Declaration
& Bylaws
Declaration (CC&Rs) & Bylaws combine to complete the first leg of your governing documents triumvirate.
Common interest community (CIC) Declarations or Covenants, Conditions and Restrictions (CC&Rs) are dedicatory instruments recorded by county governments that "run with the land" to form the foundation of every association's governing documents. Bylaws partner with the declaration / CC&Rs to establish the broadest forms of organization-specific governance and restrictions. Both documents typically incorporate statutory language from your state statutes (CIC statutes, nonprofit corporation act, etc.)
If your declaration & bylaws were a Scrabble board, every single piece that's played must follow the structure they create. Articles of incorporation are not discussed here because their critical role allowing the formation of a corporation generally gives way to the Bylaws once things are “up and running” and almost certainly after homeowners take control from developers. Moreover, some CICs are not incorporated. Many state and county governments provide an online technology portal that allows searching for corporations and for recorded documents, respectively.
Reference the Uniform Common Interest Ownership Act and Uniform Condominium Act.
This is a the perfect spot to remind ourselves that your community association should have a mission. Many co-op models include a mission for members to live in "community" with one another. Most condominium, HOA and/or planned communities have never adopted a formal mission and, in the grandest scheme of things, operate to protect, preserve and potentially improve financial and physical components held in common (not to "protect property values").
CICs are hyper-local governments. Their covenants, conditions and restrictions and bylaws function almost exactly like a city charter. You can compare and contrast similarities and differences between The Charter of the City of Seattle (or another city of your choosing) and your CIC governing documents.
Covenants that Run with the Land
Covenants without Assessments succinctly elucidates common types of covenants that run with the land such as easements and shared maintenance agreements. Covenants in small communities with no regular assessments are short and sweet. No matter their length, covenants are binding and generally last for the life of a property (and even beyond).
EXAMPLES: What's in the Declaration / CC&Rs?
Formation of the association subject to a specific state CIC statute (or not)
Allocated interest for Units
for condominiums, interest is often divided into % of common elements (CE) and residential limited common elements (RCLE)
Powers of the Board and of the association
Dispute resolution and methods of enforcement
Restrictions on the use of units such as smoking, rental caps, keeping pets, conducting certain kinds of business and other activities
Exhibits that demarcate components, define responsibilities and references to the survey map and plans
Insurance requirements and responsibility for costs to restore damage in common elements and Units
Rubric for defining and approving capital improvements
Unit Access
EXAMPLES: What's in the Bylaws?
Bylaws have the least to do with the physical construction of your community (condo vs. townhomes vs. single family homes) and the most to do with its governance structure (board composition, meetings, quorums, voting, etc.)
Basics for all meetings of the association including members / owners, the Board and committees (quorum, place & time, notice, etc.)
Board and Committee composition (who can serve, term limits, elections, removals, vacancies, officer roles, etc.)
Voting
Ethics, oath of office and conflicts of interest clauses (highly recommended; statutorily required in a select states)
Communications Policy (read Bylaws Words of Wisdom)
USE RESTRICTIONS
N.B. Use restrictions are recorded in dedicatory instruments (Declaration / CC&Rs). Modifying restrictions to the use of units (smoking, rental caps, keeping pets, conducting certain kinds of business, etc.) typically requires a super-majority of owners (from 67% to 90% or more) to agree to amend or restate governing documents.
Filmore v. Centre Point Unit Owner's Association (2015 - WA State Supreme Court) | Blog Article about the Filmore Opinion
The 90% requirement in WA state can be avoided by adopting WUCIOA with a 67% vote and incorporating further amendments. Get help!
YOUR state statutes dictate changes to use restrictions. RCW 64.34.264:
(4) Except to the extent expressly permitted or required by other provisions of this chapter, no amendment may create or increase special declarant rights, increase the number of units, change the boundaries of any unit, the allocated interests of a unit, or the uses to which any unit is restricted, in the absence of the vote or agreement of the owner of each unit particularly affected and the owners of units to which at least ninety percent of the votes in the association are allocated other than the declarant or such larger percentage as the declaration provides.
THE DECLARATION PREVAILS
Many state statutes directly establish the hierarchy of governance like this: If a conflict exists between the declaration and the organizational documents, the declaration prevails except to the extent the declaration is inconsistent with this chapter.
No Variation by Agreement
Most CIC statutes throughout the United States prohibit variation by agreement.
No variation means statutory language supersedes the language in your governing documents (especially indicated by the term notwithstanding) except where sections of a statute specifically state your governing documents control (i.e. unless provided otherwise in the Declaration -OR- if the bylaws so provide, etc.).
EXAMPLE OF STATUTORY 'NO VARIATION' LANGUAGE
a) Except as specifically provided in specific sections of this Chapter, the provisions of this Chapter may not be varied by the declaration or bylaws. To the extent not inconsistent with the provisions of this Chapter, the declaration, bylaws, and articles of incorporation form the basis for the legal authority for the planned community to act as provided in the declaration, bylaws, and articles of incorporation, and the declaration, bylaws, and articles of incorporation are enforceable by their terms.
(b) The provisions of this Chapter may not be varied by agreement; however, after breach of a provision of this Chapter, rights created hereunder may be knowingly waived in writing.
EXAMPLE II
Except as expressly provided in this chapter, provisions of this chapter may not be varied by agreement, and rights conferred by this chapter may not be waived.
EXAMPLE III
In the event of a conflict between the provisions of the declaration and the bylaws, the declaration prevails except to the extent the declaration is inconsistent with this chapter.
Declarations / CC&Rs, bylaws, rules and regulations and more will never be perfect, but they can be significantly improved in a number of ways. Amending and restating these documents is often prudent and even necessary.
WHY Restate Your Governing Documents?
Developers ("declarants") leave room for substantial improvement
Laws change. Community associations benefit from written material that complies with current law
Amendments over years or decades create hanging chads and an unintuitive soup of requirements
Codify material changes reflecting best practices and community idiosyncrasies by a vote of the members
ABOUT Restating your Declaration & Bylaws
Restatements (often called amendments and restatements) create a single, fresh copy of your governing documents
While not required, your declaration and bylaws are often restated concurrently because they have inter-dependencies
Amendments and restatements to adopt RCW 64.90 (WUCIOA) require a 67% affirmative vote of the members
Bylaws amendments may have a lower threshold, but cannot update several fundamental elements
Limited amendments may be enacted by the Board without a vote of owners pursuant to RCW 64.90.285(11).
The steps to restate are similar to the steps to amend, but the volume of content updated is much greater
You must retain professional AND volunteer assistance!
Restatements are not a DIY activity, but they should absolutely involve homeowner volunteers
Volunteers must be prepared to review an immense amount of material.
One or more incredibly involved volunteer(s) makes all the difference.
Engage a professional who can actively engage your volunteers through all the steps, provide clear options, and recommendations.
Engaging an attorney is best left for the end of the process to dot the "I's" and cross the "T's."
Carefully review all recommendations!
Template-based language is efficient, but may contain restrictions that do not suit your community.
There are items you might not catch until you review material more than once.
Using a collaborative, web-based content management system helps immensely.
STEPS to Amend and Restate your Declaration & Bylaws
Get help! 🛟 Amendments and restatements are not DIY engagements.
Write down WHY: list specific goals, provide example language to incorporate, and identify problem areas in existing documents.
Make sure your owners are informed early in the process. Encourage owner comment and participation.
Form a governing documents committee.
Committees, especially those including 2+ non-Board member volunteers, promote owner-centric processes.
Volunteer engagement often has the added benefit of reducing professional assistance, thereby reducing the amount of time and cost required to achieve superlative results.
Putting your owners at the center of the process makes sense when you need a 67% super-majority to approve the changes.
Identify one or two committee volunteers to drive the process forward. Meet regularly, keep minutes and share progress in open Board meetings. Keep detailed notes as you work through the governing documents (queue content management!)
Once your committee work wraps up, engage in Board review and vote to move forward.
Engage an attorney only when you're ready.
Explain what you've accomplished.
If you're going to exchange revisions, ensure you have an easy way to track changes and recommendations.
Make time to engage in one or more meetings. Email threads might limit your progress and lead to errors and omissions.
No detail is unimportant! Your declaration / CC&Rs runs with the land. Your bylaws manage how you govern. Get them right!
After finalizing revisions, package everything up with an executive summary document.
Most owners are not going to read dozens of pages of material. Create a summary of the most noteworthy changes.
Communicate. Communicate. Communicate with your owners. Get out the vote!
Schedule a special meeting of members (owners) to review the material.
Maximize engagement by using an electronic voting / balloting system.
Struggling to reach 67% (or other threshold)? Ask volunteers to engage owners individually via phone and email. It works!
Aim for a small margin of votes above and beyond the 67% threshold.
Mission accomplished?!
Meticulously document and retain voting records.
Have your declaration and bylaws restatements signed by two directors and notarized.
Submit your declaration / CC&Rs for recording by your county government.
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