Written by Benny L. Kass
Question: My husband and I have recently retired, and are supplementing our income by giving music lessons in our home. Recently, the Board of Directors of our condominium association has advised us that our legal documents specifically state that our unit can only be used for residential purposes and that no business of any kind is permitted. However, we have confirmed that local law permits us to obtain a home-office permit and that we are not in violation of any laws. We do not teach any bands, and do not have concerts in our house. We only teach children — ages 7-15 — piano lessons. Does the association have the right to restrict our teaching?
Any discussion of the power of a Board of Directors must start with what we call the hierarchy — or priority — of rules. At the absolute top of the list is the state condominium or community association law. Next, there is the Declaration (for a Condominium Association) or the Covenants, Conditions and Restrictions (for a home owner association). The next level refers to the Bylaws of the Association, and finally, at the lowest level are the Rules and Regulations which have been promulgated by the Board of Directors.
Although State law carries the highest priority, to the extent that the community association documents do not conflict — and are more restrictive — than state law, the latter documents will be enforced.
Let me give you an example. Local zoning laws state that your property is located in a commercial zone. However, your association documents restrict use for residential purposes only. Since residential use is more restrictive than commercial, the association can prevent owners from using their homes for commercial purposes.
I call this a conflict between “public zoning” and “private zoning”. Thus, the fact that your local zoning law permits you to use your home for office purposes does not preclude your association from enforcing the more restrictive association rules.
When you buy into a community, you are generally required to abide by these rules and regulations, although Courts throughout this country are starting to look to whether such rules are reasonable. If a Judge determines that these rules are not reasonable, the rules will not be enforced.
Many people want assurances that the status quo will prevail in the neighborhood where they live. Many people want uniformity in their community, such as fences being the same height, and window curtains being the same color.
These operative documents are recorded among the land records where your property is located. They “run with the land”, which means they are binding on all home owners who are within the jurisdiction of the community association.
When there is a violation of these documents, the Board of Directors can take appropriate legal action to stop these infractions. The Board has a range of enforcement options, from issuing fines to filing a lawsuit asking the Court to enjoin the violator.
There are, of course, significant exceptions — and limitations — on the Board’s authority. For example, if a Board is not enforcing the rules on a uniform, consistent basis, a Court will probably not allow the Board to arbitrarily pick and chose when they can try to enforce their rules. Additionally, if the rules are vague — or do not contain appropriate guidelines and standards — Judges have refused to enforce these rules against alleged violators. Clearly, one must be able to understand the rules.
Indeed, in the Tax Reform Act of l997, Congress overturned a United States Supreme Court case, that had previously imposed limitations on the tax deductibility of home offices. In a case known as Soliman, a doctor attempted to deduct his home office, since this was the place where he did all his bookkeeping, his research and made his appointment.
However, the high Court rejected Dr. Soliman’s deductions. The Court took the position that Dr. Soliman’s principal place of business was in the hospitals where Dr. Soliman practiced; that was where the primary income generating functions of his trade or business were performed.
Effective January l, l999, a new definition of “principal place of business” is in the Tax Code. A home office will qualify for tax deductions if the office is used by the taxpayer to conduct administrative or management activities of the taxpayer’s trade or business, and there is no other fixed location of the trade or business.
Thus, this law — plus modern technology — has created a clash with the restrictive community associations legal documents. Indeed, the Community Associations Institute (CAI) — a non-profit national organization created in l973 to educate and represent the nation’s 231,000 community associations — has urged its membership to reconsider home-based business bans.
According to CAI, approximately 100,000 home based businesses are established each month; by some estimates, as many as 40 million people work out of their homes.
In your case, you want to teach music in your home. Clearly, if you are giving Tuba or drum lessons, this may be disturbing to your neighbors. But since you are only giving piano lessons, I see no reason why you should not be allowed to do so.
Read your Association documents carefully; what exactly is the home-office prohibition. As indicated earlier, if the language is vague — or is discriminatory in that it allows some businesses but not others — you may have an argument that these restrictions should not be applied to you.
You should also talk to your neighbors to determine if they will object to your giving lessons. They may want to restrict you to certain hours of the day, which may be an acceptable compromise for you.
Finally, if your state, county or city issues “home occupancy permits”, I would make arrangements as soon as possible to get such a permit.
Then you should raise the issue with your Board of Directors. Ask them to poll the community, with the view of determining whether your legal documents should be amended — or at least not enforced as to certain violations.
Amending legal documents in a community association is possible, but it takes a lot of hard work. Mount a major campaign in your association to gather support from your neighbors. Treat your cause as if you were running for political office; appoint floor (or neighborhood) captains to canvass the neighbors, and obtain petitions and proxies so as to amend your association documents.
We are in the twenty-first century, but many community association documents were drafted even before computers became common. Community Associations must also keep up with technology.