The legal distinction between rules & regulations and covenants

A reader posted this question on social media today: “What are the legal differences between Rules and Regulations vs. Covenants and Restrictions?” This is a good question. It is always timely, because many association boards do not know the difference. The failure to understand this distinction invariably gets boards and associations into trouble.

Long-standing law allows a landowner to create covenants on his/her property. When a developer acquires a tract or tracts of raw land, he owns all the subdivided lots that he then subdivides. The developer is entitled to impress covenants on property he still owns. Covenants run with the land, meaning they are binding on all future purchasers. Covenants can be positive (creating an affirmative obligation) or negative (a restriction regarding the use of property). Florida (and most other states) courts have held that covenants carry a presumption of validity, because they were impressed on the land by the original owner and require a vote of the members to amend. Under Florida law, covenants must be recorded. In both condos and HOAs, the Declaration includes covenants drafted by the original owner of all the lots (parcels or units). Co-ops are a bit different, but generally have co-op documents which include covenants as well. I will use Declaration interchangeably with covenants here. They are distinct from rules and regulations.

Rules and regulations are usually board-created and can be amended by the board, without input from the association members. Rarely, rules and regulations are attached as exhibits to a Declaration, in which case they are incorporated into the Declaration, drafted by the original developer. In those cases, they would be recorded. Often, they are not. The authority for a Board to create rules and regulations (on any specific matter) must be either expressly authorized by the Declaration or reasonably inferred from it. They certainly must be consistent with the Declaration and the scheme of development of the community. Florida courts have held that board-created rules and regulations do not carry the same presumption of validity as covenants. Legally, this means the can be more readily challenged. Finally, rules and regulations must be reasonable, not arbitrary or capricious and have some objective basis.

I will use my own community as an example of what a board should NOT do. A decade ago, our then-existing board created a rule allowing free-standing basketball hoops and another requiring a green Victorian mailbox to go with our Spanish style architecture. What about these rules? Our community’s covenants expressly prohibited these kinds of basketball hoops. The board violated the covenants when it created a rule allowing them. As to the mailbox rule (no pun intended, for the lawyers out there), our community originally had many different types of mailboxes. Although the board had the authority to approve mailboxes, it did not have the authority to require only one type of mailbox, and one that was inconsistent with the general scheme of development. What was the reason for this type of mailbox? The hockey player husband of a board member liked it and bought it for their own property. This is not a good reason for a board-created rule.

When I asked a board member why he did not read the covenants that he was purportedly enforcing, he said that he could not read all that “legal mumbo jumbo” but he knew what was “good for the community.” Let me make clear one point: Violating the covenants and exposing the association to liability is not good for the community. Ever.

by: Jean Winters, Esq.

Read more from source site