Associations often under-utilize Rules and Regulations. Rules and Regulations are specific guidelines and policies relating to the day to day operation of an Association. Unlike other Association governing documents, Rules are generally easy to adopt and modify because they are typically adopted and amended by the board of directors without member input or approval. Home owner involvement is not typically required to modify or amend the Rules and Regulations.
Under-utilizing Rules and Regulations can lead to legal problems for Associations. Association Declarations often purposely avoid topics regarding the day-to-day operations of the Association and specifically contemplate that such topics will be regulated by later adopted Rules and Regulations. Many Associations governed by these types of Declarations simply never get around to adopting Rules that "fill in the gaps", leaving many areas of operations unregulated, or vaguely controlled by "common practice." This leaves ambiguities in the governing documents and can lead to disputes between the Association and its members.
Another problem is where Associations have Rules and Regulations, but that some or all of the existing Rules are not enforced. Most Association Declarations contain a non-waiver clause, providing that non-enforcement of the Association's governing documents is not a waiver of the right to enforce the governing documents at any time. In 2005 the Minnesota Court of Appeals decision in Pollard v. Southdale Gardens of Edina placed association's reliance on these non-waiver clauses into question. In the Pollard case, an association had not enforced a rule for a period of time, but then enforced it pursuant to the Association's non-waiver clause. An aggrieved owner sued the Association. The lower court decided in favor of the association, but the appellate court reversed, ruling that the period of non-enforcement may have modified the Rules and the non-waiver clause -- by itself --was insufficient to deny the aggrieved owner his claims. In light of Pollard, any Association that wishes to enforce a Rule after a period of non-enforcement should re-adopt a new express Rule before enforcement.
In other instances, Associations have Rules and Regulations in the place, but circumstances have changed, making many provisions of the Rules no longer applicable. Despite long-changed circumstances, outdated provisions of these Rules languish as part of the governing documents even though a simple vote of the Board could amend and update them.
Rules and Regulations can be combined into a comprehensive document that covers numerous topics, or can be adopted to address only a particular issue. The scope of issues that an Association can address by Rules is expansive. The following is a list of the more common topics covered by Rules.
Parking. Simply stated, community associations adopt parking restrictions to limit, restrict or prohibit the parking of vehicles within the association. Associations may limit the number, the time of day, the duration of time that a vehicle can be parked in certain areas, and provide remedies for violations. A common example of a restriction is to prohibit large recreational and commercial vehicles from any street, parking lot or driveway within the association. Any association contemplating such restrictions must confirm it has authority under its existing governing documents to regulate these types of activities.
Leasing. Leasing rights cannot be prohibited or unduly restricted through a community association's Rules and regulations; however, if an association currently permits leasing, the association can adopt Rules and regulations addressing how units may be leased and imposing fines for violations of those rules. The following are just a few common examples of ways in which associations regulate leasing of units, and is not intended to be exhaustive:
§ Require that a leasing owner have a written lease agreement with the tenant and provide a copy to the association prior to rental, subject to the association's approval;
§ Require that a leasing owner include in any written lease agreement that the agreement is subject to the association's governing documents, and that a violation of any of the governing documents constitutes a violation of the lease;
§ Require a leasing owner to perform a background check on a prospective tenant and provide certification to the Association that such a check has been completed;
§ Require that a leasing owner register his unit with the association as a rental property, and provide to the association contact information for the owner and all occupants;
§ Establishment of fines and other enforcement for violations of leasing rules.
As indicated above, Rules can only regulate currently permitted leasing. Any association that wishes to prohibit or restrict leasing of units within the association must amend its governing documents and should consult with legal counsel regarding the process involved in doing so.
Pets. Community associations often wish to regulate the keeping of pets by unit owners. For example, an association may want to restrict the type, size, or number of pets that may be kept, the manner in which pets may be kept, or may want to completely prohibit all pets. Again, any association contemplating such restrictions must confirm that it has authority under its existing governing documents or under state statute to adopt any pet restrictions it is considering.
Satellite Dishes. Owner use of Satellite Dishes is another area that many community associations consider regulating. If an association has the authority to regulate satellite dishes under its existing governing documents, then the association may adopt rules regulating satellite dish usage, but the association may not prohibit dish usage. Federal law guarantees an owner the right to receive satellite transmissions for television, internet and related purposes. Therefore, Associations may not enforce satellite dish Rules and regulations that prevent or unreasonably delay installation, maintenance, or use; unreasonably increase the cost of installation, maintenance, or use; or preclude reception of an acceptable signal.
Typical satellite dish rules that do not conflict with federal law are ones that regulate the color or placement of a satellite dish, as long as the rules do not require that the dish be placed in an area adversely affecting the quality of the signal.
Smoking. Effective October 1, 2007, the Minnesota Legislature has passed the Freedom to Breathe Act, which has greatly expanded Minnesota's restrictions on smoking in public places and in places of employment.
Association indoor common areas were considered "public places" under earlier versions of the Act, and were therefore subject to smoking restriction; however, associations previously could designate smoking as "permitted" within those areas if they wished. Under the new Act, all smoking in public places is prohibited and cannot be designated "permitted."
Further, the definition of "indoor" public spaces covered by the Act has been expanded, meaning certain association common areas may now be subject to smoking prohibitions that previously were not covered by the Act. Under the new Act, an indoor common area is defined as having a floor and ceiling and at least one half of the sides are covered by some type of temporary or permanent wall or barrier. If an association has a common area fitting this definition, then smoking is prohibited in that area under the Act.
Also under the Act, the association is charged with enforcing the smoking restriction. The Act charges the Association with enforcing the prohibition, at a minimum, by posting signs or by any other means which may be appropriate.
Any association affected by the Freedom to Breathe Act should consider a formal non-smoking policy to assist in its enforcement of the Act.
While the members may not have approval or voting rights regarding the adoption and amendment of Rules and Regulations, a Board should always act in the Association's best interests and is advised to adopt Rules that would be accepted by a majority of the owners. The owners control the Board of Directors and may remove some or all of the board members who adopt or amend Rules and Regulations that do not meet the approval of the member majority.
As indicated above, this article is not exhaustive, but is meant to highlight some of the most common examples of circumstances in which associations wish to adopt Rules and Regulations. When considering Rules and Regulations, an association should seek the assistance of its legal counsel. Being part of the governing documents of the Association, Minnesota Law considers Rules and Regulations to be a contract between the association and its individual members. Therefore, all the laws of contract construction apply to such a document. Sometimes an association wishes to achieve a desired result or is faced with a particular problem and counsel can identify adoption of rules as one option of approaching the issue.
For more information, contact Joel Hilgendorf at (952) 746-2167.