A recent New York Court dealt with an issue on leasing (Olszewski v. Cannon Point Association, Inc., 148 A.D.3d 1306 (2017)).  The Board adopted rules and regulations that placed restrictions on leasing that contradicted relevant portions of the Association’s Bylaws.  The Association then fined the owner for violating these restrictions and the owner sued.  The owner won at the circuit court level and the Association appealed.  On appeal, the Court again ruled in favor of the owner, upholding the trial court’s decision.  Why?

The Bylaws stated in relevant part that: “any home may be conveyed or leased by its … owner free of any restrictions” provided the owner is current with his assessments. Even though the Bylaws gave the Board the authority to pass rules and regulations as they saw fit, it did not give the Board the authority to contradict a provision already in the Bylaws.

Associations need to be aware of the priority given to each of the governing documents and to make sure these documents work together in order to avoid situations like this New York case. The small amount it will cost to have that review done at the front end could save your Association thousands of  dollars later on.