Civil Code Section 4360 sets forth a specific procedure that a board must follow when seeking to adopt or amend an association’s operating rules (to perform a “rule change”). That procedure includes the following primary requirements:
- Notice of Proposed Rule Change – the board must provide general notice pursuant to Civil Code Section 4045 of a proposed rule change at least thirty (30) days before making the rule change. The notice must include (1) the text of the proposed rule change, and (2) a description of the purpose and effect of the proposed rule change. This notice is not required where “the board determines that an immediate rule change is necessary to address an imminent threat to public health or safety or imminent risk of substantial economic loss to the association.” (Civ. Code § 4360(a).)
- Decision Made at Board Meeting – the board’s decision on whether to adopt or amend an operating rule must be made at a board meeting “after consideration of any comments made by association members.” (Civ. Code § 4360(b).) The proposed rule adoption or amendment must have been listed as an agenda item for that meeting in order for the board to discuss or vote on it at the meeting. (Civ. Code § 4930(a); See also “Board Meeting Agenda Requirements.”)
- Notice After Making Rule Change – after the board makes a decision to adopt or amend an operating rule, the board must, “as soon as possible…but not more than 15 days after making the rule change,” deliver general notice pursuant to Civil Code Section 4045 of the rule change. (Civ. Code § 4360(b).)
Board Actions Which do not Constitute “Operating Rules”
Civil Code Section 4355(b) exempts the following board actions from the procedural requirements applicable to adopting, amending or repealing operating rules.
- A decision regarding the maintenance of the common area;
- A decision on a specific matter that is not intended to apply generally;
- A decision setting the amount of a regular or special assessment;
- A rule change that is required by law, if the board has no discretion as to the substantive effect of the rule change; or
- Issuance of a document that merely repeats existing law or the governing documents.
Emergency Rule Change
If the board determines “that an immediate rule change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association, it may make an emergency rule change, and no notice is required as specified in [Civ. Code § 4360(a)].” (Civ. Code § 4360(d).) The emergency rule change is effective for one hundred and twenty (120) days, unless the rule change provides for a shorter effective period. (Civ. Code § 4360(d).)
Membership Veto of Rule Change
An association’s membership has limited rights to veto recently adopted or amended operating rules. (See “Veto of Rule Change by Members.”)