This was an article published in the business section of the November 12, 2016 edition of the San Diego Union Tribune.
Can Homeowners Association boards pass any rule they want?
By Kelly G. Richardson
I’m confused between rules and CC&R’s. Our board, over the years, has implemented new rules. How is this different than making changes to the CC&R’s, which would require homeowner approval? For example, the board passed a rule prohibiting playing in the street. When I bought my house, there was no such prohibition. Now, after my kids started playing in the streets, they prohibit it. I didn’t get to vote on this. Can the board just implement new rules whenever they want? — R.D., Vista
CC&Rs (Covenants, Conditions & Restrictions) are generally amended by a membership vote, while operating rules are created and amended only by vote of the board. Civil 5350 requires operating rules be written, and per Sections 4205 and 4350(c) cannot conflict with the CC&Rs or bylaws.
Boards can adopt and change rules but should consider the community’s desires. Civil 4360(a) requires the verbatim text of any proposed rule change be published at least 30 days before the vote to approve the change. At the meeting to vote on the change, the board must per Civil 4360(b) provide an open forum opportunity on the proposed change. The board should heed member input, because, if the board seriously misreads the community’s desire, the members can under Section 4365 petition for a membership meeting to overturn the rule change. A majority of a quorum of the entire membership can vote to overturn the change. So no, directors cannot do whatever they want – they must always keep an ear open to the community.
However, most lawyers would strongly recommend against allowing recreation in the streets, due to safety concerns.
Where is there, in any writing of CC&Rs, or in bylaws, the notion that an homeowners association board can determine, on its own, what is beneficial to the homeowners group by enacting its own self-sustaining policies? Where do they have the authority to make determinations on what will reduce homeowner conflict, and what can they cite in legal terms to give themselves that mandate?
Where, if anywhere, in CC&Rs or in bylaws, is disciplinary confidentiality granted to the board? — S.F., San Diego
Boards are required to have at least five different types of written rules – architectural application policies (per Civil 4765(a)(1)), assessment collection policies (Civil 5310(a)(7)), internal dispute resolution procedures (Civil 5905), election rules (Civil 5105) and a schedule of fines (Civil 5850). In addition to these required rules, a board may under Civil 4350 adopt other operating rules which are deemed beneficial for the community. Associations need this flexibility, because the CC&Rs are hard to amend and cannot anticipate every issue.
Certain board items concerning members must be confidential, including disciplinary or reimbursement assessment hearings, assessment foreclosure votes, and delinquent member proposed payment plans. The law allows those matters to be in closed session, protecting the privacy of the involved homeowner. No law specifically requires that disciplinary actions be confidential. However, nothing is gained from potentially embarrassing the complainer or the subject of the complaint. The goal of discipline is to stop the objectionable conduct.
The superlative board, manager and counsel follow the letter of the law but also act with an eye toward decreasing conflict. Keeping the process confidential helps.
Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Managing Partner of Richardson Harman Ober PC, a law firm known for community association advice. Submit questions to KRichardson@RHOpc.com. Past columns at http://www.HOAHomefront.com.