So when you're asking "can they amend the rules", what you really mean is "Can the Board of Directors amend the rules that govern myself and the rest of the HOA".The short answer is "Of course, as that is one of the jobs that you and the rest of the HOA ask them to do."

@John-David HerlihyThe IRS rules state there may be no direct or indirect transactions or benefit between a plan and a disqualified party. 

I've served on the board of directors for 5 companies and I'm getting ready to start a new company with a national reach - which is the result of cultivating a relationship to the place where the funders sought me out.  

He put his wife on payroll as the CEO, his one son as media manager and the other as office director. 

@Claudio Romero if it happens again you should write a letter of complaint to the President of the HOA (or address it to the board of directors) and send a copy to the property management company.

The trouble is the variance.This town has a reputation for being stingy with them but I talked to their zoning director and he said that if there was ever a case that was likely to go through, this was the one.

If so, and they are unresponsive then complain directly (and politely) to the HOA board of directors and give them pictures.

@Jacke DraperRegardless of your age, you may not transact with your plan in any direct or indirect fashion. 

Since my post I had a conversation with the current tenant and the Director over his case manager.

I'm a Broker and Director COMMERCIAL Division of Tru REALTY.