Publications
Adopting Rules and Regulations
The typical declaration and by-laws for most associations are generally deficient in providing specific information about the requirements of day-today living at the property. Further, since the declaration and by-laws usually require a 2/3 or 3/4 majority to approve any amendments, it is not practical to incorporate laundry room hours, garbage pickups, pool rules, etc., when modifications are so difficult and cumbersome to achieve and may change frequently.
Therefore, most governing documents and in some instances statutory authority (e.g., Section 18.4 of the Illinois Condominium Property Act [765 ILCS 6-5/18.4 et seq.]) authorizes a board of directors to adopt reasonable rules and regulations.
The rules and regulations are a significant source of authority for the board because they are the "living and breathing" document that governs the day-today operations of any association. The rules and regulations should read between the lines of the declaration and by-laws and have the same force and effect as the governing documents.
Although a developer may use an identical set of declarations and by-Laws for more than one property, this cannot be said for rules and regulations, since no two developments are alike in the way they are administered. More and more courts are giving greater credibility to the specificity of the rules as opposed to the overbroad, generic provisions of declarations and by-laws.
INITIAL DRAFTING
Once a board is controlled by the membership, one of its very first tasks should be the adoption of the initial set of rules and regulations.
First, the board should create a special committee composed of one board member and several interested homeowners. The committee's sole purpose should be to create an initial draft for full board review.
Second, it is a good idea to obtain sample copies of rules and regulations from other similarly situated associations to use as examples. Then, specific guidelines can be established which are peculiar to particular needs, but at least there is a framework to follow without "re-inventing the wheel." Also, some of the more relevant portions of the declaration and by-Laws should be included by removing the "legalese" and rewording these provisions in plain English.
Third, all categories and specific rules should be numbered for future reference.
Finally, once an acceptable draft is agreed upon by the committee, it should be submitted to the association's legal counsel for a legal review. This will allow the attorney the opportunity to make sure that the proposed rules and regulations: (1) conform to the governing documents and statutes and (2) contain no illegal provisions.
Thereafter, the preliminary draft is submitted to the board of directors for its review and the preparation of a final draft.
ADOPTION
The final draft should then be sent to all members of the association in conjunction with a notice of a special meeting of the association to discuss the rules and regulations (for condominiums in Illinois, this is mandatory under Section 18.4 et seq. of the Illinois Condominium Property Act).
This special meeting should be called so homeowners can give their input and ask questions. However, the ultimate authority to adopt the rules and regulations lies exclusively with the board, as the elected representatives of the association.
The "final/final" draft which becomes the official operating document should then be ratified at the next regular or special meeting of the board of directors.
OPERATION
The rules and regulations of an association are only as good as the efforts of the Board to enforce them. This requires the education of all present and future residents as to their contents, as well as educating residents about the procedures for enforcement, such as fines and legal action. Copies should be made readily available at a nominal charge and all new residents, whether tenants or owners, must receive a current copy and should acknowledge receipt in writing to be kept on file by the association.
Pertinent sections should be reproduced and posted at the appropriate places on the property (pool rules at the pool, laundry rules in the laundry rooms, etc.).
Finally, the members of an association must be made aware that the elected board of directors and the manager are not the local police department and cannot be expected to witness all violations and solve all disputes between residents. The members of the association must be willing to come forward and notify the board or file complaints when rule violations occur. They must also be willing to give testimony to prove the accusations in order for the board to utilize prescribed enforcement procedures.
Violations of the law, however, must be reported to the police and as a practical matter, the association should refrain from getting involved in simple "neighbor" disputes that do not affect the common areas or the health, safety and welfare of the members of the association.
ENFORCEMENT
The association must have a specific, detailed procedure for enforcing punishment of rule infractions. Whether it is arbitration proceedings, denial of privileges, fines, etc., they must be set forth in precise detail. Paramount to imposition of any punishment is "Notice" and an "opportunity to be heard." (Section 18.4(e) Illinois Condominium Property Act regarding fines.) Once an association assumes police powers, it must afford the accused due process. By affording all accused rule violators an opportunity for a fair and impartial hearing, an association can avoid being accused of being "arbitrary and capricious."
It is recommended that a separate committee be chosen for hearing rule violation proceedings, with the board being the final arbiter. After notice is sent and a hearing is held (with or without the accused being present), the committee should then deliberate in private. The committee's recommendation should be submitted to the board to be voted on at the next open meeting. Thereafter, a written finding should be sent to the accused. In this way, the board can remain detached from the hearing process and maintain its objectivity in the event of a request for reconsideration.
The enforcement procedure should also specify a schedule of fines, suspension of privileges, legal remedies and other details, including an admonishment that the guilty party will be responsible for the association's costs and legal fees in the event legal proceedings are warranted.
PERIODIC REVIEW AND UPDATE
In order for rules and regulations to be truly effective, they must be kept up to date. It is my recommendation that each year the Rules Committee be reconvened to review the existing documents, copies of minutes of the previous year's board meetings, copies of all amendments, resolutions, motions and changes in the law. Any changes or additions should be incorporated in order to update the rules and regulations on an on-going and regularly scheduled basis. It is further recommended that an association forego the expensive printing and utilize a flexible and economic method of reproducing the rules so that an annual revision or re-duplication is not a major financial burden.
Copies of changes and modifications should be sent to all members of the association, without the necessity of a meeting, unless the entire set is being substantially revised.
Complete copies of the revised rules and regulations should be given to all new and existing residents upon request, and the board can charge a reasonable fee (Section 19 of the Illinois Condominium Property Act).
By establishing a tradition of having an annual review, the rules and regulations will not get stale and the association can avoid having a rule struck down by a court for arbitrary enforcement of rules governing inapplicable situations. It is also my opinion that by implementing a policy of annual review, the board of directors would be satisfying some potential concerns of its Errors and Omissions insurance carrier.