A homeowners association’s governing documents include documents that regulate the operation of the association and the common interest it was formed to manage. There are three types of governing documents:
● Operating Rules & Regulations
The founders of the HOA must clearly define and strictly adhere to the documents for the organization to succeed and function within Minnesota state regulations. Below, we provide an overview of these three components.
Bylaws contain the policies, powers, and procedures relating to the corporate governance of the HOA. The bylaws establish how the association will function. It also sets up the structure for the board including the number of board members, required qualification, and requirements for elections or appointments.
The organization can amend the bylaws according to the guidelines set up for making the amendments in question.
The declarations, conditions, and restrictions establish the majority of the power and the rights and responsibilities of the members.
Declarations typically contain the following provisions:
● Assessment obligations of the members
● Maintenance responsibilities
● The authority of the association to enforce the rules
● How disputes are resolved
● Insurance requirements
● Property use restrictions
The restrictions contained in the declarations are crucial to the stability of the organization and upholding all agreed-upon arrangements. Every individual within the organization understands and accepts the restrictions.
All declarations, conditions, and restrictions must be deemed reasonable by the group. Furthermore, they are legally enforceable unless a court decides otherwise. The regulations must also adhere to statutory or common law. If the regulations are reasonable and legal, then the HOA members have the right to enforce the rules.
Keep in mind, the declarations, conditions, and restrictions may be subject to amendment if the organization’s circumstances change over time. Therefore, the association may choose to formally amend and restate a rule to reflect the change in the organization.
Operating Rules & Regulations
The operating rules apply to the management of the operations, developments, and the business affairs of the HOA. Operating rules do not require membership approval for their adoption, amendment, or annulment by the board.
Specific areas that would fall under the governance of an operating rule may include:
● Use of the common areas, such as facilities or amenities
● Use of individual property as governed by the HOA standards
● Member discipline, including any penalties or fines for violations of rules, as well as the procedure for imposing the discipline
● Any procedures adopted by the HOA for resolving disputes
● Any procedures for reviewing and approving a proposed change to a member’s property
● Procedures for elections or appointments
The Civil Code & Exemptions
The Civil Code dictates the procedures for adopting rules & regulations or amendments by the board. It also makes provisions for how the association can reverse a rule.
Certain board actions are exempt from procedural requirements for adopting, amending, or repealing operating rules. Actions may include:
● A decision regarding the maintenance of the shared property
● A decision on a specific matter that does not apply in general circumstances
● A decision setting the amount of a regular or special assessment (i.e., a budget or reserve study item)
● A rule change that is required by law
Do You Need Assistance With Your Governing Documents?
If you have any further questions about governing documents, how to set them up, or how to manage them, then feel free to call RowCal at 651-233-1307. We can provide professional consultation and management services for your HOA in Minneapolis and St. Paul.