What's the difference between HOA's, CC&Rs, Bylaws, and Rules & Regulations?
One common question in real estate, especially from first-time homebuyers is “What are CC&Rs?” We at Build Idaho have also found there is often confusion about the differences between CC&Rs, bylaws, rules & regulations, and how the HOA fits into it all. This blog entry hopes to break it all down and answer these questions.
What is a Homeowner’s Association (HOA)?
An HOA is a legal non-profit entity filed with the state and is responsible for managing and maintaining the assets of the community (i.e. the appearance of the homes and properties as well as common areas within the neighborhood/community). Some areas build communities without HOAs, making them an attractive place to buy for people that don't want to deal with an HOA. As a homeowner, you are a member of the HOA. As such, you are entitled to use common areas, run for a seat on the board of directors, and live on the property. It also entails an explicit agreement that you will follow the HOA governing documents. Governing documents are Covenants, Conditions, & Restrictions (CC&Rs), Bylaws, and Rules & Regulations. These are explained in detail below.
What are CC&Rs?
CC&Rs are Covenants, Conditions & Restrictions, which cover the rights and obligations of the HOA to its members and vice versa. They are basically the rules of the neighborhood. Their main objective is to lay out rules to protect, enhance, and preserve property values in the community. CC&Rs are part of routine home ownership and maintenance. Rules such as mowing your lawn, keeping yards weed-free, not painting a house bright colors, and keeping your property free of trash and debris.
In addition, CC&Rs can have very specific rules that are targeted to previous behaviors or events that may be problematic for some people. These are usually specific to the community. Some CC&Rs have rules about which breeds and sizes of dogs are allowed, that you can’t park a car on the street or leave it in the driveway, which types of plants aren’t allowed in the neighborhood, or what types of additions homeowners are/are not allowed to make.
Non-compliance with community CC&Rs can result in fines, suspension from community amenity use, forced compliance, or a lawsuit against you. When looking for a house with an HOA, ask to see a copy of the CC&Rs to judge if they are a good fit for you.
What are Bylaws?
Bylaws outline the governance structure for the HOA. This includes election cycles, board member eligibility, as well as the duties and responsibilities of HOA board members. Bylaws also include information for creating an annual budget as well as determining assessment amounts and collection procedures. If you want to be elected to the board, details are found in the bylaws. Learning the community’s bylaws will keep you informed about how your HOA is run.
What are Rules & Regulations?
Rules & Regulations exist as a catch-all for topics not covered under the CC&Rs and Bylaws. The Rules & Regulations are the most easily changed community laws because they are designed to evolve as the community needs them to. For example, a massive wind storm rolls through that blows trees over and knocks tree branches across people’s yards. Current R&Rs may state that all yards must be cleaned and kept debris-free. However, this storm knocked over so many branches that people were forced to leave them in their yards until trash day or until wood chippers could be brought in to dispose of the branches. The R&Rs could be changed to have a provision to allow for slow cleaning in the aftermath of future giant storms.
Rules & Regulations can be changed by a board vote and community review. Because the community gets to view and comment on a proposed rule change, everybody gets a chance to weigh in on the decision, as opposed to the board singularly voting on an issue. The neighborhood board then takes the community’s comments into consideration when voting to adopt or dismiss the potential new rule.
HOAs are the community/neighborhood governing body made up of people living in the community. CC&Rs are the rules of the neighborhood that the HOA enforces. Bylaws are the system of governing the HOA. Rules & Regulations are the other, smaller rules that may not be expressed in the CC&Rs that are most easily changed. Homeowners Associations aren’t for everybody, but they are a useful tool for keeping the neighborhood, clean, orderly, and uniform.