Rule Making (Oregon Law)

One of the powers granted to Board of Directors in Associations is rule making.  There are few things all board should be aware about this power, and what it means and does.

First, rulemaking ability doesn’t allow the Board to pass any rule.  The authority to pass any rule must come from the documents.  I always advise clients to consult an attorney before making a rule, to make sure the Association has the power to regulate that action.

Second, the power only extends to certain areas.   Some powers are reserved for the Association, some are governed by other laws.  For instance, Board’s cannot create a rental restriction by a rule.  In fact,  75% of the Association must vote for a rental restriction for it to be valid.  However, if there is already a rental restriction in place, the Board may develop rules regarding the procedure of approval rental applications and a waiting list.  Federal law may also impose limitations on a Board’s ability to make rules, such as the Flag Act and the Over-the-Air Reception Devices (OTARD) rule.  Before making a rule, check with an attorney to make sure the Board has the power to pass the rule.

For clarification, when I speak I often use the term resolution.  Resolution is a vehicle to pass a rule.  Most of the time it is a written document which outlines where the authority for the rule comes from, what the rule is, the date it was passed, and signed by the member of the Board.  Before a rule is effective, the resolution or rule must then be distributed to all owners, so they know what the rule is, and can comply.

Finally, rules must be passed at a property noticed open board meeting.  The meeting must be noticed at least 72 hours before the meeting, and must be open to all members of the Association.  The Board must vote on the resolution, and the threshold of Board members must vote for the rule, as required by your governing documents.  Once this is all done, remember to mail, or distribute by other means,  the resolution to all owners, and then the rule may be enforced.

Rules are important for every association to run smoothly, but it’s also important a Board understand if they have the power to pass a rule, and how to do so within the state statutes.