What is a Community Association? A community association is a group of owners who act on
matters of common interest to the owners in a defined
subdivision or other common development, such as a
condominium or townhome cluster. A community
association’s overall goal is to preserve, maintain and
enhance the aesthetic and economic value of the
property. The community association itself is a
non-profit corporation incorporated by the filing of
Articles of Incorporation with the Secretary of State.
It is controlled by a volunteer Board of Directors
elected by the property owners.
What
is the role of a Board of Directors? It is the role of a board to set the policies,
standards, procedures, programs and budgets for the
community association. Its fiduciary duty requires all
directors to act in the best interests and for the
benefit of the corporation, thus the community as a
whole.
What
offices should be held by a Board of Directors? Typically there is a President, Vice President,
Treasurer and Secretary. There may also be additional
members of the board who do not hold offices.
What
is the difference between By-Laws and Covenants? Bylaws are the formally adopted governing regulations
for the administration and management of a community
association including (but not limited to) items such as
voting rights of member owners, procedures for electing
the board of directions and general powers and duties of
the board of directors.
Covenants are
usually created by the developer of the property, must
be recorded in the real property index for the county
where the property is located, and spell out the
essential elements of ownership. The Covenants generally
include items including (but not limited to) protective
standards, restrictions, and obligations in areas
ranging from architectural control to prohibitions on
various activities in order to promote harmonious
living; the mechanism for financial support of the
community association through assessments; and creates
the relationships binding all the owners to one another
and to the community association.
What
is CCIOA? The Colorado Common Interest Ownership Act is a Colorado
state statute that was put into effect on July 1, 1992.
The state statute’s requirements only apply to those
developments which contain common interest property
which is maintained by the assessments collected from
the owners by the association.
What
is the role of a committee? A committee is usually appointed by the Board of
Directors to complete a specific task. A committee
allows for additional community input into the decisions
that are made on the behalf of the community. They
perform research and present their findings and
recommendations to the Board of Directors. Some examples
of committees are for Elections, Nominations, and
Architectural Standards.
What
is an assessment? An assessment is the periodic amount due from each
property owner to cover the owner’s share of the common
expense and to build a reserve fund for the common
facilities and/or property which may require replacement
in future years to come. The annual assessment is
commonly termed the “annual dues”.
Should
we have a collection policy? Absolutely ! The Association is a non-profit
corporation, so it is a business and should be treated
in business-like manner. One of the most important
responsibilities that the Board has is to manage the
financial responsibilities of the Association.
What is
a management company? A management company is contracted by the Board of
Directors to provide services such as administrative
services, collection of assessments, obtaining bids for
subcontracted services, providing bookkeeping services
and assistance with board meetings. The management
company reports directly to the Board of Directors and
all decisions are made by the board.
