Part II: Rule Development & Enforcement for HOAs: Board Authority
Continuing on with our series on Rule Development and Enforcement for Communication Associations, this week we delve into the board's authority to make and enforce rules, define rules and guidelines, as well as their scope.
SOURCES OF AUTHORITY TO MAKE AND ENFORCE RULES: Check all of the community association’s legal documents to verify the board’s authority to make and enforce rules. The most important sources of a community’s authority to make and enforce rules are:
State statutes and court decisions: Often statutes or case law empower the board to make and enforce rules. Consult with your legal counsel periodically to ensure rules are proper under the current law.
Governing documents: Governing documents provide general powers, which consist of the broad authority to adopt and enforce rules in order to carry out the purpose of the community association. That purpose is to preserve, maintain, protect and enhance the community’s property (not the individual residents or guests). Governing documents also provide specific powers, such as the authority to adopt and enforce rules in specific areas. Governing documents may be silent as to the ability to adopt rules; however, general corporate power in the Not-for-Profit Act or Business Code may provide this right. Check your state statute for this authority.
Final authority and responsibility to adopt and enforce rules rests with the board of directors – unless the governing documents specify otherwise. A board may delegate the task of drafting or enforcing rules
The board should include the owners in the formation of rules. The use of town meetings or focus groups to review proposed rules may be helpful. Normally a board will receive limited input from owners for a proposed rule unless it is controversial. Owners may offer a very important and different perspective of the proposed rule that the rule-makers did not consider. Finally, soliciting input assures the owners that the board values their opinion.