no say in the development of your CC&Rs, Rules & Regulations or Bylaws; they simply act to implement the guidelines set forth by your board.
Your property management company will also provide advice and guidance as you develop your community’s guidelines to ensure that you adhere to state and local laws. They should provide practical advice to ensure your board is making the decisions that best protect and enhance your community.
Your management company and property manager can show you the risks and rewards of changing your CC&Rs, Rules & Regulations or Bylaws and provide a useful framework to develop your community in a way that serves residents today and long into the future.