Do you know both CCIOA and the Nonprofit Act contain “default” provisions that kick in when your governing documents are silent? Although there may be too many of these provisions to discuss in a single article, below are some of the more important ones:
Director Qualifications: If the governing documents are silent, a director needs only be an “individual”. Directors are not required to be owners, residents, or in good standing to be on the board. No other qualifications may be added by the board without an amendment to the bylaws.
Officer Qualifications: If the governing documents are silent, officers must be individuals over 18 years of age. No other qualifications may be added without an amendment to the bylaws.
Director Terms: If the governing documents are silent, director terms are one year. Terms may not be changed without an amendment to the bylaws.
Powers: If the governing documents are silent, boards have authority to take any of the below actions without owner approval (this is not an exhaustive list):
- Enter into contracts
- Provide compensation to directors
- Retain a management company
- Amend certain portions of the bylaws
- Regulate use of common elements
- Impose fees and charges for rental of common elements
- Impose late fees with respect to delinquent assessments
- Impose fines for violations (after notice and opportunity for hearing)
- Adopt rules and regulations, policies, and resolutions (as long as they don’t conflict with the declaration, articles of incorporation, or bylaws)
- Purchase real estate
Quorum: depending on when the community was created and the number of units, default quorum requirements are as follows:
- 10%–if created on or after July 1, 1992, and has more than 1,000 units/lots
- 20%–if created on or after July 1, 1992, and has 1,000 or less units
- 25%–if created before July 1, 1992, regardless of the number of units
Unit Boundaries (for post-July 1, 1992 communities only): If governing documents are silent as to unit boundaries, the following components are considered to be part of the unit:
- Hardwood floors
- All spaces and interior partitions
The following components are considered limited common elements:
- Exterior doors
- Fixtures outside the unit that serve only one unit
- Any portion of a utility lying partially within and partially outside unit boundaries that only serves one unit
Please do not hesitate to contact Elina B. Gilbert directly at [email protected] or call one of our Altitude Community Law attorneys at 303.432.9999 if you have any additional questions or would like additional information with respect to statutory default provisions.