By: Scott A. Rosenlund, Attorney
Fullett Rosenlund Anderson PC
Lake Zurich and Chicago

Community associations seeking to make additions to their governing documents often ask whether the changes may be implemented through revised rules and regulations or whether they must be adopted via an amendment to the declaration or bylaws. Depending on the nature of the contemplated revisions, analysis by association legal counsel may be warranted. But an association in any event should ask itself the following questions before adopting a new rule.

Does the proposed rule directly contradict the declaration and bylaws? 

If the answer to this question is “yes,” a declaration or bylaw amendment is most likely required. Limited exceptions to this general principle exist when applicable laws clearly override the declaration or bylaw provision at issue and authorize the rule. For example, Subsection 12(h) of the Illinois Condominium Property Act expressly provides that a condominium board, by rule, may require unit owners to obtain individual liability insurance coverage.

Does the proposed rule indirectly conflict with the declaration and bylaws?

By way of example, until recently, there were differing viewpoints amongst community association professionals regarding an association’s authority to adopt leasing restrictions by rule. Many professionals took the position that leasing restrictions can be adopted via rule only on the very rare occasions when the declaration and bylaws are completely silent as to leasing or when the declaration and bylaws expressly allow such rules. Others employed a more aggressive approach and supported adoption of rules restricting leasing so long as there was not a direct, obvious conflict between the declaration and bylaws versus the rules. The latter, more aggressive approach was rejected in the 2016 court decision Stobe v. 842-848 West Bradley Place Condominium Association. In the Stobe case, the Illinois Appellate Court (First District) held that a condominium association rule imposing a 30-percent cap on leasing was invalid because the declaration mentioned the leasing of units and did not expressly allow the association to impose further restrictions on leasing by rule.

Do the declaration and bylaws expressly mention the board’s authority to adopt rules relating to a particular subject? 

If the answer is “yes,” then a rule probably will be valid. For example, condominium declarations for multi-story buildings often clearly state that boards may by rule implement guidelines requiring sufficiently sound-absorbent floor coverings. If this type of express language appears in the declaration, a properly-adopted, reasonable rule relating to floor coverings would be enforceable.

What is the scope of the association’s rulemaking authority in general?

Subsection 18.4(h) of the Illinois Condominium Property Act provides that the purpose of condominium rules and regulations is to cover the details of the operation and use of the property. Meanwhile, non-condominium common interest community associations and master associations must consider the scope of rulemaking authority conferred by their governing documents. Some governing documents for non-condominium associations expressly empower boards to adopt rules regulating the use and operation of individually-owned lots, while other governing documents only discuss the adoption of rules relating to the common areas. In the 2013 court decision Ripsch v. Goose Lake Association, the Illinois Appellate Court (Third District) held that a common interest community association had the implied, inherent authority to adopt rules regulating the use of common areas, even though the covenants did not expressly grant such rulemaking authority.

Does the proposed rule restrict basic use and occupancy rights? 

As a general matter, restrictions upon the use and occupancy of, or behavior within, individually-owned units or lots are best implemented by amending an association’s declaration and bylaws, rather than through the rulemaking process. Under a well-established body of case law in Illinois and other states, such restrictions contained in recorded covenants will be granted greater deference by a court and generally should not to be subject to a judicial inquiry as to their reasonableness, but a restriction established by rule can be invalidated if a court deems the restriction to be unreasonable.