Association’s Governing Documents – Declarations / Rules and Regulations – “Choosing the path of least resistance”

With respect to both Condominium Associations and Homeowners Associations the governing documents define the rights and obligations of the membership, the Association itself, and often times impact third party’s rights such as institutional lenders.  More often than not the governing documents start with a multi-page voluminous document entitled “Declaration”.  For Condominiums the typical name is “Declaration of Condominium”. For homeowners associations it may vary with interchanging words involving Declaration of Covenants and Restrictions. These “Declarations” effectively serve as the constitution for a community association.  Florida case law has established that restrictions and obligations embedded in a Declaration are clothed with a very strong presumption of validity and will not be invalidated absent a showing that a certain provision is i) wholly arbitrary in their application, ii) in violation of public policy, or iii) abrogates some fundamental constitutional right.  Amendments to a Declaration are certainly permissible and common. However, the passage of a formal Amendment to a Declaration often times requires the approval a significant percentage of the owners, usually two-thirds of the membership.  In communities where membership participation is lacking, acquiring the necessary approval votes could be difficult if not impossible.  A widely used alternative is the adoption of Rules and Regulations. Unlike an amendment to the Declaration, Rules and Regulations need not be adopted by the membership, but rather only the Board of Directors, a significantly easier administrative task.  Therefore, why wouldn’t an association always choose the simpler path of adopting Board of Director’s promulgated rules and regulations, as opposed to endeavoring to amend the association’s Declaration?  First, the provisions and terms of Rules and Regulations are forbidden from conflicting with similar language appearing in the association’s Declaration. For instance, if a Declaration permits the rental of a unit without having to obtain approval from the Association, a proposed set of Rules and Regulations cannot mandate association approval for rentals, a direct conflict with the Declaration. Rules and Regulations can be used to supplement a Declaration’s terms and conditions by filling in additional details and creating specific procedures. Still, such newly created detail and procedures incorporated into Rules and Regulations must not “contravene either an express provision of the Declaration or a right reasonably inferred therefrom.” Furthermore, Rules and Regulations, in order to be enforceable, must be “reasonably related to the promotion of the health, happiness and peace of mind of the unit owners”, a fairly vague standard, but one that provides some guidance.  Whether the Board of Directors is contemplating changing or adding a right or restriction a close review of the Declaration for existing language is critical in order to determine if a formal amendment is necessary or whether using the simpler approach of Board of Director’s approved Rules and Regulations is a viable option.