Much like any other non-governmental organization, community associations employ the use of specific documents to outline their goals, rules, and guidelines. We've compiled a list of the most popular community association legal terms and documents to help you understand and navigate them.
What is the Declaration?
The declaration is sometimes referred to as the “master deed,” “documents,” or “declaration of covenants, conditions, and restrictions” [CC&Rs]. It describes an owner’s responsibilities to the association, which can include payment of dues and assessments as well as the association’s various duties to the owners. It is commonly viewed as somewhat of a “constitution” of the association. The person or group of persons who either signs the original declaration governing the development and community association or acquires the original developer’s rights is referred to as a “Declarant."
What are Bylaws?
Bylaws are a set of rules or guidelines regarding the operation of a non-profit corporation such as a Board. They generally set forth definitions of offices and communities involved with the successful operation of the association.
What are Governing Documents?
The governing documents include the declaration, bylaws, operating rules, articles of incorporation or any other documents which govern the normal operating procedures of a community association.
What is an Estoppel Letter?
An estoppel letter is used in a transfer or conveyance of real property prior to the closing transaction. The document is sent to a bank (or other lender), to an HOA (or Condo Association), to a city/municipality, or a tenant requesting payoff of a mortgage, assessments or taxes due, or rental amounts due on a lease, to incorporate these amounts into the Settlement Statement for the buyer and seller of the real estate. Assessments and payments due must be incorporated into the amounts due at closing and paid at the time of the closing. Some amounts may be pro-rated, but all must be included in the Settlement Statement. The estoppel letter is the document that facilitates this process.
What is an Easement?
An easement is an interest or a right in real property which grants the ability to a landowner to use the land of another for a special purpose or endeavor. An association may for example have an easement for slope maintenance or other repair purposes. A public utility may also have an easement for maintenance or repair work to be executed at a future date.
What is a Notice of Noncompliance?
Similar in essence to a lien, the Notice of Noncompliance is a document sometimes authorized under the CC&Rs and may be recorded in the county property records. Its essential purpose is to notify prospective buyers that the property is in violation of the documents.
What is Common Area?
A common area is any area of improved real property intended for shared use by the members of a community association.
What is an Ordinance?
An ordinance is an individual law or set of laws adopted by local government at the county and city level.
What is a Lien?
A lien is a monetary claim levied against a property for unpaid mortgages, taxes, contractor work, or other charges. A lien is attached to the property, not the owner, but legally must be recorded in the property records of the county of residence. If a lien is in place, the property owner has very limited ability to do anything involving the property until the lien is satisfied or removed.