BEING
REASONABLE
Enforcing Rules While Promoting Harmony and Avoiding Headlines
Author’s Note: CAI recently presented a seminar, presented by Mike Pesce and David Ramsey, Esq. concerning how to enforce rules and restrictions within communities in a reasonable fashion, while avoiding being on the front page of the local newspaper. The following article is a synopsis of the concepts presented at the seminar.
Most community associations seek to enforce their rules while still maintaining a harmonious community that the residents view as a desirable place to live. At times, though, these goals seem to be contradictory. Strictly enforcing the rules can result in controversy. Recent events, such as attempts to enforce association restrictions against flying flags, have generated significant media attention and, as a result, attention from state and local legislatures. These goals need not always be treated as conflicting. The use of common sense and flexibility allows the association to enforce the essential purpose of a particular rule while not dragging the association into controversy that divides the community.
Many governing board members believe that the failure to enforce rules in every instance will result in the loss of their ability to enforce the same rules in the future. We also regularly hear boards espouse the theory that allowing a deviation from a rule in one instance creates a “precedent” that will then obligate the board to allow similar deviations from the same rule in every instance. For the most part, these are canards that are not well grounded in the law and force associations into positions of inflexibility that results in the belief that associations are cold, lacking in humanity, and require a legislative reigning in. This article examines both the legal underpinnings for these beliefs and offers practical solutions to avoid unnecessary disharmony.
To be sure, exercising flexibility and discretion requires more effort. An issue must be examined in greater detail, various alternatives must be vetted and a decision reached that supports the intended purpose of a rule while avoiding needlessly strict interpretations. Changes in the values of the community, the culture at large and current events must all be factored in. Many board members may prefer the black-and-white approach because it simplifies the process and allows board members to devote more time to what is viewed as the essential functions of a board in reviewing contract specifications, budgeting and so forth. However, it ignores the fact that the community association field has learned that, perhaps, the most important function of a board – and a factor that builds value in a community just as much as the beauty of the landscaping – is the sense of harmony that exists in the community.
In this context the word “reasonable” is difficult to define. All parties to a dispute believe they are reasonable and the other party is not. Often, the basis for a dispute is the failure of each party to recognize the interests of the other party, and before those interests are truly understood emotion takes over through escalating verbiage that leads the parties to believe that there is no purpose in exploring alternatives. One definition of “reasonable” can be discerned from the opinions penned by our courts. In determining whether boards have acted in a reasonable fashion courts have repeatedly looked at certain attributes at the board’s decision-making process. Did the board deliberate? In other words did it take time in reaching a decision or was the decision generated in a purely reactive manner. If the board did deliberate did it take into consideration alternatives. Not only the alternatives offered by the owner against whom a rule is being enforced but other alternatives that had not yet been explored? And did the board exercise restraint? In other words, did it adopt or enforce a rule in a manner that went beyond responding to a problem that the rule was intended to address? Even where a particular judge may find that he or she would have determined a matter differently, if the board’s decision was reached through a deliberative process where various alternatives were explored and chose the least confrontational approach that would cure the ill that the rule sought to address, courts will routinely uphold boards.
Increasingly important has been the concept of what legislators view as reasonable. More frequently, we find legislators or important legislative staff members who live in community associations. Not infrequently, they have experienced some aspect of life in community associations that demonstrated a lack of flexibility or common sense that lead to a conclusion that legislation was necessary to deal with what is increasingly being viewed as quasi-governmental entities. Many legislators have a municipal background and are familiar with the requirements and restrictions that apply to municipal governments. They do not understand why the same restrictions and requirements should be applied to community associations. While community associations are not a precise analogue to municipal governments there are, of course, aspects that bear a striking resemblance. Hence, the opinion of legislators with respect to what constitutes reasonable behavior is particularly important if community associations desire to avoid overly burdensome legislation controlling the powers of boards of trustees.
A brief review of cases in both New Jersey and from around the country is helpful in understanding in how courts view deviations from rules enforcement. While many of these cases deal with homeowners associations or restrictions imposed by deed where an association did not exist, the principles are easily transferable to enforcement of rules by associations.
For instance, in a recent Washington Appellate case, Peckham v. Milroy, Peckham sued adjoining owners who renovated their home and commenced the operation of a daycare business. The restrictions of the community prohibited the use of property for a business purpose. The Milroys renovated the home and obtained a daycare license from the State of Washington. After Peckham warned the Milroys that conducting a daycare business violated the restrictions, they nonetheless proceeded, claiming to need the income to continue to live in the home. Peckham sued seeking to enjoin the use of the property for a business purpose.
The Milroys contended that the rule against businesses had been abandoned because, among other home businesses, there were homes that housed a drapery business, a painting business, TV repair and small construction. The court found, however, that the number of violations were not substantial and comprised a small percentage of the lots within the community. The Milroys further argued that equitable principles of estoppel and laches prohibited the enforcement of the no-business rule. The court rejected these arguments as well. Finally, the Milroys argued that the character of the community had changed because of the failure to enforce the restrictions. The court found, however, that the changes in the community must be significant. Here, there was no such evidence and the court approved the relief sought by Peckham to enjoin the business.
How much deviation is permitted, however, before a court determines it is too much? The answer appears to be quite a bit. For instance, in Pietrowski v. Dufrane, the Wisconsin Court of Appeals found that where there was a restriction against outbuildings, and where there were numerous sheds in the community and where Pietrowski, the person seeking to enforce the restriction, had a shed herself, did not prevent her from seeking enforcement of the restriction when Dufrane built a two-car garage. The court found that Dufrane’s argument that Pietrowski had “unclean hands,” because she had a shed of her own, could be forgiven because there is a difference between slight violations of a rule and significant violations. Hence, minor violations with sheds that were typically 80 or 100 square feet could not be compared to material violations where a garage of 440 square feet was proposed to be built. The rule was still enforceable against this larger violation that would have a more significant impact upon surrounding property owners.
The Pietrowski case is particularly instructive because it clearly demonstrates that allowing minor violations of a rule will not result in the loss of ability to enforce a rule against those types of violations that have a more corrosive impact upon other property owners.
New Jersey courts follow a similar position. In Steiger v. Lenoci the New Jersey appellate division forced the removal of a constructed pool cabana that was 600 square feet, contained a bathroom, refrigerator, dryer, wet bar, and heating system. They did so, despite the fact that nine out of 19 lots on the same block had outbuildings that were prohibited by the rules. The court repeated an oft-held rule that “the violations must be so pervasive as to indicate either a change in the neighborhood or a clear intent on the part of the property owners generally to abandon or modify the original plan…therefore, evidence of isolated or minor violations is insufficient to establish an abandonment or modification of a restrictive covenant.” In this case, the court found that although there were 15 outbuildings on 118 lots, where four of the lots contained pool cabanas, there was insufficient evidence that the community desired to abandon the rule. Again, the court in this case found that even if there had been evidence of a substantial number of violations, the court would be required to differentiate minor violations of the rule from substantial violations. As a result, the defendants in the case were required to remove a substantial and expensive structure even though there were other violations of the same rule in the community.
These cases all suggest that boards have the flexibility to review the significance of a particular deviation from a rule and to allow isolated deviations where they do not offend the intended purpose of the rule. Even where the purpose of the rule may be violated, these cases clearly indicate that a single or even several violations will not constitute sufficient precedent to prevent future enforcement of the rule should a board determine that prior exceptions were not prudent.
We turn now to the practical aspects of rules adoption and enforcement and suggest approaches that boards should consider.
Boards would be well served to seek input from the community before adopting significant rules. Although individual owners may complain about particular circumstances that convinces a board that new rules are required, the failure to seek “buy-in” from a significant portion of the community will doom a new rule from its inception. Furthermore, the failure to involve the community often results in not considering alternatives that may have been preferable to ones proposed by the board.
In most association documents, the board is empowered to adopt and amend rules and regulations of the community, except for those restrictions appearing in the governing documents (Master Deeds, Declaration of Covenants or Proprietary Leases), which require unit owner approval. In exercising this rule-making authority, boards should be careful to take the pulse of the residents of the community before acting. Experience has taught that many boards have either adopted rules at serious variance with the prevailing thought of the residents that they serve, or were about to do so when they asked for resident input. Accordingly, resident input should be solicited on controversial issues such as recreational equipment on lots or common areas, trash removal receptacles and regulations, pet restrictions, holiday decorations, parking, etc. In addition, boards should be sensitive to evolving standards, technology and opinions about these types of issues. Put another way, what might have been offensive to residents in the community 10 years ago may be acceptable today. Although not all condominium associations would find the presence of satellite dishes on common elements acceptable, a higher percentage of owners would find them inoffensive then would have even five years ago. As a result, a board’s view on satellite dishes must take into consideration the demand that may legitimately alter a board’s concern from absolute ban on the common elements to considering possible locations that are not intrusive or that focus more on the method of installation so that damage is not done to the physical assets of the association.
The adoption and amendment of rules, and their enforcement, once adopted, are heavily dependent upon consistent education of residents. This is particularly important during the rules adoption process. History tells us that even if a resident objects to the substance of a rule, if they feel like they were given an opportunity for input in the adoption process, they are more apt to adhere to the rule once in place. All of the various rules and restrictions of a community should also be included in the welcome packet given to new members of an association. Some associations, when adopting amendments to their governing documents, have even included a requirement that new buyers must participate in an orientation meeting advising them of the community’s rules and practices before they may obtain amenities like clickers to access gates or gain access to recreational facilities like swimming pools. In many instances, rule violations are the product of nothing more than ignorance of the offender.
All rules were not created equal and as suggested by the cases reviewed above, need not be enforced equally. In other words, a board may well choose to more vigorously enforce a rule requiring a dog owner to pick up after their pet, and more or less ignore a rule prohibiting anything to be placed on the front steps of a unit which, read literally, would prohibit such items as flower pots, benches, etc. Many if not most association restrictions start with what one might call the “no nothing, nowhere” set of restrictions which, if read literally, would prohibit an owner from personalizing the exterior of their home in any manner. Most boards adopt a more relaxed view of these documents, while seeking to rigidly enforce other rules with more dramatic negative impact on the community.
There is no right or wrong in deciding which rules should be applied more vigorously than others. Indeed, the personality of each community and the board which governs it will oftentimes have a dramatic impact on this prioritization process. What is important is that the board and whoever will be involved in rules enforcement (typically its manager, committees, etc.) sit down early on and review every rule and prioritize what matters and what does not.
Avoiding antagonistic struggles over rules enforcement is often dependent upon the manner in which the enforcement process begins. There is no requirement that the first step in the enforcement process be a cold letter from the management company threatening fines and other draconian measures in the event of continued non-compliance. A friendly telephone call or a softer letter that seeks to educate a violating owner rather than threatening them, may prevent a small issue from escalating further.
Some issues are more inherently controversial and emotional than others and require a more sensitive approach to not only avoid controversy within the community but media attention that is polarizing. Boards and managers must be cognizant that the typical front page article in the Star Ledger or lead story on the nightly news will be the result of typical media policies that promote the underdog and emphasize unflattering facts, while ignoring facts that are either difficult to explain or contrary to a good news story. Often, these stories revolve around religion, expressions of patriotism, pets and typical sporting activities, particularly basketball. Although ostensibly not on the same plane in terms of importance, these issues share the common denominator of inflaming passions or placing a significant portion of the community in one of two or more camps. Accordingly, when communities seek to enforce rules and restrictions in these areas, special care should be taken up front to deal with them differently than less volatile matters. That may well mean going slowly when approaching these issues and showing some flexibility that is not always the hallmark of community association leadership. Board and management should also seek professional advice when confronting these difficult issues. It is far better to solicit the community’s attorney’s opinion before rather than after an unflattering photograph of a board member is on the front page of the newspaper and, indeed, it may avoid any media attention at mall.
Associations should consider alternative enforcement mechanisms. Many rules enforcement issues lend themselves to utilizing outside authorities as the enforcers, rather than pitting the association against one of its residents. Examples include noise complaints, dog walking issues, operating businesses within units and overcrowding concerns, all of which are typically governed by local ordinances enforced by local officials. When given that option, let the outside authority do the heavy lifting. Sometimes, municipal officials will attempt to avoid their responsibilities by claiming that disputes within an association are occurring on “private property,” and therefore beyond their jurisdiction. This is often incorrect and sometimes a short conversation with the mayor or an appropriate letter from the association’s attorney is all that is necessary to bring about compliance by the municipal authorities.
On occasion the issue before the board concerns one owner haranguing the board for failing to enforce a rule while another takes the contrary position. If the board sincerely believes the strict enforcement of the rule will not further its intended purpose, it should explain the rationale for its position to the complaining resident and remind him that if he would like to enforce the rule himself, he is free to do so. While this may not mollify the complaining owner, the approach is clearly preferable to involving the board in a divisive issue that will linger far too long.
Managers are often confronted with the question of what their role in the rules enforcement process should be. Certainly it is to enforce the regulations of the association, subject to the prioritizing process noted above. However, it is also to provide advice to the board and association when the board may be going down a road with potential adverse consequences. One of the sad consequences of managers being criticized for their performance is that they become less and less willing to offer advice in areas like this, for fear that they maybe criticized if things do not go well. However, an experienced manager will oftentimes have handled matters such as this before, and their advice should certainly be solicited and considered.
Although many enforcement issues have the potential for becoming causes célèbre, the most recent front page issue, and the one that caused CAI to schedule the seminar that preceded this article, was the controversy surrounding a central New Jersey community association that sought to compel a resident to remove a POW flag that they had installed on the exterior of their home. Without exploring all of the circumstances that resulted in the association’s handling of this matter, the simple fact is that the press attention relating to it seriously hurt the image of community associations. As a result of that controversy, the Townships of Hamilton, where the association was located, and Lawrence, next door, have now each adopted an ordinance guaranteeing residents within community associations the right to fly POW/MIA flags, the official flags of the armed forces, and yellow ribbons. CAI has and continues to support a pending state bill dealing largely with the same topic, but has been successful in achieving amendments to this bill which tempers a resident’s ability to display these items with concerns about restrictions of maintenance activities of the association, interfering with the property rights of another, or threatening public safety. Because of the negative press created by the above situation, the Hamilton and Lawrence Township ordinances contain no such limitations.
In conclusion, disputes involving even the most difficult issues need not inevitably result in bitter struggles and bad press, and associations can minimize that potential if they act slowly, carefully and with reason in these sensitive areas.
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CONDO: Being Reasonable in Rules Enforcement