Glossary Of Words Used in Associations

Articles of Incorporation: A charter document filed with the state that creates corporate status for a common interest development.

Association: A nonprofit corporation or homeowner group that is unincorporated, created for the purpose of managing a common interest development.

Board of Directors: The elected, deliberative body responsible for managing, planning, setting policy and operation of a homeowner association/common interest development.

Bylaws: An organizational document that sets up the structure and guides the board of directors in operating the corporation.

CC&Rs: Covenants, Conditions and Restrictions (sometimes called the "declaration"). A document that describes restrictions on the way land may be used. The key governing document for common interest developments.

CID: Common Interest Development. A community apartment project, condominium project, a planned development or stock co-operative.

Common Area: The entire CID except for separate interests.

Common Interest Development: (see CID)

Community Apartment Project: A CID in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located thereon.

Condominium: An undivided interest in a common area with the other owners coupled with a separate interest in a space called a unit.

Condominium Plan: A plan that describes the physical characteristics of a condominium project.

Condominium Project: A development consisting of condominiums.

Declarant: The person or group that records (and signs) the original declaration of CC&Rs establishing a common interest development, often the developer of the CID.

Declaration: (see CC&Rs)

Director: A member of the board of directors. In most cases a director is an uncompensated homeowner volunteer who is elected by vote of the association membership or appointed by the Board to fill a position that was vacated by resignation or inability to continue serving by a board member.

Exclusive Use Common Area: A portion of the common area that is designated for the exclusive use of one or more, but fewer than all of the owners of separate interests. May be designated in the CC&Rs. Certain exclusive use common areas are identified by law.

Fiduciary Duty: Literally, a duty of trust depending on public confidence.

Practically, it is the duty (of a director) to consider the best interests of the entire association when making corporate deci-sions. The duty includes an obligation to put self interest aside if it conflicts with the best interests of the association.

Governing Documents: The declaration of CC&Rs and other documents such as bylaws, articles of incorporation and rules which govern operation of the association.

Homeowner Association (HOA): The collective group of home-owners in a common interest development.

Member: A person or persons entitled to membership in the association, usually by virtue of ownership of a separate interest. Usual rules: although owners may be multiple, generally only one member may exercise membership rights at the time.

Nonseverability: Usually a "severance" clause in the CC&Rs; of a CID that prevents a member from separating his or her interest in the common area from that of the rest of the membership.

Owner: The record owner of a separate interest. A "member" of the association by virtue of ownership in a separate interest.

Planned [Unit] Development (PD or PUD): A PUD is generally a CID with common area, usually owned by the association. Separate "lots" are owned by individual members. PUD is not really a legally recognized term - the proper term is PD for planned development but the acronym is widely understood to equate to PD.

Pro forma: An item or document provided in advance in a pre-scribed form. The association must provide a "pro forma" budget to the membership each year in advance of the start of the fiscal year. This is an "estimate" of income and expenses for the coming year, usually based on the prior year or years income and costs.

PUD: (see Planned [Unit] Development)

Restricted Common Areas: Same as Exclusive Use Common Area. When Restricted Common Areas exist, they are usually des-ignated on the condominium plan.

Rules/Regulations: The association document, which is normally prepared at the direction of the board of directors, that serves as a common reference for members of the CID and reflects CC&Rs and official policy. Sometimes owners are allowed to vote on adoption of rules and/or regulations. Separate Interest: In a community apartment project, the exclu-sive right to occupy an apartment; in a condominium project, an individual unit (the interior airspace); in a planned [unit] develop-ment, a separately owned lot, parcel, area, or space; in a stock co-operative, the exclusive right to occupy a portion of the real property.

Stock Cooperative: A CID in which a corporation is formed to hold title in a property and the corporation is owned by sharehold-ers who have a right to occupy a portion of the real property.

Tenants in Common: Partners in ownership of property.

Townhouse: A style of housing structure that employs common walls.

Unit: The separate interest in a condominium project. This is the residential, exclusive use area often referred to as the "air space" within the building that is owned by the individual member. Sometimes it includes the deck, balcony, a garage, etc. The declaration (CC&Rs) and deeds should be consistent on what describes a unit", but they are not always so.