Q. I just moved into a Union County community that had its homeowners’ association (HOA) formed in 1988. It was recently discovered that while the Articles of Incorporation and all the required updates of the covenants and restrictions are in order, apparently the bylaws of the HOA are not recorded in the county records.
Does this omission limit what the HOA can do in enforcement of the covenants and restrictions or dealing with any of the normal HOA management tasks? If so, what recourse is there for the HOA?First, let’s distinguish between the various governing documents for an HOA.
The Declaration of Covenants, Conditions and Restrictions (“CCRs”) or the Declaration of Condominium dictate the development scheme for a community and govern the use of the real estate by placing limitations and restrictions on how the lots, homes, townhomes, condominiums and common areas may be used.
Typical CCR provisions include the setting of minimum sizes for lots and homes; provisions for the maintenance of homes and common areas; the establishment of an architectural review committee; and restrictions on parking, pets, fences, nuisances, etc.
Because the CCRs affect the use of, and title to, real estate, they must be recorded with the Register of Deeds to be effective. Bylaws, however, which pertain primarily to the operation of the HOA, rarely have to be recorded to be effective.
Most HOAs are organized by the community’s developer as nonprofit corporations. Corporations are formed by the filing of Articles of Incorporation with the N.C. Secretary of State, and are governed in part by the N.C. Non-Profit Corporations Act.
As noted, how a corporation operates is also governed by its bylaws. Typical bylaw provisions include the establishment of various classes of membership and voting rights; protocol for member meeting; and the establishment of the number, terms, qualifications, powers and duties of the directors and officers.
Usually, we don’t see provisions dealing with the use of real estate in an HOA’s bylaws. For that reason, and because the law doesn’t require it, bylaws usually are not recorded with the Register of Deeds.
I say “usually” because we often see bylaws attached as an exhibit to some recorded CCRs, not because the law requires it, but because recording the bylaws makes them part of the public record and makes it easier for owners, purchasers, attorneys and real estate agents to obtain them.
I have some HOA clients whose bylaws specifically state that any bylaw amendments must be recorded to be effective, but this is the exception and is not typical. Thus, unless your bylaws contain a provision that says they have to be recorded in order to be effective and enforceable, there is no need to record them.
Charlotte attorney Michael Hunter focuses on community and condominium association law for the firm of Horack Talley.
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“Ask The Experts” Articles have been Reprinted with permission from the Charlotte Observer
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