When you live in or plan on purchasing a condominium or home in a suburban community or Planned Unit Development (PUD), you know you will probably be a Homeowners’ Association (HOA) member. These places are popular because of their availability, affordability, and numerous amenities like private streets, pools, security guards, playgrounds, and fitness centers for all their members. HOA has covenants, restrictions, rules, bylaws, conditions, and regulations that members must abide by to maintain these amenities and protect home values.
As a California homeowner or potential buyer, you should understand your rights and obligations as an HOA member to improve your acceptance chances in the association. Abiding by these rules can be the source of conflict between you, the association, or your neighbor, so you should consult a real estate lawyer. At the Los Angeles Business & Real Estate Law Firm, we have highlighted homeowners’ association law to make sense of regulations in your planned development or the community you hope to live in and navigate issues surrounding PUDs.
Overview of Homeowners’ Associations
HOAs are governing entities that create and enforce laws on housing and condominiums. Planned developments adopt regulations and implement them through the HOA to maintain uniformity. The rules ensure uniformity, keep the neighborhood attractive, and maintain property value. For instance, the association decides the height of buildings and the color of houses.
Also, the body manages the funds used to maintain common areas like the pool, fitness facility, and pavements. As a homeowner, you must pay monthly fees to the association to keep the account open for capital-intensive projects or emergencies.
In California, the Davis Stirling Common Interest Development (CID) Act, otherwise known as the Davis Stirling Act, governs HOAs. The Larry Stirling-authored legislation was first enacted by the California legislature in 1985. It was intended to give extra power to housing developments to assist them in maintaining and enhancing neighborhoods without requiring government funding. The Act provides rules on establishing and maintaining a community association, the rights and obligations of members, fee collection, repairs and maintenance, and dispute resolution.
In 2012, Assembly Bill (805) restructured and codified the Davis Act. In January 2014, Title Six was annulled and replaced with the California Civil Code (CIV), starting with Section 4000. With the Act, a CID developer can form an HOA, after which they record the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) against the neighborhood with the Los Angeles County government. The CC&Rs are the association’s constitution and enable it to function like a government entity, although it is not one.
HOAs are managed by a board of elected community members. The board enacts rules and regulations, which residents must abide by if they are consistent with the CC&Rs and state laws.
Generally, the CID Act oversees establishing and developing new common interest areas and creating and operating HOAs, condominiums, cooperatives, community apartments, and other DUPs. Besides, the Act sets rules on:
- Board elections
- Property lien transfers
- HOA and board conferences
- Budgeting and evaluation
- Association reporting
- Record keeping
The ACT empowers the board to take several actions for the community, put restrictions on the board, and protect homeowners’ rights.
At the Los Angeles Business & Real Estate Law Firm, we have highlighted the chapters of the Act to help you understand your legal rights and obligations as an association member.
Condominium Associations
According to CIV 4285 to 4295 and 4610 to 4630, condominium associations, like HOAs, are overseen under the Stirling CID Act. The regulations provided by the Act focus on condos and HOAs but also provide specific information on condos, like designing, recording, and changing condominium designs and restrictions on condo interest divisibility.
Cooperative Associations
The civil code also administers cooperatives, or stock cooperatives, starting in Section 4000. As per CIV 4190(a), a cooperative is an organization founded primarily to own real property and for the cooperative members to have special occupancy rights of the cooperative association property. Therefore, if you are a stockholder in a suburban stock cooperative, you will be treated like you have individual property rights, just like HOA and condominium association members.
Corporate Governance of the Association
Creating an HOA body requires the development of a constitution or governing document. The document is composed of CC&Rs, incorporation articles, and bylaws.
In CIV 4080, any association operating a CID can be established as a non-profit or an incorporated association. If it takes the incorporated association route, CIV 4280 requires filing an incorporation article with the state secretary.
California Corporations Code 7140 grants community associations the non-profit common benefit, whether incorporated or unincorporated. An association can adopt and change its bylaws, levy fees, and sign contracts in this code.
Primarily, the Act provides more detailed coverage of the state HOA laws. Still, an association can bring up the Corporations Code if the latter does not explicitly address corporate governance, mainly for non-profit organizations and nonprofit mutual benefit associations.
Property Use Restrictions
The most crucial provisions of the Davis Stirling Act are the restrictions on the authority of an association to restrict property use and access by homeowners. Typically, homeowners’ association and condominium statutes are private agreements enforced to the letter. Still, the legislature acknowledges that specific general guidelines or rights are critical enough to be protected by laws. The restrictions are:
Rental Restrictions or Limitations
Courts nationwide have sustained HOA rental limitations if the association has valid reasons for the restrictions. Nevertheless, renting the house makes up a significant part of the property’s value for a homeowner. Also, restricting property owners from generating rental earnings amounts to denying them a crucial right to a home.
The legislature adopted CIV 4740(a), (b) permitting associations to enforce existing rental restrictions and, at the same time, grandfathering the rental rights to owners who held titles to the property before the adoption of the rental rules, to find a balance between competing communal interests and the rights of homeowners.
Nevertheless, reasonable limitations are enforceable even if your interests existed before implementing the HOA rules,
Also, CIV 4525(a)(9) gives new property buyers the right to be notified of rental limitations. This should happen before the execution of a sale agreement or title deed transfer so that they do not discover when it is too late that the property they have purchased has rental restrictions.
Commercial Use Restraints
HOAs can impose reasonable restraints regarding the commercialization of residential property. These restrictions are enforceable by HOAs nationwide, with zoning ordinances in place to restrict the commercial utilization of residential property.
However, AirBnB sometimes implicates community restrictions against commercialization even when the rental is not in violation of the zoning ordinance.
Letting the property in the short term can bring unique burdens to the association. The courts recognize this, which is why they have allowed limitations on these rentals when it is clear the restrictions are unenforceable under CIV 4740.
The notion behind the court’s decision is that restraints on letting residential properties for a short term are rules and not prohibitions. Therefore, leasing the residential property briefly is a reasonable exercise of the HOA’s authority.
Street Parking and Hauling
According to California Civil Code 5975, HOAs and condo associations can ratify restrictions if there is a genuine reason for enacting them, like protecting the community’s beauty and accessibility.
HOAs regulate the use of common areas and can regulate parking on private streets and parking lots. Additionally, they can restrict the number of cars a member can park on private streets or allocate parking spaces for homes.
It will help if you understand that the HOA cannot limit the number of vehicles parked in a public lane. Nevertheless, the association can limit members’ activities within the planned development. California statutes do not clearly define “public street parking,” although HOAs can enforce reasonable restrictions on public street parking on their members.
Under exceptional circumstances, California Vehicle Code 22658 allows associations to tow cars inappropriately parked within the planned development. However, the association must comply with the code’s requirement for a no-parking sign. The requirements are:
- The poster should be displayed in plain view
- The car owner must be notified of a parking violation for a minimum of four days before the hauling
- The car should be inoperable
- The car should be parked on a private street or parcel of a single-family unit.
The HOA’s request to tow a car must be approved, and the car owner must be served with a towing notice.
Religious Symbols
The Davis Stirling Act recognizes that association members can display religious symbols on their units’ doorsteps. Nevertheless, the sign must be motivated by religious beliefs per California CC 4706.
The only exception is when the displayed religious symbol threatens the safety and public health, violates the law, obstructs doors, includes obscene pictures or language, or is more extensive than 3’ by 1’. Under these circumstances, the association can pull down the display for repairs or modifications even if it is protected.
Political Signs
In the case of PruneYard Shopping Center vs. Robins, the Supreme Court held that even though the First Amendment rights do not apply to private transactions. Individual states have the right to embrace their constitution’s rights more expansively than the ones provided in the Federal Constitution. As a result, the Common Interest Act by Davis Stirling explicitly provides association members the right to participate in political undertakings.
California HOA or condo association members cannot be barred from peaceful political assemblies or inviting political officials or nominees to talk to or canvas the gated community. This is according to CIV 4515(b).
The Stirling Act does not unequivocally handle the issue of political signs, although CIV 4710 prohibits HOAs from restricting members from putting up noncommercial signs, including political symbols. An association cannot ban its members from exhibiting noncommercial signs like posters, banners, or flags. The only restrictions the HOA can impose are size, place, and material restrictions. Therefore, it will be prohibited if your noncommercial sign is made of paving material, lighting, flora, siding, or roofing. Additionally, the association will forbid a sign if it exceeds nine square feet, contravenes the relevant statute, or is a potential public health hazard.
Display of the United States of America Flag
California civil code 4705 prohibits HOAs from limiting the parade of the U.S. flag. The law further clarifies that it only protects the exhibition of the actual American flag in a window or on a flagpole. Nevertheless, it forbids association members from exhibiting depictions of the American flag not made of paper, fabric, or cloth.
Unlike the national law, California’s flag protection statute does not have reasonable limitations on the time, manner, and place of displaying the flag. Also, the California state flag is not included in the protections.
Architectural Restrictions
The Davis Stirling Act covers specific architectural changes on a property owner’s unit. Under CIV 4725, implements like satellite dishes no larger than 36 inches or TV antennas not easily visible from shared areas are open to reasonable rules without the devices’ high cost or efficacy implications.
If the system you are installing complies with CIV 714, 4725, an association cannot enforce reasonable limitations on solar power systems or electric car charging stations. However, they are allowed if these restrictions do not impact the system’s cost, efficacy, or performance. The HOA can require you to inform your neighbors of the installation and possess liability insurance in case of a mishap.
Records Inspections
Most HOAs allow members to demand and inspect their records. Under CIV 5120, HOAs must maintain documents for the current financial year and the two previous financial years. Also, minutes of board and association meetings should be retained indefinitely for future reference. Besides, when members want copies of HOA records, they should be available in 10 days for the current financial year or thirty days for the previous financial years. The records members can inspect are:
- Association governing documents
- Financial documents and reports
- Copies of authorized contractors and vendors, proposals, and contracts
- Association open meeting agendas
- Open meetings minutes
- Lists of association members
- Election materials
Once the records have been requested, they can only be reviewed in HOA business offices or in a suitable location within the community.
The law allows the association to withhold particular documents if they believe disclosure can result in ID theft or fraud cases. Nevertheless, when it does this, it must give a logical explanation. You can file a civil lawsuit if records are withheld without a legal reason. At the Los Angeles Business & Real Estate Law Firm, we can help you convince the court to award you legal fees against the HOA and civil penalties of no more than $500 for every document withheld.
Also, records regarding the payment of vendors or contractors cannot be withheld, although they can redact personally identifying details of the vendors.
Lastly, the HOA will not produce these documents free of charge. You must pay a fee.
New California Statutes on Association Elections
AB 1101, AB 502, SB 391, SB 392, and SB 432 were all passed in 2021 to change the governing of HOAs.
AB 501 establishes CIV 5103, allowing community associations to publicize board members elected without going to the ballot. The requirements HOA must meet to nominate board members without going to a vote are:
- Inform members of a possible acclamation election
- Issue announcements reminding homeowners of the nomination seven to thirty days before the end of the acclamation election
- Send acknowledgment letters to candidates recognizing the receipt of the nominees
- Inform nominees of their candidacy or ineligibility within a week of the nomination
- Hold acclamation elections every two or three years
Fair Housing
HOAs are bound by the Fair Housing Act (FHA). However, California has its FHA, which protects its members against racial, color, ethnic, sex, religious, and familial status discrimination. HOAs cannot discriminate against members based on their sexual orientation, income source, age, gender identity, or marital status.
Furthermore, when an association adopts discriminatory covenants or regulations against tenants or members, they violate FH statutes.
Reasonable Accommodation
HOAs must offer their members reasonable accommodations and modifications compliant with the FHA and the Americans with Disabilities Act (ADA) to enable persons with disabilities to access their units or common areas. Therefore, when necessary, the association must modify or adjust regulations, policies, permits, and structures to accommodate disabled Americans.
Service Animals
FHA and ADA defer on the definitions of service animals. The ADA describes service animals as dogs and miniature horses with special training, while the FHA defines them as assistance animals. As a result, community associations need help with the law.
Typically, associations should allow service animals in the planned development even when they have a strict policy against keeping pets. Nevertheless, HOAs have reasonable regulations to pick up after their animals and keep them on a leash in public places. Any request to have a service animal that threatens the health and safety of the community will be denied.
Servicemembers Act
The Act protects active duty members of the American Army against foreclosure or litigation. Also, the law safeguards National Guard members and reservists activated for thirty consecutive days from foreclosure or a six percent interest rate on debt.
Find an Experienced Real Estate Attorney Near Me
HOA laws are complex, and as you try to abide by them, you can run into conflict with the association or your neighbors as a property owner. Disputes are resolvable by phone or email, but some require formal meetings with the board. If you need help to understand all the laws of the association in a dispute, or some board members are making your life difficult, you want to involve an attorney with knowledge of real estate law. At the Los Angeles Business & Real Estate Law Firm, we can help you address all your legal issues or questions about HOAs. Reach out to us today at 310-796-7794 for a no-obligation consultation.
