VV Home Owners Association

Standards, Guidelines & Code of Ethics

Collated by CPCN

November 22, 2014

Distilled
Source:

Wisdom of Ages Collated together and unabshedly stolen from many sources
From the long experience of the people running their own Associations democratically for ages.

Contents
1 BOARD OF MANAGEMENT (BoM) & General Body
A
Fundamental Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3
3

2 ADMINISTRATION:STANDARDS
A
Act, Rules and Bye-laws . . . . . . . .
B
Making & Alteration of the Bye-laws.
C
Interpretation of the Act or Bye-laws .
D
Official Immunity . . . . . . . . . . . .

.
.
.
.

3
3
4
4
4

3 FIDUCIARY STANDARD
A
Core Fiduciary Duties- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
4

4 BILL OF RIGHTS
A
HOMEOWNER RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B
HOMEOWNER RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5
5
6

5 GOVERNANCE GUIDELINES

7
7
7

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

.
.
.
.

MODEL CODE OF ETHICS

A
Board members should . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B
Board members should not: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ASSOCIATION FUNDAMENTALS

HOME OWNERS SOCIETY

STANDARDS, GUIDELINES & CODE OF ETHICS

Homeowners associations (HOA) are formed to preserve the aesthetics and integrity of a neighborhood,
address residents needs and, should anything happen, address major issues. With day-to-day duties that
include everything from managing the services to replacing power equipment, running a HOA requires a
substantial amount of financial resources, which traditionally comes in the form of monthly, quarterly or
annual fees. It is an undeniable fact that community associations benefit their respective communities by
reinforcing the rules and regulations that are mutually agreed by the members of association.
Popularity makes no law invulnerable to invalidation. Americans accept judicial supervision of their
democracy - judicial review of popular but possibly unconstitutional statutes - because they know that if
the Constitution is truly to constitute the nation, it must trump some majority preferences George Will
Note: As this was formulated in a hurry, errors are expected. Please feel free to review and add/correct any
of the provisions you might like to add /correct. There may be many more objectionable aspects (including violation
of laws). This may require thorough review before adoption.
2. Protect
he bye-laws, Standards, guidelines & ethics document of Home Owners Association be formulated
3. Maintain &
and kept for review over a period by Members.
This contains the distilled wisdom of many years of Home
4. Enhance the value of the Assets
Owners experience of creating a democratic apparatus to
manage their common interest development and running Every action of the Board is governed by these fundamenthe same essentially to:
tal duty of the Board. The General Body is the supreme
body and Board is assigned these fundamental goals and
1. Preserve
the Board represents the wishes of the General body. The
day to day management of the affairs of the Society shall
2. Protect
vest in the Board constituted in accordance with the provisions of the Act, the rules and the Bye-laws of the So3. Maintain &
ciety.
4. Enhance the value of the Assets

1
A

BOARD OF MANAGEMENT
(BOM) & GENERAL BODY

ADMINISTRATION:STANDARDS

Act, Rules and Bye-laws

Governing documents bind the Board as much as it binds

the members to abide by the Rule of Law. Any Bye-law
that is counter to the constitution, statutes and case laws
are neither enforceable nor can it stand judical review. It
is counter productive to have a Bye-Law if this is the case.

Fundamental Duty

The fundamental duty of the Board of Management are

1. Preserve
3

The Society shall keep a copy of applicable statutes and

its Bye-laws at the registered office of the Society, open
for scrutiny and inspection free of charge by the members,
at all reasonable times.

that favor them over the rest of the people, in ways not
essential to the performance of public duties. Where such
favors are accorded either by the builder or the Association, the same will be questioned and corrected. This
means official immunity for damages extends only to each
B Making & Alteration of the Bye-laws. act under color of law for which an official has authority
and that is not an abuse of discretion, not to everything
No Bye-law shall be made, altered or modified unless in an official might do while on the job.
conformity with the Rule of Law and the procedure prescribed under the Act and rules and unless.

1. A proposal to do so along with a text of the proposed amendments and the reasons therefor has
been communicated in writing to all the members
a clear 30 days in advance.

FIDUCIARY STANDARD

Members of a Board elected and officers appointed are

subject to the standards applicable to a trustee in a trust.
This is the highest fiduciary standard. This standard
2. The resolution is passed by not less than three reflects the not-for-profit character of a common interfourth of the members voting. All alterations to est community and the corporate quality of its governing
the Bye-law are to be approved and registered by body and the business it must conduct. It means that
the business judgment rule will apply to the decisions of
the Regualatory authorities.
the officials of a common interest community.

Interpretation of the Act or Bye-laws

A

Should any doubt arise as to the interpretation of the Byelaws in relation to the Act or Rules or in regard to any
other matter, there is a right to have delegated powers
construed narrowly, and complementary rights or immunities of members construed broadly, and when in doubt,
the decision must always be in favor of the claimed right
against an official action over the claimed power of an official to so act. The onus of proving that the official has
the powers to pass these rules/act lies with the one who
has usurped the powers and the onus to prove that the
usurper has no authority to pass these rules does not lie
on the Member. In case of doubt, the Society/ the Board
shall obtain the advice and direction of the Ombudsman
and jurisdictional Registrar of the regulatory authority.
Strict Interpretation of Powers- Whether Powers
be are right is determined by the rule : A power is strictly
interpreted. In cases of doubt, the presumption is not in
favor of a power.

Core Fiduciary Duties-

The Members of a Board and officers and staff of the Society as trustees of the Association have Core Fiduciary
duties towards the Members of the Society for whose benefit the Society/Association is instituted. This include
1. Core fiduciary duties of care
2. Absolute and undivided loyalty to beneficiaries
3. Prudence in dealing with trust funds
4. Disclose all material information when seeking information on trust outgoes and income and their
nature and disposal
5. No undisclosed Conflict of interest at all whatsoever.
6. Fair Process (approval by non interested directors)
or else burden on directors to show entire fairness.

Official Immunity

There is a duty not only not to have members rights legislatively impaired, disabled, or disfavored, but also not
to have some accorded special privileges or protections

7. No co-mingling of funds

4
A

BILL OF RIGHTS

original contract, i.e. changes in rules and amendments to governing documents or fines they are expected to pay. No fine shall exceed the true costs
of the remedy.

HOMEOWNER RIGHTS
1. I. Since living in a common interest development
(CID) requires an individual citizen to enter into a
contract with a governing association, the prospective homeowner must give written informed consent
to the terms of the associations rules and governing documents, but most especially to the Codes,
Covenants, and Restrictions (CCRs).The governing
documents comprise the contract between the association and the homeowner and should clearly spell
out the Homeowner Rights.

7. VII. If accused of violating rules, homeowner citizens are entitled to a speedy and public hearing
by an impartial body (Ombudsmen) not selected
by the board; the impartial body shall determine
the guilt or innocence of the accused and determine
what fines, if any, be imposed; that the accused be
informed of the nature and cause of the accusation;
be confronted with witnesses; and have a compulsory process for obtaining witnesses, records, and
advocates. Use of this system does not cancel a
citizens rights of appeal in the courts.

2. II No CID board shall abridge a citizens freedom

of speech or of the press either through direct order or through intimidation or any kind of public abuse; that no board shall abridge the right of
homeowner citizens to assemble peaceably or to petition the board for a speedy redress of grievances.
No CID board shall abridge freedom of religion.
Any right/privilege specifically NOT given to the
co-operative society will lie with the people i.e the
Homeowner Members of the Society. CID will make
NO rule or law or what ever named which violates or
abridges in any way the rights of the owners specifically provided under the rule of law of the land.

8. VIII. Residents shall be treated equally, and not

in an arbitrary fashion, without reference to age,
race, gender, cultural lifestyle, sexual orientation,
national origin, marital status, disability or familial
status as established by both state and central laws
and regulations.
9. IX. Rules enacted by the association and amendments to its governing documents must conform to
all state and central fair housing and health, safety
and welfare and other laws.
10. X. Elections shall be in the hands of the homeowner citizens, not the board: ballots shall be secret; no homeowner citizen shall be denied the right
to vote for failure to pay any fine or tax, including
assessments; directors shall serve no more than two
terms and be held accountable for their decisions;
the makeup of the board shall reflect the makeup of
the association membership.

3. III. Boards give a full, true and accurate accounting in writing of all association actions. No actions
shall be taken in secret.
4. IV. Homeowner citizens shall be entitled to speedy
access to all association records, particularly to financial records, contracts, and records of governance at any time without exception.
5. V. Homeowner citizens shall not be deprived of liberty or property, without speedy due process of law.
Nor shall private property be taken without just
compensation, specifically; there shall be no nonjudicial foreclosure.

11. XI Complaints All complaints will be answered

within 10 days from the date of receipt. Those complaints that cannot be resolved will be decided by an
independent OMBUDSMEN BOARD (independent
of the Governing Board) and elected by the Members. Complaints from the homeowner-consumer
may fall into two broad categories:

6. VI. Homeowner citizens shall have the absolute

right to vote on any changes to the terms of the

(a) Complaints arising during the time that the

developer controls the association or that he is
5

transferring control of the association to homeowners who have purchased homes (or flats.)
This is often the time that homeowners:

That is the fundamental corner stone of Sovereignty

of the Members.

i. complaint about construction defects;

ii. question whether or not the developer has
underfunded / misappropriated the reserve accounts (or not funded them at all).
iii. question whether the developer is delivering common areas and amenities as
promised in the public report, marketing
materials, and purchase contracts

HOMEOWNER RESPONSIBILITY
1. Read and comply with the governing documents of
the community.
2. Maintain their property according to established
standards.
3. Treat association leaders honestly and with respect.

(b) Complaints arising over governance issues after

homeowners assume control of the association.
Complaints include:

4. Vote in community elections and on other issues.

5. Pay association assessments and charges on time.

i. homeowner difficulty in getting access to

association records, especially financial
records
ii. challenges to election procedures and results
iii. complaints over assessment collection

6. Contact association leaders or managers, if necessary, to discuss nancial obligations and alternative
payment arrangements.

12. XII. Conflict of Interest: An official (director or

member of a committee) shall not vote on any of
the following matters:

8. Provide current contact information to association

leaders or managers to help ensure they receive information from the community.

(a) Discipline of the official (director or committee

member).

9. Ensure that those who reside on their property (e.g.,

tenants, relatives and friends) adhere to all rules
and regulations.

7. Request reconsideration of material decisions that

personally affect them.

(b) An assessment against the director or committee member for damage to the common area
or facilities.

(c) A request, by the director or committee member, for a payment plan for overdue assessments.

GOVERNANCE GUIDELINES
1. Annual meetings. Conduct at least one membership meeting annually, providing at least two weeks
notice to homeowners and more than two weeks if
specified in the governing documents or dictated by
state statute.

(d) A decision whether to foreclose on a lien on the

separate interest of the director or committee
member.
(e) Review of a proposed physical change to the
separate interest of the director or committee
member.

2. Assessments. Collect assessments and other fees

from homeowners in a timely and equitable manner
and in accordance with state statutes and boardapproved procedures.

(f) A grant of exclusive use of common area to the

director or committee member.

3. Communication. Provide at least one form of regular communication with residents, and use it to
report substantive actions taken by the board.

13. XIII. Any powers not secifically allocated to the

Board by the Members rests with the members.
6

4. Conict of interest. Disclose all personal and nancial

con icts of interest before assuming a board position
and, once on the board, before participating in any
board decisions.

for new rules and guidelines to all homeowners and

non-owner residents. Advise them when the board
will consider new rules and encourage input. Once
adopted, new rules and effective dates should be
distributed to every owner and resident.

5. Elections. Hold fair and open elections in strict conformance with governing documents, giving all candidates an equal opportunity to express their views
and permitting each candidate to have a representative observe the vote-counting process.

6
A

6. Financial transparency. Share critical information

and rationale with residents about budgets, reserve
funding, special assessments and other issues that
could impact their nancial obligations to the association. Give members an opportunity, before nal
decisions are made, to ask questions of a representative who is fully familiar with these nancial issues.

MODEL CODE OF ETHICS

Board members should
1. Strive at all times to serve the best interests of the
association as a whole regardless of their personal
interests.
2. Use sound judgment to make the best possible business decisions for the association, taking into consideration all available information, circumstances
and resources.

7. Foreclosure.
Initiate lien and foreclosure proceedings only as a last step in a well-defined
debt-collection procedureand only after other, lessdisruptive measures have failed to resolve a serious
delinquency issue in a specified period of time.

3. Act within the boundaries of their authority as

dened by law and the governing documents of the
association.
4. Provide opportunities for residents to comment on
decisions facing the association.

8. Governance and the law. Govern and manage the

community in accordance with all applicable laws
and regulations. Conduct reviews of governing documents to ensure legal compliance and to determine
whether amendments are necessary.

5. Perform their duties without bias for or against any

individual or group of owners or non-owner residents.

9. Grievances and appeals. Allow residents to bring

grievances before the board or a board-appointed
committee and follow well-publicized procedures
that give residents the opportunity to correct violations before imposing fines or other sanctions.

6. Disclose personal or professional relationships with

any company or individual who has or is seeking to
have a business relationship with the association.

10. Records. Allow homeowners reasonable access to

appropriate community records, including annual
budgets and board meeting minutes.

8. Always speak with one voice, supporting all duly

adopted board decisions even if the board member
was in the minority regarding actions that may not
have obtained unanimous consent.

7. Conduct truly open, fair and well-publicized elections.

11. Reserve funding. Account for anticipated longterm expenditures as part of the annual budgetdevelopment process, commissioning a reserve
study when professional expertise is warranted.

Board members should not:

1. Reveal condential information provided by contractors or share information with those bidding for association contracts unless specically authorized by
the board.

12. Rules. Uniformly enforce all rules, including architectural guidelines, but only after seeking compliance on a voluntary basis. Distribute proposals
7

2. Make unauthorized promises to a contractor or bidder.

2. Associations are the most local form of representative democracy, with leaders elected by their neighbors to govern in the best interests of all residents.

3. Advocate or support any action or activity that violates a law or regulatory requirement.

3. Associations provide services and amenities to residents, protect property values and meet the established expectations of homeowners.

4. Use their positions or decision-making authority for

personal gain or to seek advantage over another
owner or non-owner resident.

4. Associations succeed when they cultivate a true

sense of community, active homeowner involvement
and a culture of building consensus.

5. Spend unauthorized association funds for their own

personal use or benefit.
6. Accept any gifts, directly or indirectly, from owners, residents, contractors or suppliers or make use
of Association resources for personal benefit.

5. Association homeowners have the right to elect their

community leaders and to use the democratic process to determine the policies that will protect their
investments.

7. Misrepresent known facts in any issue involving association business.

6. Association homeowners choose where to live and

accept a contractual and ethical responsibility to
abide by established policies and meet their nancial
obligations to the association.

8. Divulge personal information about any association

owner, resident or employee that was obtained in
the performance of board duties.
9. Make personal attacks on colleagues, staff or residents.

7. Association leaders protect the communitys nancial

health by using established management practices
and sound business principles.

10. Harass, threaten or attempt through any means to

control or instill fear in any board member, owner,
resident, employee or contractor.

8. Association leaders have a legal and ethical obligation to adhere to the associations governing documents and abide by all applicable laws.

11. Reveal to any owner, resident or other third party

the discussions, decisions and comments made at
any meeting of the board properly closed or held in
executive session.

9. Association leaders seek an effective balance between the preferences of individual residents and
the collective rights of homeowners.

ASSOCIATION
FUNDAMENTALS

10. Association leaders and residents should be reasonable, flexible and open to the possibility and benefits of compromise, especially when faced with divergent views.

1. Associations ensure that the collective rights and interests of homeowners are respected and preserved.

**********************************