Guidelines for Creating Enforceable Rules and Regulations
October 1, 2011
A community association’s Board of Directors is often compared to the governing body of a small town. Just like the government of a small town, part of the role of a Board of Directors of an association is to craft “legislation” that affects an owner’s use and enjoyment of his or her property and the common areas. In a small town, “legislation” that affects the use and enjoyment of property is seen in zoning regulations, criminal codes,
and health codes. In the community association context, this “legislation” most often takes the form of Rules and Regulations. Depending on an association’s governing documents, a Board’s authority to promulgate Rules and Regulations can range from rules regulating the use of the swimming pool (i.e. the hours of operation) to parking regulations to restrictions on noise. Given this wide swath of possible topics for rule-making, it is not surprising that the task of creating and implementing rules for a community can sometimes seem as complex and daunting as drafting municipal legislation. However, by keeping a few simple guidelines in mind, a Board can successfully create and implement enforceable rules and regulations that will help to foster harmony within a community.
1. What is a Rule or Regulation?
Every community association is created by filing a Declaration in the land records of the county in which the property is located. Declarations are seen as an association’s “constitution.” They contain broad statements of general policy which establish the structural law of the community and give the Board of Directors the power to implement those policies and address day-today problems in an association’s operations. Those policies that affect day-to-day issues are an association’s Rules and Regulations. A Rule or Regulation is a tool to implement or manage existing structural law stated in a Declaration. Rules and Regulations adopted by a Board cannot contravene either an express provision of the Declaration or a right that can be reasonably inferred from that provision. As a general principle, a Board cannot use a rule or regulation to expand any obligations of an owner beyond what is included in the Declaration. Stated simply, a rule or regulation cannot have the effect of amending a Declaration.
The following cases illustrate these principles:
• Declaration required all dogs and cats to be restrained by a leash. A rule restricting the length of a leash to no more than 20-feet was valid because it clarified the definition of “leash.”
• Declaration provided no animals could be maintained by an owner without Board approval. A rule prohibiting all owners
from keeping new dogs after a specified date was valid. It clarified the dogs that could be kept with Board approval.
• Declaration authorized a Board to approve or disapprove leases. A rule requiring a minimum duration of a lease was not valid. Imposing minimum duration requirements expanded an obligation beyond the authority to approve or disapprove a lease. It amended the Declaration.
• Declaration authorized a Board of Directors to assign parking spaces on a uniform, non-preferential basis. Board adopted a rule assigning 78 of 94 spaces to owners without garages. The rule was invalid because it exceeded the express authority given to the Board.
• Declaration required an owner to obtain the written approval of the Board before making any structural improvements to
a unit. The Board adopted a rule that required an owner to obtain a building permit before commencing any work. The rule was valid because it did not expand an obligation because an owner was already required by ordinance to obtain a building permit.
2. Define the Need for the Rule.
The impetus behind the creation of a rule should always be an unaddressed need for regulation in a community. Initially, a Board should review its governing documents and current rules and regulations to determine that the covenants or an existing restriction or rule does not already address the problem. If not, a Board should examine the nature and extent of the problem in the community to determine whether it is serious enough or widespread enough to justify a rule and its subsequent enforcement following the rule’s implementation. To extend the legislative analogy used above, this stage in the creation of a rule is like that of a legislative fact-finding committee, which must line up all the facts relevant to the proposed legislation prior to drafting the bill.
3. Find the Authority for the Rule.
Once a Board has determined the need for a rule, a Board must confirm if it has the legal authority to act to adopt rules and regulations. It is not an inherent right of a Board. There are numerous cases in which a Board adopted a rule and imposed sanctions when it was violated, only to have a court dismiss the association’s claims because the Board was not authorized to either adopt or enforce the rule. An association’s Declaration must specifically authorize a Board to impose rules and regulations. In fact, both the Georgia Condominium Act and the Georgia Property Owners’ Association Act state a Board does not have the authority to adopt rules or regulations unless that power is expressly stated in the Declaration. The provision of a Declaration that authorizes a Board to adopt rules and regulations is like an enabling statute in municipal legislation. The enabling statute establishes the scope of legislation that can be adopted. A rule or regulation implements the legislation.
4. Will the Rule Change the Declaration?
Determining whether a Board can promulgate a rule to address a specific issue can be the most challenging part in a rule’s creation. It requires close analysis of the type of conduct or area of concern that the Board seeks to regulate with the rule, and whether it contradicts a provision of the Declaration or creates a new obligation. As an example, the documents for some homeowner associations only grant to the Board the authority to promulgate reasonable rules and regulations with regard to the use and maintenance of the association common areas. Since the authority is limited to the common areas, a Board subject to that limitation does not have the authority to enact a rule regulating the use of an owner’s lot.
Determining whether a new rule conflicts with an express provision of the governing documents is usually fairly simple. For example, if an association’s governing documents had a provision requiring that all mailboxes be painted black, the Board could not then adopt a rule that all mailboxes be painted pink. That change of an express obligation would require the members to amend its documents. On the other hand, determining whether a proposed rule conflicts with an inferred right is more complicated. An example of this is where a homeowners association’s governing documents had only one provision relating to dogs, stating that “all dogs shall be kept secured in yards.” In the absence of any other relevant provisions of the Declaration granting the association authority over an owner’s use of a lot, an owner has an inferred right to keep as many dogs as he or she would like. If the Board were to enact a rule that owners could not keep more than two dogs, a court would likely find that rule violated an inferred right in the documents that the number of pets an owner could keep is not regulated. Because the analysis of whether an inferred right exists is often complicated, if a Board has any concern that a proposed rule might violate an inferred right, a Board should consult an attorney before enacting it.
5. Make Sure the Rule Passes the Reasonableness Test.
Rules and regulations are secondary in priority to the restrictions present in an association’s governing documents. Thus, unlike the provisions in an association’s governing documents, which are presumed valid by the courts, rules passed by a Board must be reasonable in order to survive a judge’s scrutiny. Courts have defined “reasonable” to mean a rule is not arbitrary, capricious, or discriminating, and is rationally related to a legitimate objective of an association.
There are two parts to the reasonableness analysis. First, what is a Board’s objective in creating the rule, and is that objective a proper one for the association? That step is accomplished when a Board defines the need for the rule. However, whether it is a legitimate objective depends upon whether the rule is designed to further one of the purposes of the association. So, for example, an association’s documents might authorize the Board to promulgate rules regarding use of the common area swimming pool. An otherwise valid pool rule would not be considered reasonable if it was promulgated for the sole purpose of discriminating against a certain class of pool users, i.e. children.
The second part of the reasonableness test, whether the rule is “rationally related” to a legitimate objective of an association, focuses on whether the rule addresses the objective without prohibiting otherwise valid conduct or behavior. To meet this part of the test, a Board should ensure that a rule is drafted so that it regulates only the particular conduct the Board determined needed to be regulated. As an example, an association with otherwise valid authority to regulate the types of vehicles within its community might determine that the presence of a large number of commercial trucks in the community is detracting from the community’s aesthetics and has the potential to bring down property values. If the Board were to write a rule banning “all trucks,” while the rule achieves the objective, it exceeds the objective since it would also prohibit non-commercial trucks. The rule would not be “rationally related” to the Board’s objective. To avoid unintended consequences, Boards must carefully tailor the language of rules to only address the particular conduct that the Board wants to regulate. In this example, the Board should have prohibited “commercial vehicles” and then specifically defined what it considered to be a “commercial vehicle,” including examples of the prohibited vehicles.
6. Adopt, Publish and Enforce the Rule.
Once a Board has determined there is a need for a rule, that it has the authority to promulgate the rule, that the rule is within the scope of its authority, and that the rule is reasonable, it must then adopt the rule. In most associations, the Board, by a majority vote, has the authority to adopt rules. Since members do not vote on the adoption of Rules and Regulations, courts will scrutinize any claim that a rule is a de facto amendment of a Declaration. Since rules and regulations are not recorded in the land records, like a Declaration, a Board must make sure that owners have notice of the rule by publishing it to the community members, either by mailing it, including it in a newsletter, or publishing it on a website.
The final step in the implementation of a rule or regulation is enforcement. A Board should not assume it has the authority to enforce a rule, especially the ability to impose fines. Under both the Georgia Condominium Act and the Georgia Property Owners’ Association Act, an association’s Declaration must expressly authorize a Board to impose fines and suspend an owner’s use of the common elements. So, if an association’s declaration only authorizes a Board to enforce the rules and regulations by a suit for damages or injunctive relief, or both, that Board does not have the authority to impose fines, suspend use of the common property, or take any other action.
Following the guidelines outlined above, a Board shall be able to develop rules and regulations that promote the enjoyment of a community by all its residents and which can be enforced.