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KASS: When a board won’t enforce ‘house rules’

I live in a condominium complex where there is no enforcement of the “house rules.” I have noisy neighbors, neighbors with three cars (for their two-person, one-bedroom condo), neighbors who erect anything and everything on the common elements. The board of the association does not appear to be doing anything about these quality of life violations. This lack of enforcement troubles me greatly. Does a Board have to enforce all the rules? Kerry.

Kerry, serving as a member of a board of directors of a community association is, to say the least, a very difficult task. You are “damned if you do, and damned if you don’t.” All too often, competent, responsive boards of directors are faced with a difficult decision: do we enforce our rules, or can we ignore some of the minor violations that occur within the community?

There are a number of ways a board can enforce its rules.

First, boards generally have authority under the association bylaws to take an errant unit owner to court. This is time consuming and expensive, and no one can predict with certainty what a court will do. Many courts throughout the country are concerned about enforcing relatively petty matters, especially if the alleged violation occurs within the confines of the unit, as compared to the common elements.

Second, the board can establish a set of fines for any violation of the legal documents. Many state laws require that a “due process hearing” procedure be established. Under this process, the board would advise a unit owner of its intention to impose a fine, and hold a hearing, giving the owner an opportunity to present his or her case as to why the fine should not be imposed. The unit owner is entitled to fully participate at this hearing, and indeed bring his or her own lawyer.

The fine procedure is workable, since the fine then becomes part of the unit owner’s financial obligations to the association. If the errant owner does not pay the fine, the association would have the right to go to court seeking a money judgment against that owner, and in most cases (depending on the documents themselves) all or a portion of the association’s attorney’s fees could also be awarded. Foreclosure by the condo association is also an option.

A major dilemma facing many boards today is whether they really have to enforce all of the rules and regulations. The current trend in the law is that a board of directors can ignore certain violations, if the board acts reasonably and in good faith. This is called the “business judgement rule.” The board should consult its members and its counsel, and have a full debate and discussion in open session as to why the board believes certain violations should be ignored. If, after going through this process, the board makes such a decision, the board may be insulated from liability if a unit owner files suit against that board for failure to enforce the association documents.

Clearly, there are some rules which a board has to enforce. For example, if an owner is creating a life-threatening problem which impacts on the health and safety of other unit owners, the board has an obligation to enforce those infractions, even if it necessitates spending legal fees to accomplish this objective. On the other hand, there are numerous violations which the courts have considered “petty.” In my opinion, a board does not have to enforce every single rule and regulation, merely because they are on the books of the association. But, the board does have an obligation to advise the owners of its decisions. Presumably, if enough owners disagree with the board’s decision, they can attempt to mount a recall petition, whereby the current board would be thrown out of office — or not elected at the next annual meeting.

But a board of directors cannot enforce the rules and regulations in an arbitrary, capricious or selective manner.   If they are not going to enforce a particular rule, this non-enforcement has to be across-the-board. Conversely, if the Board is going to enforce its documents, the enforcement has to be fair and levied against every owner who is in violation.

The board also has the right to repeal certain rules and regulations, but has to comply with applicable state law as well as any requirements in their legal documents.

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