DO BOARDS HAVE UNLIMITED AUTHORITY TO MAKE RULES?

Inherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property.  Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization.  Hidden Harbour Estates, Inc. v. Norman, 309 So.2d (4th DCA, 1975)

There’s no question that each of you have learned one way or the other that the above court case is entirely correct.  By moving into a community association you do give up some freedom.  You are all governed by the provisions contained in your declaration, bylaws and articles.  In addition, every board of directors has the authority to pass rules.  For condominiums,  Florida Statute 718.113 states:

The entity or entities responsible for the operation of the common elements, common areas, and recreational facilities may adopt reasonable rules and regulations pertaining to the use of such common elements, common areas, and recreational facilities.

            For homeowner’s associations, Florida Statute 720.304 states:

The entity or entities responsible for the operation of the common areas and recreational facilities may adopt reasonable rules and regulations pertaining to the use of such common areas and recreational facilities.

            In addition, some bylaws contain provisions that give the Board additional authority to not only make rules regarding the common areas, but also unit use.

The question becomes, while it is clear that Boards have the authority to make rules and regulations, are there any restrictions or is the power basically unlimited?

An association is not at liberty to adopt arbitrary or capricious rules bearing no relationship to the health, happiness and enjoyment of life of the various unit owners. On the contrary, we believe the test is reasonableness. If a rule is reasonable the association can adopt it; if not, it cannot. It is not necessary that conduct be so offensive as to constitute a nuisance in order to justify regulation thereof. Of course, this means that each case must be considered upon the peculiar facts and circumstances thereto appertaining.  See: Hidden Harbor – above.

Sometimes however, boards understand how difficult it is to actually amend a declaration and attempt to impose a board-made “rule” rather than attempt the difficult task of an amendment.  So, when is an amendment required as opposed to a board rule?

The test identified by the courts in assessing whether a board rule is valid is whether the rule contravenes an express or implied condition found in the declaration, and whether the rule reflects reasoned decision making, i.e., whether the rule is reasonable and is designed to accomplish its stated purpose. Beachwood Villas Condominium v. Poor, 448 So. 2d 1143 (Fla. 4th DCA 1984); Hidden Harbour Estates, Inc. v. Basso, 393 So. 2d 637 (Fla. 4th DCA 1981); Hidden Harbour Estates, Inc. v. Norman, 309 So. 2d (Fla. 4th DCA 1975). An association cannot adopt a rule which in effect amends the declaration of condominium. Gordon v. Palm Aire Country Club Condominium Association, Inc., 497 So. 2d 1284 (Fla. 4th DCA 1986). Board rules are not entitled to any presumption of correctness. Beachwood Villas. In the arbitration case of Neville v. Sand Dollar III, Inc., Arb. Case No. 94-0452, Summary Final Order (April 12, 1995), the arbitrator concluded that a board rule which set a minimum rental period was invalid as in conflict with the declaration where the declaration set forth the right to rent which was unfettered by restrictions as to frequency and period of term. In Payne v. Hillsborough Windsor Apartments, Inc., Arb. Case No. 92-0231, Final Order (June 4, 1993), the arbitrator invalidated a board rule restricting rentals to 10% of the total units in the complex, as the rule was more restrictive than the rental restrictions contained in the bylaws. In Petersilke v. Windwood Condominium Association, Inc., Arb. Case No. 94-0245, Summary Final Order (October 21, 1994), the arbitrator ruled that a board rule which set a minimum lease term of 1 year was invalid as in conflict with the declaration which permitted leasing for periods of not less than three months. In Reis v. Siesta Dunes Condominium Association, Inc., Arb. Case No. 92-0148, Final Order (July 2, 1993), the arbitrator held that a board rule which established a minimum lease term of 2 weeks was invalid where the declaration simply required prior board approval of the lease; if the tenant was not approved, the association was required to provide an alternative tenant for the same terms and conditions. Under the declaration, the owner and not the association had the right to set the lease term, and the rule was found to violate a right reasonably inferable from the declaration—the right to set the lease term.

If you’re on the Board and are unsure if your rule goes too far, ask your counsel for an opinion or you may wind up defending that rule in arbitration or a court of law.

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