Question from an IREM Member: "I am taking on a new responsibility of establishing HOA bylaws for a residential developer and am sourcing managers who have experience in this area. I would like to know what types of problems you have encountered with bylaws and what you wish you could change about how your HOAs are structured. All feedback/references is greatly appreciated."
Be careful - this can get to be a very technical legal issue. Most we see are generally broad and leave the rules up to the homeowners once they get control. You should be talking to an attorney who has experience setting these up.
Association By-laws are fairly general in nature and usually do not pose too many issues - most concerns are in the Declaration (or CC&Rs as they are sometimes called).
Watch out for fixed dates for annual meetings - if you get several associations with docs from the same attorney, your staff may be faced with attending multiple meetings on the same night. Best for meeting dates to be general i.e. "annually during the first quarter of the calendar year at a time and place determined by the board of directors".
Also, I have often found the by laws in conflict with the declaration - in which case the by laws prevail.
"You will want to review and think thoroughly as to the make up of the members of the board of directors - as to the NUMBER of the members of the board and their terms - all relative to the size (and complexity) of the property involved. You typically want an odd number - in the range of 5, 7, 9, 11, etc. You want enough members to represent the owners but not too few - or too many. You will want their terms staggered - IE: balanced between 1, 2, 3 year terms so that not all are being replaced at one time; A good idea is to consider limiting the terms that a member can serve before having to sit out a term. Consider limiting officers (Pres, VP, Secy, Treas) from staying in office too long (like more than 1 or max 2 - one year terms)."
The Bylaws will provide the duties of the Board. One thing that has come up from time to time is that the Bylaws do not provide the Board of Directors with the authority to obtain a loan. When the Association needs to fund a large or small repair project and may need to borrow funds the board's are then strapped with having to obtain member approval.
Another common problem is that the Bylaws conflict with language in the CCRs.
One comment: Do not include more than seven members on the board of directors. I would recommend five directors for association smaller than 200 units. Most of the difficult associations that I have managed have boards that are composed of nine or more (one was seventeen!) and in my humble opinion, it is just too difficult to gain a consensus with a board that large. Also, for reasons that are beyond my ken, the larger boards tend to be more fractious.