Thomas Jefferson said, “We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their barbarous ancestors.” His comments are as applicable to associations as they were to the young Americas. As a community association ages, its needs change. Because of that, associations need to review their governing documents to make sure that the covenants and the rules are reviewed and revised to continue to meet the needs of the community. To do otherwise, is to ask a man to wear a boy’s coat.
If, after that review is made, the answer is that an association’s rules no longer meet the needs of the community, how do you create rules that fit the community’s needs and are enforceable?
Step one: Determine what rules you need. Rules are meant to clarify the covenants, they do not replace the covenants and they cannot contradict the covenants and other governing documents. So, if your covenants are completely silent on an issue or require or prohibit something that no longer meets the community’s needs, then you need to amend your covenants. If, however, your covenants specifically leave certain areas to the discretion of the current board, that discretion can be and should be fleshed out in rules that fit the needs of the community.
Step two: What can or should the rule state. Courts require that rules further the goals and purposes of a community. What are the primary purposes of a community? Two of the most common purposes are to preserve the property values and preserve the look and feel of the community as it was designed. Covenants may state more than just that. Look to your covenants, your bylaws and your articles of incorporation to determine the purpose for which your community was created. This will get you on the right track to begin furthering the goals or purposes of the community.
Step three: The courts also require rules be reasonable. This requires a common sense approach to the process and requires that an association evaluate what it is trying to restrict and how this is being done. Don’t be unduly harsh and don’t be too aggressive.
To pull this together, a couple of examples may help. Most declarations provide authority for the board of directors to set up parking regulations. So, we meet step one (Determine what rules you need). Because parking affects curb appeal and the look of the community, it can affect property values, so we have met part of step two (what can or should the rule state). If the board sets out a $1,000 fine for each parking violation, we have probably violated step three (not reasonable).
Many declarations allow owners to have a reasonable number of domestic animals. Because this is an area of the declaration that is ambiguous and subjective, it is appropriate for the board of directors to define a “reasonable number” and define what constitutes “domestic animals”. Therefore, we have met the requirements of step one. If this community were a townhome community, keeping the number of animals limited and restricting the types would assist the look of the community. Because the association is more than likely charged with the maintenance of the community, this type of requirement may very well assist with property preservation as well. So, we pass step one.
Setting the number of animals to a low number will reduce wear and tear on the common areas and thus reduce maintenance, so we will meet the requirements of step two. Prohibiting livestock would almost be the something that would not need to be stated, but it would clearly be appropriate. Most townhomes have no fences and certainly none will want to deal with the maintenance and clean-up of livestock. Setting a penalty for violation of this section such that it is a $20.00 fine for the first violation, $40.00 the second, and $80.00 the third and you meet the requirements of step three in that you have set up a reasonable penalty for the violation. Setting up requirements that any damage caused by an animal is the obligation of the animal’s owner to repair would also be an appropriate rule meeting all the requirements of enforceable rules.
While the thought of revising your governing documents may seem overwhelming, it can be done and should be done to make your community one that is enjoyable for all to live in. Once you understand what the courts are looking for, it is a much simpler task to tackle. Reviewing your rules and making sure you have enforceable rules that fit the needs of your community is critical to having a community that maintains its property values and maintains the look and feel it was designed with.
The last step of any review is to make sure you have not unwittingly created a rule that is simply not allowed by federal or state statutes. There are many well intentioned rules that can rule afoul of the Federal Fair Housing laws or the FCC laws. It does no good to spend the time to create rules, only to have them rendered unenforceable. Take the last step in the process and have your revised rules reviewed by counsel to save some heartache in court. Plus, attorneys will often have seen things in other communities and have great suggestions on how to address reoccurring problem areas.
After all this, you need to submit your rules to your community following your adoption of rules policy, but that topic is for yet another day.
For additional information on covenant enforcement, click here.