Community Tips

GOVERNING DOCUMENTS
The following is a listing of the governing documents for community associations:

Federal and State Law
Recorded map, plat or plan
Declaration, CC&R’s (Covenants, Conditions and Restrictions)
Articles of Incorporation
Bylaws
Board Resolutions

The developer will create a “Declaration of Covenants, Conditions and Restrictions” which, when recorded with the Clerk and Recorder where the property is located, establish the rights, duties, and obligations of the owners of a subdivision, condominium or other planned development as that phrase is defined by Colorado law. These restrictions and obligations range from architectural control to prohibitions on nuisance or undesirable activities believed by the developer to enhance and promote harmonious living in the community.

THE BOARD OF DIRECTORS
The Board of Directors is elected by the individual owners in an association. They are volunteers of a non-profit corporation who are responsible for the association’s business affairs, governance of the organization and enforcement of covenants. The board members have a fiduciary duty to act in the best interest of the community as a whole. They also have the responsibility to maintain, protect, preserve, and enhance the community’s standards as set forth in the association’s covenants.

BOARD OF DIRECTORS MEETINGS
Board of Directors meetings are for the purpose of conducting the business of the Association. The President is usually authorized to run the meetings and the Association’s Articles of Incorporation and Bylaws describe the manner, frequency, and scope of the business to be conducted. Best practice suggests that the Secretary should develop a specific agenda of business for the Board which is delivered in advance of the meeting for review, along with any supporting documents required. Similarly, best practice is for the Board to allow members at large (other owners) to have an opportunity to speak at the meeting. This is the time for owners to raise issues for future board considerations.

MANAGEMENT COMPANIES
A management company does not make any decisions for the Association. The management company’s role is to perform duties as directed by the Board of Directors and to provide guidance to the board. A management company will solicit bids from subcontractors for presentation to the Board of Directors. A management company will act as a liaison of the Association’s attorney or CPA of choice, but will offer no legal or accounting advice. The management company will provide bookkeeping services, but it is the Association’s responsibility to approve all incoming and outgoing expenses, prepare and adopt annual budgets, and sign all checks for accounts payable. A management company is essentially support staff for the Board of Directors, so that the board can concentrate on their responsibilities – to maintain, preserve, and enhance the community’s standards, as set forth by the association’s covenants. The management company can offer the kind of perpetual consistency of record keeping, administrative performance, and remind the Board of historical precedent which allows the Association to operate efficiently and effectively over time.

ASSESSMENTS
Assessments are usually described in the Covenants, although sometimes such matters are found in the Association’s other governing documents. Once established, assessments are collected by the Association for the purposes set forth in those documents. Matters for which assessments often are relied on include items such as road maintenance, snow removal, and street signs. Assessments are usually annual obligations due from each. Best practice suggests that the Board adopt a Collection Policy which will dictate such items as grace periods, late fees and delinquency procedures. Assessments are also commonly termed “Dues”.

COMMUNITY ASSOCIATION INSURANCE
The type of insurance that a Community Association requires will depend upon association governing documents, state statutes, and good business judgment. A management company can aide an association with risk management and insurance determinations.