We strongly believe that homeowners who understand how associations operate are more satisfied homeowners. The following FAQs and useful hints may help answer general questions about community associations, the role of the Board and community management in general. If you don’t find an answer or if there’s something specific we can help you with, please contact us.
In California, a community or homeowners association is often referred to as a common interest development. A common interest development (CID) is a planned neighborhood or community where all owners are members of the Association. The Association is a mutual benefit non-profit corporation subject to all Civil and Corporation Codes in California. The homeowners association is responsible for repairing and maintaining all aspects of the common area property owned by the association on behalf of the community.
The Board of Directors consists of members of the Association who are elected, on a volunteer basis, to represent the interests of the community members and to conduct the business of the Corporation. In a new community, there are also Declarant Board Members. Declarant Board Members are employees of the Developer who serve as Board Members for the same purpose while the property is under construction. Until such time when homeowners are elected to the Board, based on the governing documents, the Declarant will hold the majority of the seats. When a builder purchases a community, they have what are called Declarant Rights and hold a vested interest in the community similar to a homeowner.
Board Meetings are held on a basis as required by your governing documents. The Regular Board Meetings are to conduct regular association business including ; issuing and review contracts, approving proposals, architectural reviews, reviewing delinquencies, reviewing financials, holding hearings for violations and any other association or homeowner related business. There is a “homeowner forum” portion during each regular meeting whereas homeowners may briefly address the Board with questions or concerns. Any items which are not listed on the agenda cannot be discussed or decided upon and must be placed on the following meeting agenda as requested by the Board. The Annual Meeting is conducted annually and is a meeting of the members where the Annual Election occurs and the members can openly discuss items and concerns.
Generally, the legal documents consist of the Articles of Incorporation (which establish the Association as a legal entity and Corporation), the Bylaws (which outline Board responsibilities, member rights to information and scheduling of meetings) and the Covenants, Conditions and Restrictions (CC&Rs). The CC&Rs serve as the legal contract between each member and the Association. The CC&Rs also detail property restrictions and protections such as architectural control, use restrictions, assessment and voting rights and lender considerations and general operating requirements of the Association itself.
Every year, the Board reviews and adopts a budget for the community association. The Budget is published to the membership annually as required by law. The assessments pay for the maintenance, operation, upkeep and long-term repair and replacement of all the common areas within your community. Also, as a non-profit corporation, your Association has administrative expenses including insurance, financial statement reviews, tax filings, license renewals, and management.
The Association is required to distribute the annual budget and an annual financial review which is generally conducted by an independent CPA. Copies of these documents are available at any time. As a member of the Association, each owner may also review a monthly financial report whenever requested.