33. Is the new rule enforceable against the owner?

Common-interest communities, also known as common-interest developments or «CIDs,» include condominiums, co-ops, retirement communities, vacation timeshares, and other housing developments comprised of individually owned units, in addition to shared facilities and common areas. CIDs are usually created through legal documents drafted by the developer, which may change according to the community's needs. Typically, these types of communities are governed by an association made up of individual unit owners, most often through an elected board.

There is a distinction between (1) association-imposed rules that are contained in the deeds or declaration of the CIDs and (2) rules subsequently adopted by property owner associations for community government.

As to the latter category, regulations adopted by an association and not contained in governing documents, courts apply a «reasonableness» standard. Determining reasonableness requires balancing the utility of the purpose served by the restraint against the harm that is likely to flow from its enforcement. For rules not contained in governing documents, they will typically be considered reasonable if their purpose is to protect common property. See Restatement (Third) of Property: Servitudes 6.7(1)(b), stating that an association board has an «implied power to adopt reasonable rules to. .. govern the use of individually owned property to protect the common property.»

D is correct. Unless authorized by the governing document, a CID association may not impose an unreasonable restriction on the structures or landscaping that it places on individually owned property or on design, materials, colors, or plants that may be used.

In this case, the governing documents are silent as to the board's ability to impose design control restrictions, and there is no indication that the rule is to protect the common property (e.g., that maple trees cause damage to commonly-owned structures). Therefore, in balancing the utility of the purpose (aesthetic) against the harm likely to flow from its enforcement (preventing owners from being able to plant certain trees), the board will not be able to enforce the oak tree rule against the owner.

A is incorrect. Generally, a community does have the power to adopt rules to govern the use of common property and the use of an individually owned property to protect the common property. However, when an association adopts a new rule that is unreasonable, meaning its utility is outweighed by the harm and imposition on individual owners, it will not be enforceable. Here, the association's only reason for the rule requiring oak trees is aesthetic, with no indication that it will protect common property.

B is incorrect. This is the standard for restrictions imposed by the declaration. Restrictions in the declaration (i.e., the recorded document that imposes the covenants and easements creating a common-interest ownership community) are valid unless illegal, unconstitutional, or against public policy. Here, however, the rule not contained in the association documents may only be enforceable if it is reasonable (the correct standard). As explained above, this rule allowing only oak trees to be planted by individual owners is unreasonable.

C is incorrect. This is the correct conclusion, but incorrect legal reasoning. It is incorrect that all association rules must be included in the governing documents. Rules not delineated in governing documents may be enforceable if they pass a «reasonableness» standard, balancing the utility of the purpose of the rule against the harm that it is likely to cause. Here, the rule is unreasonable because it serves only an aesthetic purpose and restricts owners from making landscaping decisions on their individually owned lots.