New Neighborhoods–The Hierarchy of Laws

New Neighborhoods

By Gary A. Poliakoff and Ryan Poliakoff

The Hierarchy of Laws

Dear Poliakoffs,

When deciphering condominium documents and rules and regulations promulgated by the board, when the documents are out of synch – i.e., the articles and bylaws say different things, which document controls?  Signed, C.O.

Dear C.O.,

Great question, and one that confuses a lot of people.  Here’s how it works.

Our system in the United States is a system of laws, and as a natural result there has to be a hierarchy of which laws are the most important, and therefore trump other laws promulgated either by governments or created privately (such as covenants contained in contracts).  At the top of the legal food chain is always the supreme law of the land—the United States Constitution, and then the laws created by the federal government.  These include treaties, trade agreements and laws passed by the legislature.  Next would be state laws—the Constitution of the State of Florida and Florida statutes (such as sections 718 and 720, which govern condominiums and HOAs).  Below that are local laws and ordinances that were in effect at the time the condominium or HOA documents were recorded (assuming that those ordinances are not preempted by the laws above them).

The next level is the private, contractual laws; the declaration of condominium (or, in the case of an HOA, the covenants, conditions and restrictions), then the articles of incorporation, the bylaws, and last the rules and regulations.  Rules created by a board may not circumvent rights granted to unit owners by the documents that are of greater importance, and they certainly cannot violate any federal laws.  It’s also important to understand that, whether referenced or not, state statutes are considered to be engrafted onto the contract (the declaration itself, and all the related documents).

So here’s a practical example.  Let’s assume that a board of directors passes a law that states that no women may purchase a unit on the property (we’re intentionally choosing an extreme example).  To determine if that rule were valid (and ignoring the fact that rules must be reasonable, and this one certainly isn’t), you would first look at the association documents to see if there is a superior clause that controls.  Many documents do in fact have anti-discrimination language, but it’s not universal.  Next you would look to state law (the rule would almost certainly die at this step, as most states have their own gender protection laws), and if that didn’t prevent the rule you could go as high as the laws of the United States (and in this case equal protection would undoubtedly invalidate the regulation).

Now, as you asked, let’s assume that the board instead convinced the membership of the association to amend the bylaws to achieve the same discriminatory outcome.  You would again work your way up through the association documents, one by one.  Do the articles of incorporation say anything about this issue? Probably not—the articles of incorporation generally set up the actual entity that controls the property and talks about basics like how many board members must serve and when the annual meeting should be held.  The declaration, however, might very well contain a clause that the association may not discriminate against owners, and if so that would trump the bylaws, a lower document in the hierarchy.

Now, at the risk of confusing the issue even more, there is a question as to whether statutory amendments passed after the condominium and HOA documents were recorded apply to the association.  The answer to that question depends on whether the statutory amendments are procedural (affecting simply how laws are carried out) or substantive (an actual change to rights or regulations).  The Constitution prohibits states from passing laws that impair existing contract rights.  So, for example, one could debate whether a state law that prohibits an association from restricting leasing of units would be applicable.  If the no-leasing provision was in the declaration before the legislature passed its law, then the change is arguably an impairment of contract (with the contract being the actual declaration of condominium).  Some documents contain language that affirms that they are automatically modified by all legislative amendments.  Lawyers refer to such clauses as “Kaufman” language, after the case that stated that if such a provision is contained within the document, then legislative changes do not impair the existing documents because applying these changes is strictly an interpretation of the document.  Told you it was confusing!  Unfortunately, the law isn’t easy, and that’s why having good counsel is critically important to every association.

Gary A. Poliakoff and Ryan Poliakoff are co-authors of New Neighborhoods—The Consumer’s Guide to Condominium, Co-Op and HOA Living.  Gary Poliakoff is a founding principal of Becker & Poliakoff, P.A., and Ryan Poliakoff is a senior counsel at Sachs Sax Caplan P.L.  Email questions to condocolumn@gmail.com.  Please be sure to include your hometown.

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