Bylaws

Bylaws generally provide guidelines for routine organizational conduct, like elections held for officers and the board of directors, types and duties of the officers, meetings, and so forth. Bylaws must be formally adopted or amended in order to take effect among members. Bylaws are often confused with Articles of Corporation, which by contrast outline the basic form of the company.

The term "bylaw" can also refer to the rules that are passed by a local government authority, such as a city or town. Local governments owe their authority to make such rules to a law, such as a statute, and do not have any sort of legislative authority beyond what local laws have given them. These rules are no less enforceable than laws created via legislation.

A bylaw is also different from a corporate resolution. A bylaw, once it is passed, is applied to all present and future cases, while a resolution applies to a single corporate act.

Declaration And Bylaws Vs. Rules And Regulations: What's What

A Declaration can be thought of as the master of corporate documents: it establishes the association and maintenance requirements, defines common elements, and other details.

The bylaws, by contrast, create the corporation rules and how it will be run, and contain provisions relating to, among other things:

  • Who is eligible for the board membership.
  • What the board's duties are.
  • What the board's powers are.
  • How members are elected.

The Declaration takes authority if any document conflicts with it. In order to change the Declaration, you must make a formal amendment, which must be voted on by members. The percentage of votes that are required to pass such an amendment is itself specified in the Declaration. Amendments, once passed, must be distributed to members and recorded with the County Recorder.

Rules and regulations, by contrast, are not recorded, and are therefore significantly easier to alter. The board has the authority to adopt rules and regulations that are reasonable and in accordance with other governance documents, such as the bylaws and Declaration, although these rules must be distributed to the owners in order to be in effect.

Understanding the Differences Between CC & Rs, Bylaws, and Rules and Regulations

Covenants, Conditions & Restrictions (CC & Rs) are legally binding documents that cover the obligations and rights of a homeowners association (HOA) and its membership. The CCR & R is more difficult to amend, as it requires a vote by the membership, and is officially recorded and then filed with the state.

CC & Rs typically cover legal issues, including:

  • Maintenance obligations of the homeowners association as well as its individual members.
  • Insurance obligations.
  • Restrictions on property use.
  • Mechanisms for the enforcement of the organization's rules.
  • Procedures for resolving disputes.

In other words, the CC & Rs cover the "what" of a homeowners association. In contrast, the bylaws cover the "how": the ongoing governance of the HOA. The bylaws therefore cover matters like:

  • The number of members.
  • The frequency of meetings.
  • Quorum requirements for meetings.
  • The responsibilities and duties of the members of the board.

Bylaws are also difficult to amend because — like CC & Rs — amendments to the bylaws require a vote by members. Finally, rules and regulations typically cover anything that is not explicitly covered by the CC & R or by the bylaws.

Such rules may sometimes need updating to respond to the changing operating environment. For example, a homeowners association could have a rule that no children under the age of 12 are allowed in the community pool on weekdays, but this rule could be amended on a seasonal basis, or as more families move to the community.

Understanding the Difference Between Bylaws and Standing Rules

In contrast with bylaws, standing rules are resolutions or rules that function under the bylaws of an organization, and deal solely with administrative matters.

Standing rules establish specific rules for an organization's day-to-day conduct, such as:

  • Frequency of committee meetings.
  • The time and date of committee meetings.
  • How petty cash may be used.

The key differences between standing rules and bylaws therefore relate to both effect and scope: bylaws are more overarching and refer to procedures, while standing rules tend to be more administrative and speak to specifics.

Bylaws and standing rules are also hierarchical in nature: bylaws supersede standing rules. Additionally, bylaws are written when an organization is originally founded. Standing rules, in contrast, are usually drafted as needed by an organization's committees or other management subsets.

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