Did you hear the one about the Florida family that was about to be kicked out of their HOA because the wife had just had twins? The family already had one child, and the arrival of the twins would put them over the two-kids-per-unit allowed by their North Palm Beach condo. The condo was not an ‘active adult’ 55-and-over community, but nevertheless it had a rule on the books limiting occupancy to two children. A bit Machiavellian to be sure, but true. 

Or how about the Fort Myers condo that fined a man suffering from ALS $100 a day because he was using a shopping cart instead of a walker to get around his unit, the parking area and the grounds? Apparently the community had a rule forbidding the use of any ‘storage item’ in a common area like a walkway. Another Sunshine State condo passed a rule preventing two unmarried people from living together, aimed at stopping gay couples from living in the development. After an uproar about the ban, the rule was reversed in 2015. Still another allowed pets, but forbade them from walking through the lobby; their owners had to carry them, regardless of the animal’s size. 

Every condo, HOA, and co-op has rules and regulations by which residents and their guests must abide. For the most part, these are usually pretty straightforward, but sometimes a board will draft a rule that is biased, unenforceable or that oversteps their powers. Others may try to level penalties against rule-breakers that are either unrealistic or legally unsound. Some are just plain stupid. These ‘bad’ rules and enforcement policies do more harm than good; they foment resentment toward the board, animosity among neighbors, and can even invite litigation and subsequent legal costs. Let’s take a look at good rules—and bad. 

The Nuts and Bolts of Rules

Not all rules are the same. In condos and co-ops, there are generally two different documents that govern what is and is not permissible: the governing documents, or bylaws, and the rules and regulations.

The bylaws are the equivalent of the Constitution for a co-op or condo—the papers signed by the founders of the building. That document “talks a lot about governance,” explains Brendan Keany, General Manager of Penn South, a large co-op community in New York City. “It talks a lot about the election of the board, the terms or the board, the ability of the board to have committees, and delegate duties and responsibilities. It deals with a lot of what I call ‘the fundamentals.’ The very serious stuff.”

By contrast, the rules and regulations are more like a series of amendments to the bylaws. “They’re more of a working document,” Keany says “It’s a little bit like how we all live, and if we abide by the rules. Most of them are listed, either specifically or in general terms, within the certificate of occupancy (often called the C of O) or proprietary lease.” These include things like noise prohibitions, and whether or not owners in a building may keep pets. 

Needless to say, the two kinds of rules are not the same—legally or otherwise. “The main difference between house rules and the rules in the governing documents is one of enforceability,” says attorney Howard Dakoff of the Chicago firm Levenfeld Perlstein LLC. “Governing documents are presumed valid by the courts unless there’s a violation of constitutional rights—so there’s a presumption of validity. Rules and regulations, on the other hand, are subject to what we call judicial scrutiny, at least here in Illinois. This means the judge can review whether he or she thinks the rule is reasonable or unreasonable. So if it’s in the governing documents’ declaration of bylaws, the judge doesn’t have the ability to say, ‘I don’t think that’s reasonable.’ Unless it violates a constitutional right, it’s enforceable. Whereas with a rule, the judge has latitude to say, ‘I don’t like that rule. I think it’s overreaching, and therefore I can strike it down.’”

The Rules of Making Good Rules

The rules that tend to change are ones that govern quotidian behavior. There tends not to be much fuss made about things like how long board terms are, or who is empowered to form committees. What residents care about are matters that affect how they live their day-to-day lives: Does the fidgety upstairs neighbor with her collection of stiletto heels have the requisite amount of carpet on the floor? Do I need to hide evidence of my cat when the super drops by? At what point can the death-metal enthusiast next door be made to use headphones?

“Good rules are comprehensive but do not overregulate resident behavior, are precisely written, but not overly punitive in tone, and are consistent with but not a restatement of the other governing documents,” says Scott A. Rosenlund, a shareholder with law firm Fullett Rosenlund Anderson PC, which has offices in Chicago and Lake Zurich, Illinois. “Of course, rules should be drafted to fit a specific property, conform with applicable laws, be adopted in accordance with required rulemaking procedures, and be reasonable in both substance and application.”

Rules that exist before a shareholder or owner buys into the building, as a general rule, are the best kind of rules. After all, how loudly can someone complain when they knew what they were buying into? “So as a general rule, it’s always preferred to have restrictions in the governing document that are either recorded against the property before anyone buys in, or amended by the unit owners,” Dakoff says, “which requires owner consent, because there’s a higher presumption of validity.”

As with any rule, there’s the letter of the law and the spirit of the law to consider. Buildings tend to run more smoothly when the latter carries more weight than the former. No one wants Javert enforcing the house rules.

To stay on the right side of the equation, “The single best thing board members can do is to speak with their association attorney first before spending time drafting or adopting rules,” advises Donna DiMaggio Berger, a shareholder with law firm Becker & Poliakoff in Fort Lauderdale. “It is important to understand that certain restrictions simply cannot be passed by board rule alone. Other times, there is a provision in the governing documents which requires membership approval for some or all board rules.”

 “A lot depends on who you have on the board,” adds Keany. “You have sometimes very thoughtful, capable people who think things through, and then you have some people who want to get mired in the weeds and be reactionary. They may not be the happiest people, and they allow this to bleed into their reactions to things. I try to guide our board to make rules that are reasonable.”

Points of Contention

In matters of day-to-day life, different people hold different views on any number of areas, and these views color the culture of a building. An example: dogs.

“Many, many years ago,” says Keany, “Penn South didn’t permit dogs. Dogs were strictly not allowed under our occupancy agreement. And the board had an advisory referendum with the shareholders and they proceeded to permit dogs, with certain limitations. And that was a new house rule that was adopted, posted, shareholders notified, and now it’s part of how we operate every day. There are dos and don’ts surrounding that to some degree, but it’s a new rule that was not intended in the original occupancy agreement. So there is within most proprietary leases and occupancy agreements the ability to change a rule, or insert a new one.” Modifying an existing rule, he adds, might mean eliminating it entirely.

The dog rule had its opponents, and indeed still does. “We still have an ‘anti-dog’ faction,” he says, “and the people who walk their dogs are often resentful of these people telling them what to do, or complaining about which spot their dog chooses to pee in. The dog, with all due respect, is going to pee someplace. He’s outside now, and he’s not a human being… he’s not going to hold it until a particular resident decides it’s the appropriate place.”

It may be that, at some future date, Penn South will have a change of heart about Fido and Spot. Rules can change, just as they can come into being in the first place.

“Assuming that the co-op operates with a reasonable amount of openness and democracy, it isn’t difficult for a resident to complain about an unfair or unnecessary rule, ” Keany says. “It’s a letter to the president of the board, or a letter to the managing agent asking that the board be alerted to this. I personally think that a letter directly to the board,” rather than the managing agent, “is the way to go. Because it also reminds the elected board members that they’re accountable to the shareholders. And this hold true for the opposite situation as well, when there isn’t a rule prohibiting a certain thing, but residents think that there should be one.”

Approving new rules is different, depending on which document is being amended. “Rules and regulations are approved by the board only, compared to an amendment to the restrictions in the governing documents, meaning the declaration or bylaws, which require unit owner consent,” says Dakoff. “Our statute [in Illinois] has a range. It’s to be no less than two-thirds, and no more than 75 percent [of residents]. Also, when you amend governing documents, you have to look and see if there are any restrictions requiring mortgagee approval. For certain types of restrictions you may even need mortgagee consent. So amending the governing documents is a much more onerous procedure.” 

This is not the case with house rules. “With rules and regulations, the board just drafts whatever it thinks is reasonable,” Dakoff continues. “Hopefully they have their attorney review it for consistency with the governing documents and Illinois law. We don’t review to say whether or not they should have a hallway floor mat rule, for example. We don’t make determinations as to whether it’s a good rule or a bad rule. We will definitely comment if we think it’s an outlier rule, but we’re really reviewing it for consistency with the governing documents and consistency with applicable law.”

Berger concurs. “You want to make sure that a contemplated rule does not contradict another provision in the governing documents or in the pertinent statutes, that it is properly passed and that the members are properly notified of its existence. Boards should spend 95 percent of their time identifying the problem and 5 percent crafting the solution via rule. Unfortunately, most approach the issue in the reverse order.”

At the end of the day, rules and regulations are in place to make a building more pleasant to live in—for everyone. “What I always counsel clients is: there is a balance,” says Dakoff. “The rules are meant to incentivize the harmonious living of a significant number of people who are physically on top of each other.”

Keany agrees. “If you live in a co-op, you’re supposed to be cooperative. If you live to that principle, then maybe a lot of these rules aren’t needed.”                         

Greg Olear is a freelance writer and published novelist, and a frequent contributor to The South Florida Cooperator.