Kudos if you caught the Expose song reference in the title. I’m actually not sure how it spilled out of my head. It is, however, appropriate for this writing. Over the years, I’ve seen that certain issues at associations claim popularity in a cyclical fashion. Recently, I had occasion to discuss “rules” several times.
Taking a brief step back, one may wonder why a board would invest time and effort making or enforcing rules. First, it is a part of the board’s fiduciary responsibilities in operating the condominium. Some set of rules is also necessary to secure the consistency of the architectural appearance as well as the rights and obligations associated with residency in the community. These are among the benefits that owners expect to receive when electing to join a condominium association.
My philosophy on making rules is that rules should be created to address situations that are reasonably expected to occur. In essence, provide the guidance that people will need in order to live at the association. Unnecessary rules tend to lead away from the association’s goal of community harmony and to invite precisely what boards wish to avoid, namely disputes over what constitutes acceptable conduct. Certain “general” rules are applicable at most, if not all, associations. For example, rules pertaining to taking care of units, being courteous to others, avoiding misuse or damage of common areas, etc. For more “particular” rules, review the association’s layout and amenities (e.g. separate, townhouse or “garden style” units, decks, pool, clubhouse) and style a set of rules as necessary to cover the situations that are expected to occur on the property.
When making rules, two primary areas of concern pertain to the authority for the rule and the substance of the rule. I created acronyms to cover the crucial points. In terms of authority, you want to “CAST” a rule. The explanation is as follows: “C” is condominium document authorization (do the documents provide authority to regulate this issue); “A” is administrative in nature (boards make administrative rules while those substantively impacting ownership rights are made via amendment to the condominium documents); “S” is statutory authorization (does applicable law allow for this type of rule); and “T” is trustee approval (ultimately the board must formally vote to adopt the rule).
In terms of substance, you want the rule to be in “FORCE”. This acronym plays out as follows: “F” is fair (rule applies equally to all segments of the community); “O” is observed (circulate and publish rules, distribute them and record them if possible); “R” is reasonable (a reasonable rule will invite compliance while unreasonable rules invite challenge); “C” is clear (clear rules invite compliance while vague rules invite confusion); and “E” is evenly-applied (enforcement of the rule is undertaken consistently).
For enforcement of rules, it is helpful to consider two main procedural components. I refer to these as the “in-house” process and the “legal” process. The in-house process begins at the association. Board members may either observe a violation or receive a complaint regarding one. The board should conduct some amount of investigation to ascertain the circumstances. If it is determined that a violation did, in fact, occur, then the board should issue a warning (or fine depending on the association’s policy). If an owner seeks an opportunity to be heard on a violation, it is recommended that the board provide such an opportunity. In doing so, the board may learn important additional information about the matter. It also avoids a later argument, if the dispute continues, that the board refused to allow the accused to communicate. After hearing from the owner, the board should place the final decision on the matter in writing. Yes, this does create a record. However, a record of a decision made on an appropriate basis may be used to counter any future allegations that the board’s decision was rendered on an improper basis.
If a unit owner refuses to remedy a violation or commits new/multiple violations, the association may reasonably begin the “legal” process. Once referred to legal counsel, the process is relatively straightforward. At the board’s discretion, a “warning” letter may issue. The next step, in terms of severity, is the issuance of a “cease and desist” letter. This letter cites the problematic conduct, evidence of it and the applicable restrictions that the misconduct violates. This letter also describes the consequences for failure to comply. If the cease and desist notice does not resolve the issue, the association may institute litigation. Relief sought in the litigation could be both injunctive (order regarding behavior) and financial (award of expenses and legal fees).
The appropriate time for changing rules at an association is a subjective decision. From time-to-time, like the state or federal law, the association rules will become outdated. Changes in societal norms may require updating of rules, while changes in the value of the dollar may require updates to the fine structure. Another opportune time for rule change is upon a change in circumstances at the association. Examples include the addition or removal of amenities or a transfer of responsibilities through events such as adoption of limited common area agreements.
Properly managed, rules can be a positive part of the association experience. Boards can responsibly satisfy their roles with respect to rules through consistent efforts and appropriate use of legal counsel.
By Gary M. Daddario