Who sets the rules for trailer park association, residents or the city?

We have a trailer park condo association of 144 units. It's self managed by elected officers. We own our own land/unit. Most unit owners go by the rules of the "city" for improvements. Jan. 2012, the city just allowed sheds to be constructed 3 ft. from side property lot lines. One unit owner constructed a shed using the new variation set forth by the city. The condo association is threatening to sue the owner and have him tear it down. In the association rules it has the old set-backs as their guidelines. Can they fine, sue, or force the owner to tear down the shed. The city gave him a permit and the city signed off on final inspection. The association has been know to use "selective enforcement".