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What is the difference between bylaws and CC&Rs? In real estate, we often hear the term bylaw and CC&Rs, but not everybody in real estate understands exactly what they are. When you ask a real estate professional to define them, you'll sometimes get ridiculous answers. You'll hear everything from CC&R stands for California Code Restrictions to CC&R stands for Colorado Community Rules. People will sometimes just make things up to sound smart, but you will not need to do that as now you will know what it actually means. If you buy a Utah home such as single family home, condo, or town home in a planned community, you'll most likely have a Homeowners Association also known as the HOA. The HOA will have its own governing documents in the form of bylaws and CC&Rs. CC&R stands for covenants, conditions, and restrictions.

CC&Rs

The Declaration of CC&Rs is a legal document that lays out the guidelines for the planned community. The CC&Rs are recorded in the county records in the county where the property is located and they are legally binding. Basically, the CC&Rs are the rules of your neighborhood. They govern what you can, cannot, or must do with respect to your home. The goal of the CC&R is to protect, preserve, and enhance the property values in the community. Most of the time, the rules make sense and are easy to accept. For example, it is pretty easy to agree with a covenant that requires you to mow your lawn and keep it weed free. Nobody wants to look at that mess. However, other rules might interfere with your plans or seem downright unreasonable to you. For example, perhaps you want to park your car in the street and store your extra belongings in the garage. However, an HOA may require you to park your car in that garage.

Or perhaps you are counting on the fact that you'll be able to fence in the yard to contain your dog, but after reading the CC&Rs, you find out the community doesn't allow fences. Not to mention the fact that some HOA communities don't allow certain sizes or particular breeds of dogs. Unfair, I know. That can mean that, if you have your lovely 120 pound rottweiler, you might need to look at buying a home in a different neighborhood since changing the rules is usually very difficult. Likewise, if you're planning a big project later on down the line, say, for example, painting your door a new color, you'll need to check with the CC&Rs to make sure that the paint color you have chosen isn't prohibited. It is also typical over the CCRs to regulate things like basketball hoops, close lines, fences, TV antenna, satellite dishes, garbage cans, external architecture, and much more.

Because this record is kept on file with the state, it can be difficult to amend and requires a vote by the HOA membership to make any changes. If you don't abide by the CC&Rs, the HOA may impose penalties for any violations. When you close escrow on a home in a community that has bylaws and CC&Rs, you'll sign a series of papers, one of which states that you have read the CC&Rs and agree to abide by them. If you violate the CC&Rs, the penalties can include fines, forced compliance, or the HOA can even file a lawsuit. For example, suppose you try and sneak your massive dog into the community despite the rules limiting the maximum weight for pets to be 30 pounds. In addition to fines, you could be forced to give up good old Fido or find a new place to live. If CC&Rs cover the what of the HOA, the bylaws cover the how. 

HOA’s

The HOA, which is typically set up as a nonprofit corporation, is an organization established to manage a private planned community. Like other corporations, the HOA is governed by a set of rules and a board of directors who are elected by the members. These rules are called the bylaws. The bylaws govern how the HOA operates and contains the information needed to run the HOA as a business. Your community's bylaws establish a structure of day to day governance of your Homeowners Association. For example, the bylaws cover matters such as frequency of HOA board elections, the process for nominating and electing new board members, membership voting rights, number of members that serve at one time, length of board member service terms, media frequency, how the meeting's conducted, the duties of the various offices and the boards of directors, and much more.

Conclusion

Like CC&Rs, bylaws are difficult to change as they too require a vote by the membership to amend. Therefore, if you are thinking of purchasing a home in an HOA community or already live in one should take the time to familiarize yourself with both the CC&Rs and the bylaws so that you are aware of any neighborhood restrictions and you fully understand how the community you live in operates.

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