The Board of a community association we represent is thinking of reviewing and updating the rules governing the community.
The question has arisen as to whether changes in the rules can be made by a vote of the Board or whether it would require an amendment to the By-Laws or Declaration.
Following in classic legal tradition, the answer to the question is… “It depends.”
Almost every homeowners association and condominium is governed by a Declaration and By-Laws which have been filed with the County Clerk’s Office.
A co-operative corporation is governed by a Proprietary Lease and By-Laws, neither of which is filed with the County Clerk. All three types of communities also typically have a set of House Rules.
The House Rules typically deal with more day-to-day issues such as parking, pets and use of the amenities. The Declaration and By-Laws are concerned more with governance issues such as voting, finances and maintenance responsibilities. However, there is often some overlap between the documents.
Courts have recognized the authority of Boards to adopt and amend rules and regulations governing the community.
Amending the House Rules usually requires approval by a majority of the Board. The procedure for amending the Declaration and By-Laws is set forth in each of those documents and typically requires approval of the homeowners by a super majority of two-thirds (or more).
In general, if a matter is dealt with in the By-Laws or Declaration, changing such a rule would require an amendment to that document. For instance, governing documents of condominiums and homeowners associations often state that homes may be leased without restriction as long as the monthly assessments due to the Association have been paid in full. In such a scenario, placing reasonable restrictions upon leasing, such as the payment of a security deposit and/or requiring a minimum lease term, would necessitate an amendment to the governing documents.
If an issue is not mentioned in the By-Laws or Declaration but is mentioned in the existing house rules of the community, new rules pertaining to that issue may often be adopted by a majority vote of the Board.
As stated above, there is not always such a clear line between which rules require homeowner approval and which may be adopted by the Board. The decision needs to be made on a case-by-case basis and is best accomplished with the aid of an experienced community association attorney.
