The HOA's articles of incorporation establishes the shareholders of the HOA as the owners of all homes located within the covenant-controlled community created by the Declaration document. So, when you buy a house in a covenant-controlled neighborhood, you also automatically become a shareholder of the HOA corporation. Regardless of how many residents live within a house and regardless of how many people jointly own a house, each house is assigned one vote when voting on HOA matters. Per CRS 38-33.3-301, HOA membership is restricted to owners of lots in the common interest community. Thus, renters or non-owner residents in a household do not have the power to vote on HOA matters.

An HOA is a private entity managed by a board of directors elected by the members of the HOA. All facilities owned by an HOA are privately owned facilities for the benefit of the members of the HOA.

Articles of Incorporation

The articles of incorporation for all HOAs are public documents filed with the Colorado Secretary of State. The purpose of the articles of incorporation is to document the basic legal and ownership structure of the entity, the primary purposes and powers of the entity and procedures to dissolve the entity. Articles of incorporation rarely contain rules and procedures governing the operation of the HOA corporation and its board members.

Corporate Bylaws

Generally, the bylaws of an HOA corporation establishes the rules and procedures that govern the operation of the HOA corporation and its board members. Unlike articles of incorporation, corporate bylaws are not publicly accessible documents. The bylaws can only be modified by the vote of homeowners who are shareholders in the HOA. The HOA Board does not have the authority to modify or amend the HOA's bylaws. The bylaws typically do not address specific procedural and operational issues. Such issues are addressed by written policies adopted by the Board.

Within the Colorado Common Interest Ownership Act (found within article 33.3 of title 38 of the Colorado Statutes), section 306 requires all HOA corporations to include rules in its bylaws that at a minimum address the following issues:

1. The number of members of the executive board and the titles of the officers of the HOA;
2. Election by the executive board of a president, a treasurer, a secretary, and any other officers of the HOA the bylaws specify;
3. The qualifications, powers and duties, and terms of office of, and manner of electing and removing, executive board members and officers and the manner of filling vacancies;
4. Which, if any, of its powers the executive board or officers may delegate to other persons or to a managing agent;
5. Which of its officers may prepare, execute, certify, and record amendments to the declaration on behalf of the HOA; and
6. A method for amending the HOA's bylaws.

For HOAs where 30 or more units comprises the total shareholders of the HOA, CRS 38-33.3-306 requires the HOA bylaws to include the following provisions:

1. That the other persons or managing agent maintain fidelity insurance coverage or a bond in an amount not less than fifty thousand dollars or such higher amount as the executive board may require;
2. That the other persons or managing agent maintain all funds and accounts of the HOA separate from the funds and accounts of other HOAs managed by the other persons or managing agent and maintain all reserve accounts of each HOA so managed separate from operational accounts of the HOA;
3. That an annual accounting for HOA funds and a financial statement be prepared and presented to the HOA by the managing agent, a public accountant, or a certified public accountant.

Board Policies

Board policies are designed to address specific procedural and operational issues that are not otherwise specifically addressed by the HOA’s bylaws, articles of incorporation or the declaration document. To avoid confusion, board policies should be documented as written policies. Unlike articles of incorporation, written board policies are not publicly accessible documents. Board policies must be adopted by the majority of directors serving on the board. The Board may be required to provide advance notice to the homeowners regarding proposed Board policy changes, but homeowners do not get to vote on proposed board policy changes.. If homeowners disagree with the written policies of the HOA Board, the homeowners' primary recourse is to vote to remove and replace the directors serving on the Board.

Within the Colorado Common Interest Ownership Act (found within article 33.3 of title 38 of the Colorado Statutes), section 209.5 requires all HOA corporations to adopt the following nine "responsible governance policies":

1. Collection of unpaid assessments;

2. Handling of conflicts of interest involving board members;

3. Conduct of meetings, which may refer to applicable provisions of the nonprofit code or other recognized rules and principles;

4. Enforcement of covenants and rules, including notice and hearing procedures and the schedule of fines;

5. Inspection and copying of HOA records by unit owners;

6. Investment of reserve funds;

7. Procedures for the adoption and amendment of policies, procedures, and rules;

8. Procedures for addressing disputes arising between the association and unit owners; and

9. When the HOA has a reserve study prepared for the portions of the community maintained, repaired, replaced, and improved by the HOA; whether there is a funding plan for any work recommended by the reserve study and, if so, the projected sources of funding for the work; and whether the reserve study is based on a physical analysis and financial analysis.

If the HOA fails to adopt the above policies, Colorado statutes may limit the powers of the HOA to (1) enforce homeowner compliance with the CC&Rs and (2) collect unpaid assessments from homeowners.