Bylaws

Art,

Don’t feel alone, me too
Chuck W.

BrainB

Let see if I have this right. Our HOA is a Idaho Nonprofit Corporation. I assume that must mean our bylaws are the Idaho Nonprofit Corporation Act (Title 30) that addresses a number of issues regarding any type of lawful nonprofit corporation formed under its' provisions. It covers directors, voting, meetings, required officers, etc., etc.

Art

CC&Rs and Bylaws

I offer a few thoughts on a complex issue. Others may differ.

There is a broad and significant distinction. CC&Rs are governed by property law and "run with the land". There is extensive common law for CC&Rs or restrictive covenants in general. CC&Rs must be recorded with the Register of Deeds in your county or municipality. As such, they will be discovered in any title search. Strict rules of interpretation have evolved in common law. In common law, those rules for Michigan were summarized in a recent Court of Appeals decision, Ribick v Inverrary LLC, “Restrictive covenants are to be read as a whole to give effect to the ascertainable intent of the drafter, and strictly construed against grantors and the parties seeking to enforce the covenants.  All doubts are to be resolved in favor of the free use of property.  Courts should not infer restrictions that are not expressly provided for in the controlling documents."  (Case citations eliminated)

CC&Rs typically include provisions for amendment that usually require approval by a super-majority of owners. However, amendments that include a major change may require 100% approval, or may be enforceable only for new owners. A recent North Carolina Supreme Court ruling, Armstrong v Ledges, temporarily posted at http://www.aoc.state.nc.us/www/public/sc/opinions/2006/640-05-1.htm provides an extensive discussion. Common law may vary from state to state. Welcome to the quagmire of property law.

A property owners association (POA) is typically defined in the CC&Rs, which gives it authority which "runs with the land". However, the POA is typically authorized in the nonprofit corporation act as a mutual-benefit (or membership) corporation. Bylaws are typically required under nonprofit corporation law. The bylaws describe the operational aspects of the POA. One is a member of the POA under nonprofit corporation law, but is an owner under property law. Bylaws are typically subordinate to the CC&Rs. Confusing, yes, but the distinction is important. Typically, the bylaws cannot create an obligation for the member that is not described as an obligation for the owner in the CC&Rs. Much litigation here. Because nonprofit corporation acts typically evolved from business corporation acts, there is much similarity. Members have few rights in the corporate world, which unfortunately applies to members of POAs unless separate law has been enacted, such as in Florida and Virginia.

Wikipedia is a good resource for descriptions of the various terms and concepts. Start with homeowners association. The article contains links to restrictive covenants and many other terms. Also read the article on bylaws.

So you though living in a common interest development (CID) governed by a property owners association (POA) would be easy. Many of us argue that the legislation should make CIDs/POAs be as much like municipalities as possible.