Legal Basis For Community Associations

Front 1

three defining characteristics of a community association

Back 1

1. membership is mandatory/automatic
2. certain documents bind all owners to be governed
3. mandatory lien-based assessments are levied t

Front 2

other names for a community association

Back 2

CIC = common interest community
CIRA = common interest realty association
CID = common interest development

Front 3

three types of residential comm assocs

Back 3

1. planned community (most)
2. condominium
3. cooperative

Front 4

characteristics of a planned community

Back 4

- owner owns his unit
- community owns common areas such as tennis courts, roads, etc.
- other names include HOA, OA, Townhouse association, Property owners association (POA) or PUD (planned unit development)

Front 5

characteristics of a condominium

Back 5

- individual owns his or unit
- individual has an undivided interest in the common elements of the community; each owns a percentage of the common elements
- the comm assoc itself owns no real estate

Front 6

characteristics of a cooperative

Back 6

- individual owns stock or membership in the cooperative
- holds a proprietary lease or occupancy agreement for unit

Front 7

proprietary lease/occupancy agreement

Back 7

defines members right in relations to the unit; the comm assoc owns all of the real estate as a non-profit

Front 8

associations can exist by themselves or be grouped in what two clusters

Back 8

- master/umbrella association
- mixed use development

Front 9

master/umbrella association

Back 9

consists of more than one residentail community association

Front 10

mixed use development

Back 10

consists of a mixture of res/commercial/industrial

Front 11

sources of legal obligations for a CA

Back 11

-federal, state and local statutes
- legal docs for CA
- lender requirements (i.e. set by mortgage institutions)
- standards set by professional bodies (i.e. auditing standards)

Front 12

three types of state statutes

Back 12

- general
- specific
- uniform

Front 13

general state statutes

Back 13

applies to CAs as well as other types of organizations

Front 14

specific state statutes

Back 14

applies only to one or more types of CAs (i.e. a condominium act which provides for est. and operation of condos as legal entitites)

Front 15

uniform state statutes

Back 15

an attempt to standardize specific state statutes that apply to CA's

ex: uniform condominium act

Front 16

governing documents

Back 16

define rights and obligations of owners and CA; create binding relationship between the two; establish mechanism for governing and funding

Front 17

hierarchy of governing documents

Back 17

- recorded map, plat, or plan
- declaration, CC&Rs, master deed, proprietary lease/occupancy agreement
- articles of incorporation (if)
- bylaws
- board resolutions

Front 18

recorded map, plat, or plan

Back 18

recorded in County Recorder's office before any units are sold to show the precise location of each and the common areas; helps define owner's title to property

Front 19

declaration, cc&rs, master deed

Back 19

covenants/deeds defines the bundle of rights of each owner; attach to the land no matter who owns it

rather than draw it up for each individual unit, it is a chain of title for each piece of real estate

Front 20

what do the dec, cc&R, master deed DO

Back 20

= defines portions of devleopment owner by owners/CA
= creates relationships binding owners to one another and hte CA
= est. protective standards, restrictions, obligations
= creates admin framework for operation and management (specific details pselled out in bylaws)
= provides for a transition of control of CA from developer to owners

Front 21

proprietary lease/occupancy agreement - in terms of governing doc hierarchy

Back 21

= defines member's rights and obligations in relation to the living unit (in a coop, this serves same purpose as declaration)
ex): defines terms of lease and rent, defines events which would result in termination of lease

Front 22

articles of incorporation

Back 22

helps limit liability of individual owners; entitles CA to the rights granted to all corporations under law (helpful for obtaining insurance, brining suit against another party)

indicates whether there will be a board of directors

Front 23

bylaws

Back 23

= formally adopted governing regs for administration and managemetn of a CA

address things such as requirements for membership, voting rights, procedures for electing board, general powers and duties of board

Front 24

indemnify - definition

Back 24

exempt an individual or entity from responsibility for claims made against the organization and reimburse them for damages/expenses incurred as a result of such claims

Front 25

resolutions

Back 25

resolutions establish rules and regs = they're a motion that follows a set format and is formally adopted by the board

Front 26

four types of resolutions

Back 26

- policy (affect owners rights and obligations)
- administrative (address internal operations)
- special (apply rule to a specific situation)
- general (involve routine events i.e. adoption of annual budget)

Front 27

book of resolutions

Back 27

orderly, indexed record of resolutions

Front 28

public offering statement

Back 28

not a governing document it is a disclosure statement that provides info on CA to prospective buyers mandated by state statute