From The Blog
Community Association Governance: Part 1
Kiawah Island is a planned community development, designed to appeal to a certain lifestyle and meet a variety of homeowner desires and needs. Island governance and leaders are four distinct entities: the Kiawah Island Community Association, the Town of Kiawah Island, the master developer and the resort operator. Through excerpts from KICA’s Overview of Covenants, Digest introduces a series to help you understand the association’s role, the covenants that we are all bound to, and your rights and responsibilities as an association member.
What Is An Association?
A community association is a private, not-for-profit organization in which property owners are automatically members, giving them certain rights and obligations. A community association manages and oversees responsibilities in private communities for common facilities and services, including the enactment of rules relating to them. Typically, the community association derives its authority from a declaration of restrictive covenants that applies to all the property in the community.
Why Does It Exist?
When developers first started establishing private communities, they decided that certain properties within the community should be shared by all members and that the private community should have the ability to provide services that supplement those that might be provided by local governments. Community associations were established to maintain these common properties and to administer the array of services that the association undertakes. These associations are separate from the developers who establish these private communities. While developers typically have the right to control the association in the beginning, community association documents normally provide that this control is transferred to the members as the developers eventually sell the properties in the community. This is called transition.
Although the KICA Covenants spell out a formula for transition that has not yet been met, KRA agreed to turn over control to the members at an earlier time, to be implemented in stages, starting with the 1994 Development Agreement. This transition is now over. In 2005 KRA signed and recorded a permanent waiver of its right under the Covenants to appoint a majority of the board. It did retain, however, its right to approve amendments to the Covenants. In 2006 the KICA membership amended the Covenants to provide that KRA has the right to appoint one director. The members now have the right to elect six of the seven directors. Elections occur each March.
What are Covenants?
Covenants are non-governmental legal restrictions that apply to land and, hence, also apply to the owners of this land. They are legally binding. On Kiawah Island, there are two main sets of covenants that apply to all properties, except for some grandfathered properties along Eugenia Avenue. These two sets of covenants are the Kiawah Island Community Association, Inc. (“KICA”) Covenants (or the association Covenants) and the General Covenants (or developer Covenants).
The Covenants are legal instruments that are recorded in the official land records office for Charleston County and were provided to you by your attorney at closing. Included with the KICA Covenants are amendments that have been approved by the association’s members over the years. The full official title of the key KICA Covenants is the Declaration of Covenants and Restrictions of the Kiawah Island Community Association, Inc. The full official title of the general Covenants is the Declaration of Rights, Restrictions, Affirmative Obligations and Conditions Applicable to All Property in Kiawah Island. Each set of Covenants is also sometimes referred to as the “Declaration.”
Differences Between KICA Covenants and General Covenants
The KICA Covenants set forth the powers, responsibilities and procedures of the community association. All owners of real property subject to the KICA Covenants (i.e., the owner(s) shown on the
deed) are members of the association. The KICA Covenants spell out the rights of the members and the rules for the governance of the association. KICA owns most of the roads and parks across the island (with the main exception of Night Heron Park). These are common properties of the association. KICA insures and maintains your $28 million worth of assets (such as the roads, lakes, Sandcastle Community Center) and provides gate access controls, common property landscaping, social, recreational and other services to its members. Please refer to KICA’s Member Guide at www.kica.us for a more comprehensive view of KICA’s operational functions.
The general Covenants deal almost exclusively with architectural controls and the restrictions established to protect Kiawah Island’s natural resources. The general Covenants grant to the developer the right to set many property-related restrictions. It has created the Architectural Review Board (“ARB”) to administer many of these rights and provide primary design overview. The general Covenants also grant enforcement power to the association. With the developer’s consent, KICA undertakes to enforce all Covenants and has created the Covenant Compliance Committee to identify and monitor violations of the KICA Covenants, general Covenants, and KICA rules and regulations.
What is the Development Agreement?
In 1994 the Town of Kiawah Island and the master developer, KRA, entered into an Development Agreement (DA) which controls the future development of the developer’s properties. This agreement was replaced by a new DA in 2005. Although KICA was not a signatory to either DA, some provisions of the two DAs dealt with KICA. In effect, the developer agreed to relinquish some of its rights as to KICA and to convey certain properties to KICA as part of the overall agreement to secure certain development rights from the town. The most important impact of the two DAs is that KRA relinquished its right to appoint a majority of the board of KICA. As a result, transition of control to the KICA board occurred much earlier than the time specified by the formula in the Covenants. Neither DA became part of the KICA Covenants.
Referenced documents, with the exception of the DA, are available on KICA’s website at www.kica.us. The DA may be found on the town’s website at www.kiawahisland.org.