Friday, February 12, 2010

Do you know which of your association’s governing documents carries the most weight?

Many times owners and board members will refer to an association’s governing documents with one, all-encompassing word: ”the Bylaws”. In fact, the Bylaws are one of several documents governing an association’s affairs and not the most important one at that! In addition to the Bylaws, there is the Declaration of Condominium or the Declaration of Covenants and Restrictions (for a homeowners’ association), the Articles of Incorporation and the Rules and Regulations (for those associations that have them).

If there were conflicting provisions in these governing documents, would you know which would control? The 1991 Third District Court of Appeals case, S & T Anchorage, Inc. v. Lewis, reinforced that a community association is a corporation that cannot act in any way that is not authorized in its Articles of Incorporation or Bylaws and that the Articles and Bylaws have to be consistent with the provisions of the superior document, the Declaration.

In addition, Section 617.0206 of the General Not For Profit Corporate Act provide that the Bylaws must not be inconsistent with the Articles of Incorporation. Thus, the order of priority amongst your association’s governing documents (from highest to lowest) are as follows:

1. Declaration of Condominium or Declaration of Covenants and Restrictions
2. Articles of Incorporation
3. Bylaws
4. Rules and Regulations

It is for this reason that matters of most importance be placed in your Declaration. In addition, when preparing amendments to your documents, it is advisable to review each of the association’s governing documents to amend all similar provisions. Communities confronted with especially high amendatory thresholds in their declaration may be tempted to more easily amend the Bylaws or Rules and Regulations instead. Doing so can result in enforcement problems down the road.

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