In a nutshell: the association declaration and state law.
Community associations have a governmental component. Like a city or county government, a community association has a charter—called the declaration. The declaration encompasses bylaws, covenants and other documents that give community associations their legal foundation.
These governing documents obligate the association to preserve and protect the assets of the community. To enable the board to meet this obligation, association governing documents also empower the board to make rules and define the process for adopting and enforcing them—within limits. Governing documents also establish parameters for the nature and type of rules the board can make.
State law gives associations the authority to make rules. These are called common interest community statutes, and they apply to condominiums, cooperatives, and property owners associations.
Remember, however, that the board can’t make or enforce any rule that is contrary to the governing documents, local ordinances, state law or federal regulations. Remember also that the board make rules on your behalf—to protect your investment, your home.