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DEALING WITH YOUR HOMEOWNER’S ASSOCIATION

With the growth of common interest developments, such as large developments of single family homes, homeowners associations are becoming more and more prevalent by the day. Homeowners associations are typically mandatory when a buyer purchases a lot, or ownership interest, in a development. Although most homeowners associations are incorporated, and thus governed by the State, oversight is often minimal. Homeowners associations are generally incorporated by the developer prior to the sale of the land, at which time the Codes, Covenants & Restrictions, are recorded. The restrictive covenants “run with the land” and thus, if one member sells a home he is no longer part of the association and the new owner takes his place, and is subject to the restrictions that attach as well.

All homeowners in a given development have to follow the restrictions set forth in the CC&R’s. Generally, these powers relate to the homeowners association’s goals of “protection, preservation or proper operation of the property and the purposes of the association as set forth in its governing instruments” (Laguna Royale Owners Assn. v. Darger, 119 Cal.App.3d 670). Homeowners associations have many methods to enforce these restrictions including the threat, or actual levying of fines, liens and legal action against an individual homeowner. Given the broad powers of a homeowners association to enforce its goals, an individual homeowner can be faced with a daunting task of defending themselves if the association deems them to have run afoul of the CC&Rs. However, just because a homeowners association claims a homeowner is in violation, doesn’t make it true.

If a homeowners association is trying to enforce restrictive covenants against you as a homeowner, it is important to know what they can do, and perhaps more importantly, what they can’t. To begin with, most homeowners associations have general review or architectural design committees charged with the task of making sure homeowners requests are in line with the restrictive covenants set forth by the homeowners association. Homeowners associations must follow the guidelines they have set forth in order to enforce a restrictive covenant. Even then, when an association seeks to enforce a restriction, it must still do so in good faith and not act in a manner that is arbitrary or capricious. Finally, the enforcement procedures must be fair and applied uniformly to all homeowners. This basically boils down to the homeowners association acting in a reasonable manner. But how will a court decide what reasonable means?

California has a relatively large body of law on the topic compared
to most other states. Several decisions have shaped what homeowners
associations must do in order to pass the reasonableness standard in
enforcing restrictive covenants. In Lambden v. La Jolla Clubdominium
Homeowners Assn
., 87 Cal. Rptr. 2d 237 (1999) the California Supreme
Court Set forth the standard for determining the test in upholding
enforcement decisions made by homeowners associations. The Court found
that homeowners associations actions must be based “upon reasonable
investigation, in good faith and with regard for the best interests of
the community association and its members.” Id.

Similarly, in Ironwood Owners Assn. IX v. Solomon, 178
Cal.App.3d at p. 772, the court struck down a homeowners association’s
motion for summary judgment holding that the homeowners association
seeking to enforce its CC&R’s to compel action by a member-owner
must “show that it has followed its own standards and procedures prior
to pursuing such a remedy, that those procedures were fair and
reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious” Id.

Finally, in Laguna Royale Owners Assn. v. Darger , 119
Cal.App.3d 670 (1981) the court defined the test for “reasonableness” by considering “whether the reason … is rationally related to the
protection, preservation or proper operation of the property and the
purposes of the Association as set forth in its governing instruments.”
Id.

Given the foregoing, it is clear that while a homeowners
association does have discretion in enforcing selective covenants, they
must do so in a manner that is reasonable and in good faith. Homeowners associations cannot pick and choose which restrictions to enforce and
who to enforce them against. Enforcement must be based on reasons that
are rationally related to protecting the interests of the association.
Moreover, enforcement must be uniformly applied in a manner that is not
arbitrary or capricious.

Dealing with a homeowners association can be a challenging and
intimidating experience for a homeowner. Oftentimes homeowners comply
with demands that are not enforceable because they believe they have no
other recourse. While homeowners associations do have latitude in
enforcing restrictive covenants, that latitude is not without limits and there are many case where that power has been abused. If your
homeowners association is attempting to enforce a restrictive covenant
without cause, remember, just because the homeowners association says
you are in violation, doesn’t necessarily mean that you are. A careful
analysis should be conducted by a knowledgeable attorney to determine
your rights.