Common Legal Terms in Governing Documents

October 25, 2015 Tags: ,

Community association CC&Rs and Bylaws contain numerous legal terms.  Some of those terms have common meanings, others have very specific and legal meaning.  Here is a list of common legal terms, along with plain English definitions:

Abate – To stop or diminish.

Alienation – To transfer ownership or possession of land from one person to another.  Governing documents may have a provision against “any restraints on alienation.” This can mean that the Association may not impose rental restrictions or impose criteria for buyers of lots or units.

Declarant – The individual or entity who creates a condominium or planned community.

Casualty – A disastrous occurrence due to a sudden, unexpected, or unusual cause. A “casualty” event is what triggers many insurance policies.

Condemnation – The process of taking private property for public use by a governmental body.

Common Property – Property owned or leased by the association. Usually designated on the plat and described in the Declaration.

Contribution – The right of one person who has discharged a liability to recover from another who was also liable.

Common Elements – The portions of a condominium which are jointly owned.

Cumulative Voting – The ability to cast multiple votes for the same director. Typically prohibited.

Easement – The right of use upon the property of another.

Encroachment – When land is conveyed and it is then discovered that improvements on the property are partially located on an adjacent owner’s property.

Encumbrance – Any right or interest in land, like a mortgage or lien.

Enjoin – To require someone to do something.

Enjoyment – The exercise of the right to use your property. Owners have the right to “quiet enjoyment” of their property.

Enumeration – To list or describe.

E&O – Errors and Omissions insurance. Typically called D&O—Directors and Officers.

Estoppel – When someone is prevented, by their own actions, from claiming a right to the determent of another who was entitled to rely on such conduct.  For example, if the association is aware of a violation and does not act to enforce for a significant amount of time, the association may be “estopped” from enforcement.

Fidelity Bond – An insurance policy for the theft of association funds or money.

Fiduciary – Derived from Roman law, meaning a person of trust and confidence.  Board members are fiduciaries. This means all decisions must be made in the best interests of Association and members.

Foreclosure – The process used by a mortgagor or holder of a lien to deprive an owner of property from their interests in the property.

Improvement – An addition made to property, including sheds, walkways, and utilities.

Indemnification – To restore the victim of a loss, in whole or part, by payment, repair or replacement. If a director is sued for acting in their capacity as a director, the Association typically must “indemnify” the director.  This means the association pays legal fees and the judgment.

Invitee – A person is an invitee on the land of another if they are there by invitation or authorization.

Joint and Several – The liability of two or more people who make the same promise. If a husband and wife purchase a lot in an association, both are liable for the full amount of any delinquent assessments.

Legal Description – A unique description of property that allows the property to be found and identified.

Lien – A claim on property for the payment of debt.

Metes and Bounds – The boundary lines of a piece of property, including the starting and end point.

Mortgage – An interest in property created by a written document providing security in the land in exchange for the payment of debt.

Mortgagee – Person who takes or receives a mortgage.

Nuisance – Any activity on land which is unreasonable, unwarranted or unlawful and is an annoyance or inconvenience to others.

Offset – A deduction. State law prohibits owners from claiming any offset relating to payment of assessments.

Quorum – The percentage or number of members who must be present in person or by proxy in order to hold a valid meeting and conduct business.

Right of Entry – The association’s right to enter an owner’s lot or home to remedy a violation.

Severability – Capable of being divided.

Subrogation – To substitute one person in the place of another.

Successor Unincorporated Association – If an association fails to renew its corporate status, an unincorporated association automatically exists.

Turnover – The process of transferring control of the association from the developer to the owners.