Certificate of Incorporation — The Woods at Hidden Creek

Section 1

Purpose & Scope

The Certificate of Incorporation is the legal document that created The Woods at Hidden Creek Homeowners Association as a Delaware nonprofit corporation. It works together with the Bylaws and Declaration to define the HOA's legal structure, powers, and limitations.

Limited Scope by Design

The Association exists only to maintain the common areas, open space, and stormwater management facilities in the neighborhood. It does not have broad powers over individual lots beyond what is described in the Declaration and Bylaws.

What the HOA Can and Cannot Do

Can do: Maintain common areas, open space, and stormwater facilities; levy assessments; enforce covenants; hire contractors.

Cannot do without 75% member approval: Mortgage or sell common areas; create liens on common areas; convey common areas for non-corporate purposes.

Note: Powers over individual lots are limited to what is specifically described in the Declaration and Bylaws — not open-ended.

Section 2

Membership

Automatic — No Application Needed

Membership is tied directly to lot ownership. The moment you own a lot in the community, you are automatically a Member. There is no application, fee, or approval process for membership itself.

Every person or entity that owns a lot subject to assessment is automatically a Member of the Association.
Membership is tied to lot ownership — you cannot separate membership from owning a lot, and you cannot transfer membership separately from the lot.
Each lot gets one vote, regardless of how many people co-own it.
The developer's LLC, as owner of unsold lots, is also a Member and gets one vote per unsold lot it owns.

Section 3

Board of Directors

Phase 1 — Developer Control

Initial Board: 1 Director

The first Board consisted of just one director appointed by the developer. This is typical while the community is being built and lots are still being sold.

Phase 2 — Homeowner Control

After First Annual Meeting: 3–5 Directors

After the first annual meeting of homeowners, the Board must consist of 3 to 5 directors, and all directors must be Members (lot owners). This is the permanent structure.

Important Limitation on Board Power

The Board cannot mortgage, sell, or convey common areas — or create liens on them — without approval from at least 75% of all Members. This is a strong protection that prevents the Board from disposing of neighborhood common areas without overwhelming homeowner consent.

What Requires 75% Member Approval

The following actions require approval from at least 75% of all Members — not just those present at a meeting:

Mortgaging common areas as collateral
Selling common areas to a third party
Creating liens or encumbrances on common areas
Conveying common areas except for proper corporate purposes

Section 4

Assessments & Liens

Unpaid Assessments Become a Lien

If you fall behind on HOA dues, the unpaid amount becomes a lien on your property. This lien can affect your ability to refinance or sell your home until the balance is resolved. Contact the Board early if you're facing difficulty.

The Board can levy annual assessments and special assessments on all lots to fund community maintenance.
Unpaid assessments become a lien on the lot — a legal claim that must be satisfied before the property can be freely transferred.
Assessment liens are subordinate to existing first mortgages — meaning a mortgage lender's claim on the property takes priority over the HOA's assessment lien.
The developer's lots are generally exempt from assessments during the developer control period while lots are still being sold.

Section 5

Director Protection

Why This Matters for Homeowners

Director liability protection exists to encourage homeowners to volunteer for the Board. Without it, few people would be willing to serve. However, protection has clear limits — directors who act in bad faith or for personal gain are not protected.

What Directors Are Protected From

Protected: Directors who make honest mistakes or exercise reasonable business judgment while acting in good faith on behalf of the Association are generally shielded from personal liability.

What Directors Are NOT Protected From

Protection does not apply when a director:

Breaches their duty of loyalty to the Association (e.g., acting in their own interest at the community's expense)

Acts in bad faith or with intentional misconduct

Knowingly violates the law

Receives improper personal benefits from a transaction involving the Association

Section 6

Amending the Certificate

75%of all Members must approve

All Membersnot just those present at a meeting

The Highest Possible Bar

Amending the Certificate requires approval from 75% of all Members — not just those who show up to a meeting. This is an intentionally high threshold to protect the fundamental structure of the Association from being changed without near-unanimous community support.

The Certificate of Incorporation can only be amended with the approval of at least 75% of all Members at a properly called annual or special meeting. Compare this to the Bylaws, which also require 75% — both core documents are equally protected.

Section 7

Key Takeaway

What This Document Means for You

The Certificate of Incorporation establishes the HOA as a nonprofit entity with limited powers, strong protections around common areas, and a clear path to full homeowner control of the Board after the first annual meeting. It is the constitutional foundation on which everything else rests.

Here are the three most important things to remember about the Certificate of Incorporation:

Limited purpose: The HOA exists only to maintain common areas and enforce governing documents — not to regulate everything about how you use your property.

Strong protections: Common areas cannot be sold, mortgaged, or encumbered without 75% approval of all homeowners — protecting shared spaces from being disposed of by the Board alone.

Homeowner control: After the first annual meeting, all Board members must be lot owners and must be elected by homeowners — ensuring the community governs itself.