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Can a Board of Directors Create a New Rule in a Community Association?



Can a Board Make A New Rule and Regulation for a Community Association?


Absolutely! Rules and Regulations are Administrative Resolutions that can be created by a Board of Directors. They do not change the Governing Documents to an Association, and do not need to be recorded in the County Court House. The right for a Board to create rules is often found in the Governing Documents of the Association – the Declaration or Bylaws. But…Rules have to follow certain guidelines.


What does that mean?


1. Rules have to be legal.


A rule has to follow all applicable laws: Federal, State, and Local. Rules in a Community Association cannot break the law.


A common example of a rule that used to exist in many Community Associations is the prohibition of Satellite Dishes. Satellite Dishes are permitted by Federal Law, but a Community Association may clarify and make rules such as they cannot be over 1 meter in size. But, a Community Association cannot prohibit the installation of Satellite Dishes.


2. Rules cannot contradict State Laws, or Governing Documents in the Community Association.


A rule cannot be created by the Board of Directors that contradicts an already existing State Law or a section of the Declaration or Bylaws of the Community Association.


For example, if the Declaration of the Community Association says that a Unit may have two dogs and two cats, a Rule cannot be passed by the Board of Directors saying that a unit may have 1 dog and 1 cat. This would contradict what already existed, which is not permissible.


In the hierarchy of the Governing Documents, the Documents fall in this order:

- Federal, State, and Local Laws

- Plat Plan

- Declaration

- Articles of Incorporation

- Bylaws (or Code of Regulations)

- Rules and Regulations, Resolutions, Administrative Resolutions, Policies


As Rules and Regulations are at the bottom of the hierarchy of the Governing Documents, it may not contradict a document above. If it did, the Document with the higher authority would override it, anyway.


However, a rule can be clarified in the Rules and Regulations, that may be vague in the Declaration.


For example, the Declaration may provide the Board with the right to set late fees, but not state what the late fee is, or when the late fee is applied.


The Board may decide that late fees are $25, and the late date will be the 10th of the month. The Board will create a Late Fee Policy, by adopting a Late Fee Resolution (which is a new rule).


In this example, the Board clarified the rule about late fees in the Declaration by making it more specific. This is permitted because it is clarifying what already existed and did not contradict what previously existed.


2. Rules cannot be selectively enforced.


A rule cannot discriminate against a group of Homeowners – it has to apply across the Board to all Homeowners. Even Board Members and Committee Members have to follow the Rules and are subject to receiving Rules violations and fines!! There are no special treatments in Community Association Rule enforcement.


3. A new rule has to be announced to Homeowners before it is enforced.


A rule cannot be made today and enforced tomorrow. Rules have to be announced to the Homeowners in advance of enforcement. Associations should review their Governing Documents on notice requirements to Homeowners and consult Legal Counsel of the Association as to how many days the Rule must exist prior to enforcement.


An example one may find is that a rule must be mailed to all Homeowners of record thirty (30) days prior to rule enforcement.


4. Rules have to make sense.


The common purpose of a Community Association is to create a sense of harmony amongst neighbors, creating a peaceful place for residents to live and play, while protecting and enhancing property values. Rules help achieve this goal, because if everyone agrees to and follows the rules, these goals can be met.


If a Rule is a created that doesn’t make sense, and the Residents do not agree with, the harmony within the Community is broken. This rule offsets the balance and purpose of Community Association living.


An example of this is if you are in a pet friendly community, and a Board passes a rule stating pets are no longer permitted. This rule would not make sense. Why would pets all of a sudden not be allowed in a pet friendly community?


It would, however, make sense, that pets may not be permitted in a high-rise condominium, where there is not ample room to exercise pets in the common areas. Or, if the high-rise did not have green space for pets to relieve themselves.


5. Rules have to be consistent and fair.


If a rule exists, it should be consistently enforced and fair to all. A Board of Directors should not ask Management to “ignore” a rule but look at other rules, and Management should not turn their head to “this rule” but “pick on” this rule instead.


If there are rules that the Board or Community does not want to have enforced, it is time for the Rules to be reviewed, altered, and changed.


Likewise, any new rule, should pass the test of reasonability.

- Is this rule reasonable?

- Does it make sense?

- Will it be enforceable?

- Will the rule be enforced by the Board and management consistently?

- Is the rule fair to all Homeowners?

- Does the rule accomplish a purpose towards the common goal of the Community --- creating a sense of Harmony amongst neighbors?

- Does this rule bring neighbors together, instead of splitting the Community apart?

If you can say yes to all of these, then this is a Rule that should be created in your community.


Summary:

Rules and Regulations exist in a Community Association to unite neighbors for a common goal: to create harmonious living, protecting and promoting property values, and provide a place for all residents to live and play. When all Homeowners and Residents abide by the Rules, then this harmony is able to be obtained. When Rules are broken, the harmony is broken. Rules need to be reviewed from time-to-time to ensure that they are current with the needs of the Community, and on occasion, new rules need to be added. Before a rule is added, it should be legal, enforceable, and fair to all. Rules should not be created that are not intended to bring neighbors together and meet the common goal of the community: creating harmony amongst neighbors.


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Bricck Property Management is a boutique property management firm located in King of Prussia, Pennsylvania. Bricck provides best-in-class property management services to Condominiums, Homeowner’s Associations (HOA’s), Co-Ops, Active Adult Communities, Lifestyle Communities, and Commercial Buildings. Contact Bricck today for your cost-effective, but high customer service level proposal today. Phone: 610-596-8500. Email: info@bricck.com. Website: www.bricck.com



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