Modern Declarations of Condominium (or “CC&Rs” in HOAs - ) usually authorize the board of directors to enact certain rules and regulations. Over the years, I have written about the distinctions between board-enacted rules and the use restrictions contained in a Declaration. These distinctions are important and often misunderstood. Most importantly, boards can usually enact and amend rules without a membership vote. Amendments to a Declaration’s use restrictions almost always require a membership vote. The Board’s authority to create a rule is limited by what the Declaration expressly provides or that which can be reasonably inferred from it. Courts scrutinize board-enacted rules more strictly than provisions in a Declaration, just because boards can create and amend rules without membership input. As a result, rules do not carry a “presumption of validity” that a Declaration’s use restrictions do, and can more easily be challenged.

Little has been said about boards’ all-too-common practice of copying a Declaration’s use restrictions into the board’s rules and regulations. This is always bad practice. First, there is no need to duplicate what is already in the Declaration. It is redundant. Secondly, duplicating the use restrictions invariably leads to confusion and error.

There is a far more serious ramification than mere redundancy or confusion, however. Recently, a colleague asked me to look at a situation with a board in a condominium development. The Board first created its rules by copying the use restrictions. It then began amending these “Rules and Regulations”. In several instances, these changes directly contradicted what was contained in the Declaration’s use restrictions. I hope you see the problem with this. The board cannot circumvent a membership vote by calling the Declaration’s use restrictions “Rules and Regulations.”

The Board also made additions to its rules and regulations (the re-named use restrictions from the Declaration). As an example, suppose the Declaration contained use restrictions regarding the clubhouse. These provisions were itemized, and detailed. Is there a problem with the board adding to these restrictions in the rules and regulations? The answer to this question, although less obvious, is also “Yes”. In law, there are rules of contract interpretation. Where a provision has a very detailed “laundry list” of items, that list is complete. The inclusion of the items in a detailed list necessarily excludes items not contained in it. In other words, the Board’s adding to the clubhouse use restrictions in its rules and restrictions was inconsistent with the Declaration. Additions would require a membership vote and amendment to the Declaration.

As a result of “amending” the Declaration’s use restrictions with only a board vote, this condominium board is violating Florida law and breaching its fiduciary duty to the members. Unfortunately, boards often do not understand their limitations in creating rules and regulations, and the ramifications that can result. There is never a legitimate need or reason to copy sections of the Declaration into the rules and regulations. If boards are unsure of their rule-making authority, they would be well-advised to ask counsel before making major changes.

Posted by by: Jean Winters, Esq. on January 16th, 2015. Posted in SunSentinel Online.

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