CAI-NJ Aug.2018 (w)

RULES AND REGULATIONS

Five Written Policies Every Community Association Should Have

By Mary W. Barrett, Esq. Stark & Stark

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C ommunity association boards almost universally have authority to create policies relating to the administration and operation of the association. Too many boards rely solely on the provisions written in the master deed/declaration and by-laws and fail to adopt consistent policies that would be in the best interests of the association. It is true that if the association’s governing documents lack certain types of authority, an amendment may be required. However, even a community with well drafted governing documents should have certain written policies to supplement that authority. There are many important policies that a community association board might adopt but there are at least five written policies that every community association should have in place. 1. COLLECTIONS. Every community association has at least some authority to collect assessments from owners to pay for

common expenses. Some have better authority than others but even an association with good collection authority should have a written procedure for collec- tions. This written procedure can give a time table for sending out late notices, specify when late fees and/ or interest will be imposed and circumstances for which they will be waived. The policy should also set collec- tions charges such as administrative fees charged by management or penalties when a check is returned for insufficient funds and be clear as to when and how a matter will be referred to legal counsel. Most govern- ing documents give the board of the association broad authority to impose a “reasonable late fee” or “interest not exceeding the legal maximum rate” and leave it to the association to decide the amount. Boards should formally decide those amounts and the collection reso- lution is an excellent place to do this. If an association suspends a delinquent member’s right to vote or ability

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