When is a Family a “Family”?

One of the issues that HOAs are facing with increasing frequency in light of the current economic climate is the complaint that too many people are living in a particular unit. This often comes with complaints about noise, and the hot button: parking. The question is, what can an HOA do when it receives such a complaint?

familyOne of the issues that many Associations are facing with increasing frequency, is the complaint that too many people are living in a particular unit. This often comes with complaints about noise, as well as the hot button: parking. The question is, what can an HOA do when it receives such a complaint?

Long ago, the California Supreme Court invalidated a numerical occupancy limitation which invaded the constitutional right of privacy of the owner and tenants. Similarly, a California Appellate court has held that an occupancy restriction limiting the number of persons over 18 who could live in non-owner occupied residences in particular areas of the city violated the equal protection clause because the ordinance irrationally distinguished between owner and non-owner occupied residences. Although these cases dealt with zoning ordinances and not covenants, similar reasoning applies to covenants that unreasonably discriminate against tenants.

In Colony Hill v. Ghamaty, the court recognized that use and occupancy restrictions are an inherent part of any common interest development and are crucial to the stable, planned environment of any shared ownership arrangements. Unless a homeowner association’s practice with regard to the occupancy and use of its members’ units violates federal and state anti-discrimination limitations, the association is given a great deal of latitude in regulating the use of residential units in its development. For example, in Colony Hill, the covenants and restrictions prohibited any use of the residential units for purposes other than single-family dwelling. The homeowner’s association successfully defended its enforcement of the restrictions when one of its homeowners engaged in serial rentals of rooms in his unit to multiple renters. In upholding the restrictions, the court held that the association’s use restrictions were not unreasonable, and therefore were enforceable.

Colony Hill was decided based upon the definition of the word “family”. The Colony Hill definition of “family” did not contain any numerical limitations. Rather, a “family” was defined as any “unrelated persons who jointly occupy and have equal access to all areas of a dwelling unit and who function together as an integrated economic unit.” In ruling in favor of the association, the court held that promoting family style living was a stated goal that could be achieved by redefining “family” to specify “a concept substantially related to the legitimate aim of maintaining a family style of living.” This was achieved by defining “family” to include unrelated individuals who “function together as an integrated economic unit.” While the court ultimately found that the renters in Colony Hill did not constitute an “integrated economic unit,” their  determination required a discussion of the unique factual circumstances of the case. Therefore, in order to determine whether renters in an HOA are in violation of the single “family” residence provisions of the CC&Rs, an investigation is required into the particular facts of each specific case in order to determine if the occupants of the residence are either related, or maintain a common household.

Because an Association has the obligation to enforce its CC&Rs, it must determine whether enforcement action against any Owner accused of leasing their residence is warranted and appropriate. In California, making such a determination requires evidence that the occupants of the residence are not functioning as a “common household.” It is not clear what exactly the term means, and how the association would establish that fact. In Colony Hill, this was accomplished by introducing evidence that the residents each entered into separate leases and had different lease terms. However, an association typically has limited investigative ability prior to filing a lawsuit. In such cases, the local city may provide some limited assistance. Often times a city will investigate complaints regarding rental units. However, generally a city will only cite owners who are renting to more than five people who are not related or operating as a common household. The five person threshold is based on what the building code defines as a boarding house. If the city determines that a residence is being used as a boarding house, they will require the owner to obtain the proper permits, provide on-site parking, and come into compliance with any other requirements the city has on boarding houses. It is often impossible for the owner to comply with all the requirements, and in such cases the city code enforcement may prove to be an effective alternative to attempting to enforce the associations’ CC&Rs.

One additional tool that can help in providing the Board with information in such cases is if the association has a enacted a rule which requires all owners to provide the association with any leases relating to residences within the association, and that all leases require the tenant to acknowledge that all tenants are jointly and severally liable for any violations of the CC&Rs. This may have the effect of dissuading individuals who are not acting as part of a common household from entering into such leases as they will be responsible for the acts of their housemates. In addition, it will provide the association with an additional ground to sanction the owner if they fail to comply with the rule; violation of the rule would be easier to establish since all that would be required is that the owner failed to provide copies of the leases.

While there is no easy answer to the issue of occupancy restrictions, associations should know what tools they have available to provide as much information as possible in order to allow the Board to make an educated decision on enforcement of the CC&Rs.

California HOAs can be notified when bank Forecloses on a Property

One of the issues many homeowners associations are dealing with in light of the recent rise in foreclosure is not knowing when a bank takes over ownership of a property following foreclosure. Without this information, associations often go months without knowing who is liable for the payment of monthly assessments, and where to send monthly assessment bills.

The California legislature provided some limited assistance to California homeowners associations earlier this year . . .

One of the issues many homeowners associations are dealing with in light of the recent rise in foreclosure is not knowing when a bank takes over ownership of a property following foreclosure.  Without this information, associations often go months without knowing who is liable for the payment of monthly assessments, and where to send monthly assessment bills.

The California legislature provided some limited assistance to California homeowners associations earlier this year when it amended Civil Code Section 2924b(f) to permit homeowners associations in California to record a document requesting a copy of a Trustee’s Deed Upon Sale recorded by anyone authorized to record a Notice of Default against real property. Once an HOA records the request, a lender is supposed to provide notice to the address contained in the request within 15 days after recording the deed.

While an association that files the proper form may receive earlier of a bank having taken over a property, unfortunately no penalties for not providing the required notice to the association. Nevertheless, homeowners associations in California should avial themselves of this relatively cost effective option to improve the likelihood they will receive timely notice when a bank takes over a property within the development.

California Bill Which Would Void CC&Rs Gathers Steam

Assembly Bill 1061 bill sailed through its first test Tuesday with unanimous approval from the Assembly Water, Parks and Wildlife Committee. Under the bill, homeowner association rules would be “void and unenforceable” if they restrict compliance with local landscaping ordinances or conservation measures.

low-water-landscapeAssembly Bill 1061 bill sailed through its first test Tuesday with unanimous approval from the Assembly Water, Parks and Wildlife Committee. Under the bill (previously covered here), homeowner association rules would be “void and unenforceable” if they restrict compliance with local landscaping ordinances or conservation measures.

While the goals of the bill may be admirable, it is written so broadly it could disrupt homeowner groups’ authority to review an individual homeowner’s landscaping plans that spell out the type, number and placement of plants.

Many people chose to live in developments with association rules because they like the appearance of common landscaping, architectural design and colors.  While the state may have an interest in conservation, it is hoped that the legislature will amend the bill to need to protect the interests of homeowners who purchase in a common interest development because they like the fact that the uniform rules help preserve property values, and improve the general appearance of a community.

I still suspect that the bill is largely unnecessary and disputes over the installation of drought tolerant plants are rare.  I would love to hear if anyone has been involved or is aware of such disputes within their association.

Proposed California Bill Lets Water Agency Trump Homeowners Association Rules

California’s AB 1061, introduced on February 27 by Assemblyman Ted Lieu would repeal a portion of the Davis-Stirling Act as it relates to water efficient plants.

landscaping-with-drought-tolerant-plants-2California’s AB 1061, introduced on February 27 by Assemblyman Ted Lieu would repeal a portion of the Davis-Stirling Act as it relates to water efficient plants.  Currently, the Davis-Stirling Act provides that the architectural guidelines of a common interest development shall not prohibit or include conditions that have the effect of prohibiting the use of low water-using plants as a group.  AB 1061 would enforce a model conservation ordinance that state officials plan to complete next year. Local water districts would be able to use the model ordinance as a blueprint for their own conservation rules.  As long as the water districts obey the model ordinance guidelines, anything in the rules of a community association development that conflicts with local water district’s regulations or restrictions would be “void and unenforceable.”

Water wholesaler Metropolitan Water District is sponsoring the legislation claiming the bill clarifies how homeowners can install water-efficient landscaping without running afoul of association rules. With California in a drought and rationing under way or looming in many districts, the agency claims it is looking for any way to stretch out its supplies. However, one has to wonder whether the bill is even necessary since there have only been isolated instances of conflicts between homeowner members eager to save water and associations that outlawed particular types of water-efficient landscaping.

Nevada Bill Limits Restrictions on Solar Energy Systems

The Nevada Senate voted Monday for an alternative energy bill that would limit a homeowner association’s ability to restrict the installation and use of solar energy systems.

Solar Energy System

The Nevada Senate voted Monday for an alternative energy bill that would limit a homeowner association’s ability to restrict the installation and use of solar energy systems.

Sen. Mike Schneider, author of SB 114, says the bill strengthens existing laws that already prohibit homeowner associations from interfering with installation of solar energy systems. Currently, a homeowners’ association in Nevada can impose restrictions that, while not prohibiting solar energy systems, could make them so much more costly and so much less efficient that the restrictions effectively act as a prohibition.

Under the bill, the director of the Nevada Office of Energy would have final say as to whether a restriction imposed by a homeowner association violates the rights of a homeowner to use or install a solar energy system.

The proposed bill also deems any restrictions that reduce efficiency of solar energy systems by more than 10% to be unreasonable.

Coupled with California’s Climate Change Solutions Act, a clear trend is emerging requiring HOAs to focus more attention on all aspects of energy efficiency.