Covenant vs rule

Two documents, two different jobs

A covenant lives in the declaration, recorded against every lot when the community was created. It runs with the land, which means it binds each owner exactly as if they had personally signed it, even though they never did. A rule lives somewhere else entirely: the board adopts it later, without a vote of every owner, to handle day to day matters the declaration never addressed.

Practitioners describe this as a three tier structure: the declaration creates restrictions that bind every owner, the bylaws govern how the association's corporation itself runs, and rules and regulations fill in operating details, parking, pool hours, leashed pets, that the other two documents leave open.

A covenant is hard to undo

Courts treat a declaration restriction as a servitude attached permanently to the land. It carries a strong presumption of validity, and a challenger has to clear a genuinely high bar to defeat it.

"[A restriction will be enforced] unless it violates public policy; it bears no rational relationship to the protection, preservation, operation or purpose of the affected land; or it otherwise imposes burdens on the affected land that are so disproportionate to the restriction's beneficial effects that the restriction should not be enforced."

Source: Nahrstedt v. Lakeside Village Condominium Assn., Supreme Court of California

Whether your state's courts apply this exact three part test to declaration restrictions varies; some states phrase it differently or add their own wrinkle. Check how your own state's courts have handled a challenge to a CC&R restriction.

A rule has to earn its validity every time

A board adopted rule does not get that same presumption. Courts built a separate, less deferential test specifically to keep the board's discretion in check.

"[An association] is not at liberty to adopt arbitrary or capricious rules bearing no relationship to the health, happiness and enjoyment of life of the various unit owners."

Source: Hidden Harbour Estates, Inc. v. Norman, Florida District Court of Appeal

Owner approval by a vote does not settle the question either. A rule can be adopted by a wide margin and still fail the reasonableness test if it has no real connection to owner welfare.

A rule cannot reach where the board has no authority

Before a board asks whether a rule is reasonable, it has to answer a prior question: does it have the authority to regulate this topic at all? Rulemaking power is delegated by the declaration, bylaws, or state statute, it is not automatic.

"Except to the extent provided by statute or authorized by the declaration, a common interest community may not impose restrictions on the structures or landscaping that may be placed on individually owned property, or on the design, materials, colors, or plants that may be used."

Source: Restatement (Third) of Property: Servitudes (as quoted in Moretto v. Elk Point Country Club Homeowners Association), American Law Institute

Exactly what counts as a specific grant of authority in your declaration or state statute varies. Read your declaration's rulemaking clause before assuming the board can regulate a given topic just because it seems sensible.