One the most frequent questions asked of HOAs and HOA Boards in Colorado and beyond is “what gives the HOA the right to do X?”. Indeed, when I first started working at CAP Management, I had no idea what HOAs did and how they do it. And with the massive growth in Denver, Lakewood, Aurora and the surrounding area, this question comes up again and again.
A lien-based community
When a person purchases a home in an HOA, they enter into a lien-based community. The HOA holds a lien over the all the properties in the community which gives first, the developer, and then the HOA Board the authority to pass rules, contract services, and, ultimately collect dues and enforce regulations in the community.
What this means is that an HOA Board has the authority, within reason, to work on behalf of the community as a whole. For the most part, this entails mundane items like insurance, landscaping, etc. However, the HOA Board is also empowered to enforce rules and collect dues – items which are far more fraught for homeowners.
An HOA Declaration
The best way to think about an HOA and HOA Board is that it is the smallest and most local form of government. Your HOA will have its own form of a Constitution – it’s called the Declaration (or, sometimes, Articles of Incorporation). From the Declaration comes the lien-based nature of the community which gives the HOA Board the authority to make decisions for the community as a whole. The Declaration is the source of the rules themselves or will grant the board the authority to develop rules and policies for the community. It will also define a process by which amendments can be made and how the Board is elected.
One common misconception is that the rules come from the Association bylaws. This is incorrect. The bylaws spell out how meetings are conducted and derive their contents from the Declaration. But, if you have a question about enforcement, dues collections, amending the rules, etc. you should first start with the Declaration and not the bylaws.
Your HOA and HOA Management company will also most likely have summary documents, which will give plain English versions of the rules and regulations. While these types of documents do have the weight of the declaration behind them, they are designed to be more easily understood to lay people. One of the striking things about the governing documents is that they are written in formal, legal language and are drafted by the attorney for the Association. They are filed online with the Secretary of State and other regulatory agencies. For example, Colorado law requires every community to have formal documents for collections, running a meeting, and rule enforcement – these take the provisions of the Declaration and interpret them into more easily readable and centralized policies.
Your HOA Board generally will have broad authority but that authority is not unlimited. If you are concerned about how your HOA is being managed, request a copy of the governing documents or view them online. You HOA is required by law to make them available to you, within a reasonable amount of time. At CAP Management, your governing documents are stored on our WebPortal.
One last thing to remember is that almost any rule in an HOA can be amended – the best way to make change is to look into the process and get started!