bylaws -comm ass'n

What are bylaws under the Community Association Act? 

The act does not define bylaws, nor does it require an association to have bylaws.  It is therefore strange that the act specifies requirements for bylaws (in the event an association has them, presumably), including that an association's bylaws must be recorded no later than the date of the first lot sale, as well as specifics that must be included in bylaws.  The Act also dictates where in the heirarchy of governing documents bylaws sit if there is a conflict between two governing documents.  

The Act does not require an association to be formed as a nonprofit corporation.  Yet, Section 57-8a-221 apparantly views an association's bylaws narrowly as a creature merely of the incorporated form of the association and that exist only by virtue of the association's status as a nonprofit corporation, rather than as bylaws of an association that was created by a declaration to manage the property or affairs of a common-interest community, including administering the servitude regime of the project.

Specifically, the section states that if an association is a nonprofit corporation and is administratively dissolved (for failure to renew, for example), the association may reincorporate and the board "shall readopt bylaws for the association that are the same as the bylaws that were in existence at the time of termination or dissolution."  This section presumes that the association's bylaws are somehow invalidated or nullified by dissolution of the corporate form of the association.  That simply is not true and misunderstands the purpose and nature of a common-interest community's bylaws, as well as the nature of the association itself.  The bylaws are not required by either the Community Association Act or the Nonprofit Corporation Act.  They are a contract between and among the owners and the association.  The association continues to exist regardless of whether it is incorporated or not, and so does this contract.

Indeed, if recorded before lots or units are sold, an association's bylaws often contain servitudes binding on the property in the community.  Such bylaws are not extinguished merely by the dissolution of the corporate form of the association. 

What goes in the bylaws versus the CC&Rs?

Consistent with traditional practice in HOAs, and consistent with the typical meaning and use of bylaws in a corporate sense, the best practice is for bylaws to provide for the administration of the association (which is usually a nonprofit corporation), namely the procedures, rights and obligations associated with the corporate structure of the association while the declaration establishes the rights and obligations that are associated directly with the property itself.

Thus, the bylaws should contain the procedures and processes of voting, meetings, officer duties, and so forth.  The declaration should contain the rights of individuals to use the property, should govern how the property may be used, and should contain the obligations to maintain and repair the property and to pay for administration of the property.  This practice provides a clearer distinction between the purposes and content of the declaration versus the bylaws, a distinction which is all the more important when an association's bylaws have a different, often lower, percentage of votes required to amend them than the declaration.

As to who must execute the initial bylaws, for a condominium project, see Section 57-8-10(8) ("The declaration, bylaws, and condominium plat shall be duly executed and acknowledged by all of the owners and any lessees of the land which is made subject to this chapter.").  There is no parallel requirement in the Community Association Act, but that act does require "an association" to file its bylaws for recording before the first lot is sold.  (Utah Code Section 57-8a-216).  It seems to follow that if the association is responsible for recording the bylaws, that it is the association that executes the initial bylaws in a community association.  To the extent applicable, the Nonprofit Corporation Act allows the incorporator to adopt initial bylaws if no directors have been elected, or if the board is in place, the board may adopt the initial bylaws.  If the bylaws contain any servitudes affecting the property (which they shouldn't, see above), the declarant (or all of the owners) should sign the initial bylaws, as well as the incorporator or authorized board member.

Statutes and Cases:

(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)

57-8a-216. Association bylaws -- Recording required -- Bylaw requirement
57-8a-228. Organization of an association -- Governing document hierarchy -- Reorganization