By Chandler W. Travis, Esq.
As we begin to turn our attention to 2022 and the start of a New Year, we often start discussing the time-honored tradition of making a New Year’s resolution. Associations’ Board of Directors have the authority to adopt resolutions, also referred to as the rules, based upon provisions in the association’s governing documents and the Restatement (Third) of Property: Servitudes §6.7 (2000).
To start the process for a Board to adopt a resolution/rule, one must review the association’s governing documents, which include the recorded declaration, bylaws, articles of incorporation, and any previously adopted Board resolutions/rules. The governing documents will specify what power a Board has to adopt a resolution relating to the use of the common areas and/or areas individually owned, i.e., an owner’s lot.
Next, and most importantly, the Board must identify the resolution’s purpose or goal and then consider whether such resolution is “reasonable.” Section 6.7 of the Restatement specifies that a Board only has the implied power to adopt “reasonable rules.” If there is a challenge to a Board-adopted resolution, a court will review the resolution to determine if it is “reasonable.”
Also, a Board-adopted resolution cannot contradict a provision in the recorded declaration, bylaws, or articles of incorporation. If a Board adopts a resolution which contradicts the governing documents, then a court would find such a resolution unenforceable.
With these considerations in mind, a Board, with assistance from its community manager and legal counsel, can draft the resolution. If the Board drafts the resolution, then it should have its legal counsel review this proposed resolution. After this step, the Board should place the proposed resolution on its open meeting agenda for discussion.
At the Board meeting, after a motion and second to approve the resolution, the Board can vote to adopt the resolution following discussion. Once approved, the resolution should be finalized reflecting its approval with the signature by an officer of the Board. Finally, the Board provides the adopted resolution to the members of the Association so that they are aware of the newly adopted resolution/rule. I encourage associations to mail such newly adopted resolutions to all members as well as posting on the resolution/rule on the association’s website or other means to alert the members.
The Association and its Board must keep this resolution and enforce it until either the Board elects to rescind the resolution or, in the rarest of occasions, a court determines the resolution to be invalid.
While the Board resolution process has more steps than a simple New Year’s resolution, Board adopted resolutions/rules are of great benefit to community associations when enacted and enforced reasonably.
The information provided herein is for reference purposes only, is general in nature, and is not intended as legal advice. For specific questions or legal issues regarding your association, please contact us at 480-219-3633.