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POLICIES & PROCEDURES

Operating Rule, Regulation, Procedure, Policy, Standard, or Guideline?

The terms “policy” and "guideline" are not defined in the Davis-Stirling Act. Rather, as defined below, all general regulations, whether characterized as a regulation, procedure, policy, standard, guideline or rule are “operating rules.” And while some operating rules which do not require the 28-day member review process are characterized in the industry as policies, procedures or some other similar title, do not lose sight of the fact that they are still operating rules.

Definition of Operating Rule

Civil Code §4340(a) defines “a regulation adopted by the board that applies generally to the management and operation of the common interest development or the conduct of the business and affairs of the association as an “operating rule.” Further, every operating rule must meet all the requirements of Civil Code §4350, one of which is that the operating rule must be in writing.

Adoption of Operating Rules

Every operating rule must be adopted, amended or repealed by the Board at a duly noticed open Board meeting. All Board actions, including adopting, amending or repealing operating rules, must be done at a properly noticed Board meeting, as provided by Civil Code §4910(a): “The board shall not take action on any item of business outside of a board meeting.” Many operating rules may be adopted, amended or repealed, by simply putting the proposed operating rule on the agenda of a duly noticed open Board meeting and voting to take the desired action at said meeting. Other operating rules require the additional step of allowing member review.

28-Day Member Review Requirement

In addition to all other requirements, some categories of operating rules require a 28-day advanced notice, member review period and comments all as described in Civil Code §4360. The only categories of operating rules requiring this special procedure are described in Civil Code §4355(a) and include broad categories such as “use of the common area or of any exclusive use common area” and narrow categories such as “procedures for elections” (election rules). Note that the section itself characterizes operating rules as including certain “standards,” “schedules,” and “procedures” emphasizing that the substance of the operating rule, rather than how it is labeled, determines whether the additional procedure applies. Also Civil Code §4355(b) lists Board actions specifically excluded from the 28-day process.

Reversing a Rule Change

Any operating rule change (adoption, amendment or repeal) that required the 28-day process for adoption is subject to the right of the membership to reverse the operating rule using the procedure stated in Civil Code §4365. A reversed operating rule change may not be readopted for one year from the date of the reversal.

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