Improper Rule Or Regulation Pitfall

Many associations have provisions in either their Declaration or Bylaws/Code of Regulations that allow the Board to adopt reasonable rules and regulations for the association. However, beware a hidden danger to this common provision. It is very important to carefully read the provision granting that power to the Board to ensure that the rules you are trying to adopt are permitted under the provision.

Ignoring the precise language of the documents could put you in a position similar to a Wisconsin association that discovered, after lengthy litigation, that board did not have the authority to adopt the rules they implemented for the Association.

The board adopted a set of rules for the association, including rules regarding lot use, restrictions on lots and provided for fines for infractions. The court found that the specific language of the documents only provided for rules with regard to regulating common elements, and not for regulating individual lots.

It is important to have the association attorney review any proposed rules along with the provisions in the documents providing the power to adopt those rules to verify that the Association is not inadvertently adopting improper rules.

Case referred to: Concerned Neighbors of Lotus Lake Estates v. Lotus Lake Estates Homeowners Association, No. 2007AP1510, Wisc. App. Ct., Oct. 15, 2008.

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