Rule or Policy, what’s the diff?

L.R. writes:

Dear Paul,

Would you please be good enough to explain the difference between a “rule” and a “policy” and how each is established, carried out and monitored in a condominium.  Keep up the excellent work.

Paul replies:

Dear L. R.:

As in most of society, there is a pecking order of importance. In the condo world probably the most important is the hierarchy of documents and how they are created and changed.

At the very top of the list are the laws that governs the creation of a condo development. In most jurisdictions it is known as the Condominium Act. It is brought into existence by legislators (politicians) and can only be changed by an act of the respective legislature.

Next in line is the Declaration created by the developer of the condo project before the existence of a condo corporation and describes the project and its intended use. It also includes the percentage ownership share of the common elements assigned to each unit. Third, are the Bylaws that are originally put into place by the developer. The bylaws describe how the community will be governed. It provides the process for electing the board, holding an annual general meeting and the responsibilities of the board and the unit owners.

Normally, the board will propose changes to the Declaration and the Bylaws, but the changes  must be approved by the unit owners during the Annual General Meeting or a Special Meeting called for that purpose. The Declaration will require a greater approval percentage of the ownership than will the Bylaws. For example, amendments to the Declaration may require written approval from 80% of unit owners while changes to the Bylaws might need a 75% affirmative vote from owners present at a meeting of owners called for that purpose. You must review your governing documents to determine the details applicable to your corporation.   

Rules should consist of a clear set of directives that must be followed. If Rules are not followed there could be consequences. Rules document what to do and what not to do. As with the Declaration and the Bylaws, Rules must be enforced by the Board.

According to the Manitoba Condominium Act, Rules must be oriented towards specific purposes listed in the Act.

169(1) A condominium corporation may, by resolution of the board, make, amend or repeal rules respecting the use of the common elements and units to

(a) promote the safety, security or welfare of the unit owners, tenants and other occupants;

(b) promote the security of the common elements, units and common assets;

(c) prevent unreasonable interference with the use of the common elements, units or common assets;

(d) maintain the aesthetic appeal of the property; and

(e) promote the fair distribution of services and amenities and the use of facilities.

As long as it can justify that it meets the requirements of section 169(1), a board is free to create, change or get rid of a Rule provided it notifies unit owners of the proposed action. Unless 25% of the owners request a special meeting to discuss the proposed Rule within 30 days following the notice, it will become effective on the 31st day following the notice. As you can appreciate It might be easier for a board to establish a rule than to amend the bylaws. Rules could deal with the installation of surveillance cameras, BBQing on balconies, requiring pets to be on a leash at all times.

Policies are usually of an administrative nature and the board can establish such policies without unit owner approval. Policies may describe HOW things get done. They can be considered more as guidelines to be followed by management. These are at the bottom of the pecking order and can be changed by the board to suit the needs of the corporation. Examples might include: the duties of a caretaker, the use of the party room, what can be posted on a bulletin board, how often the HVAC unit will be serviced, or the roof will be inspected. Policies should make managing the operation more consistent and predictable.

Note: Do not be surprised if the terms “Rules” and “Policies” are used interchangeably. Most people do not know the difference. As a rule of thumb, you can consider Rules as the “What” and Policies as the “How”.

This Post Has One Comment

  1. Louisa Ryz

    Excellent reply – informative, to the point and very helpful. Thank you very much.

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