If you buy a home (such as a single-family home, condo, or townhome) in a planned, covenanted community, you will most likely be required to be part of a homeowners’ association (HOA). The HOA will have its own governing documents in the form of a Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws.
Read on find out the difference between CC&Rs and bylaws.
The Declaration of CC&Rs is the legal document that lays out the guidelines for the planned community. The CC&Rs are recorded in the county records in the county where the property is located and are legally binding. This means that when you purchase a lot or a home in a planned community, for example, you automatically become a member of the HOA.
Basically, the CC&Rs are the rules of your neighborhood. They govern what you can, cannot, or must do with respect to your home. For example, the CC&Rs may require you to keep your garage door closed or prohibit certain types of landscaping. It is also typical for the CC&Rs to regulate things such as:
If you don’t abide by the CC&Rs, the HOA may impose penalties for any violations. (Learn more about Covenants, Conditions & Restrictions in HOAs.)
An HOA, which is typically set up as a nonprofit corporation, is an organization established to manage a private, planned community. Like other corporations, the HOA is governed by a board of directors (who are elected by the members) and a set of rules called bylaws.
The bylaws govern how the HOA operates and contain the information needed to run the HOA as a business. For example, the bylaws cover matters such as:
If you are thinking of purchasing a home in an HOA community (or already live in one), you should take the time to familiarize yourself with both the CC&Rs and the bylaws, so that you are aware of any neighborhood restrictions and you fully understand how the community operates.