Source: http://www.jimslaughter.com/Community-Association-Statutes-and-Procedures-.cfm
Timestamp: 2019-04-22 16:59:48+00:00

Document:
As a parliamentarian, you will likely be called upon at some point to assist a community association. According to the Community Associations Institute (“CAI”), over 60 million Americans live in association-governed communities.1 Some 9,000-11,000 new community associations are formed each year, and more than four in five housing starts during the past 5-8 years have been built as part of a community association. Given such statistics, the number of community association meetings must be astronomical—think of all those associations multiplied by one annual meeting, occasional special meetings, monthly board meetings, and regular meetings of committees. As a result, it is worth the effort to learn what community associations are (and are not), how they are organized, and some of the unusual statutes and procedures that govern them.
There are many different types of community associations, and terms can vary between states. For instance, a “common interest development” (“CID”) in California would likely be called a planned unit development (“PUD”) in Georgia, or a “homeowners association” (“HOA”) in North Carolina.2 The umbrella term “community association” simply means a real estate development in which the owners are bound to membership in an organization by a set of governing documents that require adherence to a set of rules and, often, the payment of assessments. This term encompasses homeowners associations, condominiums, cooperatives, planned unit developments, and townhouses. Membership in the community association is automatic upon purchase of the property. Unlike other associations parliamentarians often serve, community associations are not voluntary.
A parliamentarian assisting such organizations should have at least a general understanding of the differences between types of community associations. In a “condominium” a person owns an individual unit and is a joint owner of the common elements. (As a result, the condominium association does not own any common property, even though it exerts powers over it.) In a “homeowners association” a person owns an individual unit; while the homeowners association owns the common areas. In a “cooperative” a corporation owns all units and common areas, and a lease gives rights of occupancy to individual units.
Because community associations are largely creatures of statute, specific community association issues will vary from state to state as the result of variations in state statutes. To complicate matters further, whether or not a specific statute applies to a community association may depend on when the association was formed. (State statutory schemes often provide that some or all of the statutes do not apply to communities created before adoption of the statute.) Despite these potential differences, a general understanding of the genesis of these associations and governing statutes is useful.
Without question, parliamentarians must be aware of the actual state statutes governing a particular association. Statutory wording frequently alters the standard parliamentary response to a given situation.
State statutes also often tinker with the quorum for board meetings. Under general parliamentary law, the quorum for a board meeting is a majority (“more than half”) of the membership.12 The UCIOA (§ 3-109(b)) and some state statutes define the quorum of a planned community executive board as fifty percent (50%) of the members—a number which is different than and may be smaller than a majority, depending on the number of members.13 In addition, slight differences in statutory wording can alter board quorum requirements depending on whether quorum is based on the number of directors in office or the number of director positions (as these numbers may be different).
In addition to statutory language, parliamentarians serving community associations must be aware of multiple governing documents. Governing documents for community associations may include: (1) Covenants, Conditions and Restrictions, (3) corporate charter, (4) constitution and/or bylaws, and (5) parliamentary authority.
CCR’s cannot be violated. After all, the CCR’s are a legal and binding contract by anyone who chooses to purchase property within the planned community. Also, unlike statutes which often only provide minimum standards, CCR’s are typically worded in terms of what “must” or “shall” be done. As a result, parliamentarians serving community associations must be aware of the contents of the CCR’s (and any subsequently adopted and filed “supplemental Declaration” or “amendment to Declaration” that may alter the original provisions).
Due to these high vote requirements, amendments to CCR’s are often adopted outside of meetings by agreements, rather than votes. For example, the Uniform Planned Community Act (“UPCA”) and the Uniform Common Interest Ownership Act (“UCIOA”) provide that the declaration “may be amended only by vote or agreement of unit owners of units to which at least  percent of the votes in the association are allocated . . . .”17 Similar provision is made for terminating a planned community, which can be accomplished “by agreement of unit owners of units to which at least 80 percent of the votes in the association are allocated.”18 Certainly, such votes could be taken at an association meeting. However, potential problems at such a meeting are legion: even a unanimous vote by those at the meeting might not be enough to adopt the motion (because the vote is based on the total number of unit owners and not those attending the meeting); quorum rules must be followed; proxies must be recognized; and motions raised at the meeting may further complicate the issue. Rather than attempt such a vote, a simpler solution is to opt for avoiding a meeting altogether. Instead, obtain the “agreement of unit owners” by canvassing the association and obtaining the written consent of the required percentage of members.
Not all community associations incorporate. For instance, in Virginia the practice is not to incorporate condominium associations on the theory that the condominium statute provides all necessary protections and guidelines.19 If incorporated, the corporate charter (sometimes called “articles of incorporation” or “certificate of incorporation”) establishes the association as a corporation (either nonprofit or for-profit) and contains the information needed for incorporating in that state.
The constitution and/or bylaws contain the basic rules relating to the community association as an organization. RONR examines the composition and interpretation of bylaws in detail.20 The bylaws cannot conflict with applicable statutes, the CCR’s, or the corporate charter.
Conflicts between these various governing documents can at times be difficult to reconcile. Without question, some governing documents are weightier than others. For instance, the UCIOA provides as follows: “In the event of a conflict between the provisions of the declaration and the bylaws, the declaration prevails except to the extent the declaration is inconsistent with the [Act].”27 Other conflicts may be harder to reconcile. For instance, which document governs if the articles of incorporation adopted by the Board conflict with the declarations adopted by the unit owners?
At times, the governing documents may delineate a hierarchy among themselves. In addition, general principles of interpretation in RONR may be of assistance (e.g., a general statement or rule is of less authority than a specific statement or rule and yields to it; more current documents take priority over earlier versions; when a provision is susceptible to two meanings, one of which conflicts with or renders absurd another provision and the other meaning does not, the latter must be the true meaning; etc.).28 Unlike other disputes involving the meaning of legal documents, “intent” of the original parties may carry little weight in the association context. After all, the documents were likely drafted by or on behalf of the developer, who may be difficult to locate in older developments and whose intent may bear little relationship to the present situation.
With history as a guide, the number of community associations will continue to flourish. These developments represent a huge potential market for parliamentary advice. In addition, over 1.5 million volunteers serve on the boards and committees of community associations in the United States. These members would benefit from attending parliamentary classes or joining a parliamentary organization, such as NAP. However, to better serve these organizations, parliamentarians must become more familiar with the structure of community associations and the procedures that govern them.
1 All community association statistics are from the Community Associations Institute (CAI) Web site at www.caionline.org.
2 Wayne S. Hyatt, Condominium and Homeowner Association Practice: Community Association Law (Third Edition) § 1.06 at 13 (2000).
3 Hyatt § 1.06(c)(5) at 21.
4 Hyatt § 1.05(b) at 11.
5 Introduction to Uniform Common Interest Ownership Act (1994) available at Web site of the National Conference of Commissioners on Uniform State Laws (www.nccusl.org).
6 The uniform acts can be obtained online using Web search engines or through the Web site links under “Resources” at www.jimslaughter.com.
7 UPCA § 3-109; UCIOA § 3-109.
8 N.C.G.S. § 47C-3-109 (2004).
9 N.C.G.S. § 47F-3-109(a) (2004).
10 N.C.G.S. § 47F-3-109(c) (2004).
11 N.C.G.S. § 47F-3-109(c) (2004).
12 See Robert's Rules of Order Newly Revised (11th ed.) § 40 (p. 347).
13 See N.C.G.S. § 47C-3-109(b) and 47F-3-109(b).
14 UPCA § 3-103 (emphasis added); see also UCIOA § 3-103(c).
15 The Uniform Act provides that the “declaration may contain any other matters the declarant deems appropriate.” UPCA § 2-105(b).
17 UPCA § 2-117(a); UCIOA § 2-117 (emphasis added).
18 UPCA § 2-118; see also UCIOA § 2-118.
19 Hyatt § 1.06(d)(2)(A) at 24.
20 See Robert's Rules of Order Newly Revised (11th ed.) §§ 2, 56-57.
21 Haw. Rev. Stat. § 421J-6 (2003).
22 Or. Rev. Stat. § 94.657 (2003).
23 Cal. Civil Code § 1363(d)(2004).
24 Robert's Rules of Order Newly Revised (11th ed.) § 2 (p. 17).
28 See Robert's Rules of Order Newly Revised (11th ed.) § 56 (p. 588-91).
Updated and reprinted with permission from “Statutes and Procedures of Community Associations,” National Parliamentarian, First Quarter 2005.

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