Community Association Definitions
What is Community Association Management?
At Grace Property Services, this means that we work in conjunction with the association’s board of directors to maintain or increase the property value of the association. We work at the discretion and direction of the board of directors and to follow any legal instruction.
What does Grace Property Services do for our Community?
Grace Property Services is a contracted vendor that assists the board with the running of the day to day operations of the association. Some of our duties include receiving the owner assessments, paying the association invoices, record keeping, handling unit owner calls and delegating certain maintenance repairs. Additionally, we provide to the board our years of experience and insight in the community association management field.
What are the different types of Associations?
This is a form of community living in which all of the owners own their individual units and share a percentage of ownership of the common elements. The association is governed by an elected group of unpaid volunteers known as the Board of Directors. Subject to Ohio Revised Code (ORC) Chapter 5311.
This is a form of community living in which all of the owners own their individual homes and individual lots and share a percentage of ownership of the common elements. The association is governed by an elected group of unpaid volunteers known as the Board of Directors. Subject to Ohio Revised Code (ORC) Chapter 5312.
Planned Unit Development (PUD) or Cluster Homes
This is a form of community living in which all of the owners own their individual units and share a percentage of ownership of the common elements. Generally, the individual owners are responsible for the maintenance and replacement of large capital items such as roofs or siding and the association being responsible for the roads and lawn areas. The association is governed by an elected group of unpaid volunteers known as the Board of Directors. Subject to Ohio Revised Code (ORC) Chapter 5312.
What is an Assessment?
An assessment is the dollar amount paid by each owner to cover a proportional share of the common expenses for the property. These common elements will vary from association to association and depend upon the type of association, condominium, homeowners or planned unit development (PUD). The frequency of the payment will also vary from association to association and is dependent upon the associations governing documents. Typical frequencies are monthly or annually.
What are Capital Items?
Capital items are items such as the roofs, siding, roads or any other item defined by the governing documents as being the responsibility of the association to maintain or replace.
What are Reserves?
These are funds that are saved to replace all the capital items the association is responsible to maintain. This is so the association will not have to special assess the owners at a later date.
What is a Reserve Study?
This is a document that is generally prepared by a third party engineer. This report documents the current condition of the capital items, provides a projected remaining useful life and then presents an estimated cost to replace. Additionally, the engineer reviews current investments and financial documents to determine the association’s current reserve funding status.
What is a Fully Funded Reserve?
In accordance with ORC 5311.081(a) (1), each association must maintain funds in a reserve account to replace all capital items at the end of their useful life without the need for a special assessment to the owners. This is important for associations to achieve as it eliminates the need for a special assessment in the future.
What is a Special Assessment?
This is a process that associations have to use from time to time when there are inadequate funds in their reserve accounts to replace capital items. These types of assessments generally have very little advance notice and require collection of the funds from each owner in a rapid time period.
What are Governing Documents?
Governing documents are drafted by the declarant and include the declaration, the bylaws or CC&Rs which govern the standard operating procedures of the association. ORC requires these documents to be recorded and can be found at the county recorder’s website or office.
What is the Declaration?
The Declaration is a set of rules adopted by the declarant that govern the units and common elements. This document defines many items of the association, including the maintenance responsibilities of the owner and the association. It will define how the assessments are to be calculated and their frequency of payment. This is the document that tells the board what services the association is to provide to the community.
What are Bylaws?
Bylaws are a set of rules adopted by the declarant to govern any association meeting. Bylaws generally define the number of board members, board terms, quorum requirements for meetings and any other item necessary to run the association.
What are CC&Rs?
The term CC&R refers to ‘Covenants, Conditions, and Restrictions,’ the governing documents that dictate how the Homeowners Association operates and what rules the owners, tenants guests must obey.
Who is the Declarant?
This is the person or group of persons who either signs the original declaration governing the development and association, or acquires the original developer’s rights.
What is a Board of Directors?
These are individual unit owners elected at the annual meeting of the association by the unit owners. They are unpaid volunteers and serve terms as outlined in the association’s bylaws. The board of directors makes the decisions on contractors, budgets and the general running of the community association.
What is an Amendment?
An amendment is a legal tool to change, add or delete a section that is part of the association’s declaration, bylaws and CCR’s. This change can only be completed with a vote of the owners. The percentage required for the amendment to pass is based on each individual association’s governing documents.
What is a Rules Book?
This is a synopsis of the governing documents in a simplified format that defines the rules and regulations of the association. These are not recorded documents and are subject to change with the approval of the board.
What is a Common Element?
A common element is any property intended for shared use by members of the association. This could include lawn areas, community rooms or buildings, swimming pools, roads, etc.
What is a Limited Common Element?
A limited common element is any portion of the common element that is reserved for the exclusive use of a particular owner. This could include a patio, porch, driveway or parking spot.
What is a Quorum?
A quorum is a gathering of a minimal number of owners required to hold an official meeting of the association. The number required is outlined in the association’s governing documents. Failure to meet the quorum requirement will force the association to hold the meeting again and at another date, this could cost the association additional funds in reservation of locations and mailing of notices for a second time.
What is a Proxy?
A proxy is an individual appointed to act or vote on behalf of another owner by representing them at an association meeting. This document allows the association to achieve its quorum requirements at owner meetings as well.