Although it would be nearly impossible to compile a list of every law that might potentially apply to a community association, there are some that come up much more frequently than others.
For California associations—including homeowners’ associations (HOAs), condominium associations, and residential co-ops—fair housing and debt collection laws and the Davis-Stirling Act are at the top of the list.
As California’s state statute specifically regulating “common interest developments,” the Davis-Stirling Act presents a uniquely comprehensive legal framework for associations in California. Compared to most other jurisdictions’ HOA-specific laws, the California version is much more in-depth and detailed.
With well over 200 individual code sections, Davis-Stirling’s volume alone can be daunting. However, for California homeowners who want a better understanding of their legal rights and responsibilities as members of an HOA or condo association, a review of Davis-Stirling is a great place to start.
HOMEOWNERS’ ASSOCIATIONS
The Davis-Stirling Common Interest Development Act (Cal. Civ. Code §§4000 – 6150), governs HOAs in California. Initially passed in 1985, Davis-Stirling has been frequently amended since and addresses nearly every aspect of an HOA’s existence and operation.
Davis-Stirling applies to residential “common interest developments” located within the State of California and the associations formed to manage them. Cal. Civ. Code §4200. Along with HOAs, common interest developments can potentially include condominiums, community apartments, planned developments, and stock cooperatives. Cal. Civ. Code §4100.
In general, Davis-Stirling governs the creation and planning of new common interest developments and the formation and operation of HOAs and other community associations. Among many other things, the law sets forth standards for board elections, association and board meetings, transfer of property interests, elections and voting within communities, budgeting and assessments, record keeping and inspection, and association reporting.
Like most state HOA laws, Davis-Stirling empowers association boards to take a variety of actions on behalf of the community, places limitations on board members and officers, and protects certain rights of homeowners.
Where the Davis-Stirling Act is somewhat unique is the level of detail and specificity the law goes into when defining the relative powers and rights of the parties. For example, the statute expressly acknowledges residents’ right to:
Importantly, the Davis-Stirling limits the power of an HOA to (among other things) restrict:
Pet ownership by residents (§4715),
Prohibit the rental of homes in the community (§4740), or
Prevent homeowners from gardening (§4750).
The Davis-Stirling Act is organized into the following eleven Chapters:
General Provisions.
Application of Davis-Stirling Act.
Governing Documents.
Ownership and Transfer of Interests.
Property Use and Maintenance.
Association Governance.
Finances.
Assessments and Assessment Collection.
Insurance and Liability.
Dispute Resolution and Enforcement.
Construction Defect Litigation.
Each chapter is further subdivided into as many as ten articles, and each article includes varying numbers of individual sections.
CONDOMINIUM ASSOCIATIONS
Condominium associations in California are, like HOAs, primarily governed by the Davis-Stirling Act. While most of the statute’s provisions apply to both condominiums and HOAs, Davis-Stirling includes several provisions specific to condos, including provisions relating to creating, recording, and amending condominium plans and limitations on the divisibility of condominium interests. (Cal. Civ. Code §§4285-4295, 4610, 4630).
COOPERATIVE ASSOCIATIONS
“Stock Cooperative” associations (commonly called “co-ops”) in California are likewise governed by the Davis-Stirling Act. A stock cooperative is a corporation formed for the primary purpose of owning real estate, and shareholders in the corporation receive an exclusive occupancy right in part of the co-op’s property. Cal. Civ. Code §4190(a).
In California, a stockholder’s stake in a residential co-op is treated along the same lines as rights to individual properties and common elements in an HOA or condo association. Id.
ASSOCIATION’S CORPORATE GOVERNANCE
Under the Davis-Stirling Act, an association managing a common interest development can be either a non-profit corporation or an unincorporated association. Cal. Civ. Code §§4080, 4800. Associations that incorporate are required to file articles of incorporation with the California Secretary of State. Cal. Civ. Code §4280.
Whether or not incorporated, community associations are granted the powers of non-profit mutual benefit associations under the California Corporations Code, §7140, including the powers to adopt bylaws and enter into contracts.
General matters of corporate governance, when not explicitly addressed by Davis-Stirling, are controlled by the California Corporations Code, and, more specifically, the provisions applying to non-profit corporations and non-profit mutual benefit corporations.
PROPERTY USE AND ARCHITECTURAL CONTROL RESTRICTIONS
Among the most important and relevant of the Davis-Stirling Act’s provisions are the limitations the statute places on community associations’ power to limit how homeowners use and access their properties.
While the general rule is that HOA and condominium declarations are essentially private contracts that will be enforced as written, in some cases, the legislature recognizes that certain rights or public policies are important enough to merit statutory protection.
Rental Restrictions
Courts throughout the U.S. have consistently upheld HOA rental restrictions as long as an association can cite a legitimate purpose for the restriction. See Four Brothers Homes at Heartland Condominium II, et al., v. Gerbino, 691 N.Y.S.2d 114 (1999).
However, for some property owners, the ability to rent out a residence can make up a big part of a property’s value. Consequently, depriving property owners of the ability to earn rental income amounts to depriving them of a significant property right.
The California legislature has sought to balance competing community interests and homeowner property rights by allowing the enforcement of rental restrictions already in place when a property is purchased, while “grandfathering” the right to rent of owners who already held title to a property when an HOA rental restriction was adopted. Cal. Civ. Code §4740(a), (b).
However, reasonable limitations (but not outright prohibitions) are generally enforceable, even against owners whose interests pre-date the adoption of such limitations. Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361; Laguna Royale Owners Assn. v. Darger (1981) 119 Cal.App.3d 670.
Moreover, to avoid the potential problem of purchasers not realizing that a newly acquired property is subject to rental restrictions, California affords purchasers the right to be informed of any rental restrictions before a sale contract can be executed, or title transferred. Cal. Civ. Code §4525(a)(9).
Commercial Use Restrictions
Reasonable restrictions against commercial use of residential properties in an HOA community are enforceable in jurisdictions across the country. Indeed, many HOAs are already subject to zoning ordinances limiting properties in the area to residential use only.
Significantly, though, short-term rentals (e.g., “AirBnB”) can sometimes implicate community prohibitions against commercial use even if the rental might not offend a zoning ordinance.
California courts have acknowledged that short-term rentals can sometimes impose unique burdens on a community and have therefore generally allowed restrictions against short-term rentals even when an outright prohibition might be unenforceable under Cal. Civ. Code §4740.
The idea is that restrictions on short-term rentals are rules or limitations (not prohibitions), and therefore minimum lease periods, for example, are reasonable exercises of a community association’s authority. Watts v. Oak Shores Community Assn., (2015) 235 Cal.App.4th 466; Mission Shores Assoc. v. Pheil,(2008) 166 Cal.App.4th 789.
Street Parking and Towing
HOAs and condominium associations have the right to enact restrictions if the restriction serves a legitimate purpose—including protecting the aesthetics and accessibility of a community. Cal. Civ. Code §5975; Laguna Royale Owners Assn. v. Darger, (1981) 119 Cal.App.3d 670.
Associations have the power to regulate the use of common areas, so regulation of parking on a private street or parking lot that is a common element owned by the association is within its powers. This authority could include limiting the number of vehicles per member or assigning specific parking spots for units.
Public streets are not common elements, and therefore an HOA cannot regulate parking on a public street. However, community associations can place restrictions on the activities of members within the community. So, although the issue is not entirely clear under California law, a reasonable limitation on public street parking by members within the community is likely enforceable.
Under limited circumstances, California law permits community associations to tow improperly parked vehicles in the community. Cal. Veh. Code §22658. To do so, a compliant “no parking” sign must be:
Posted in plain view; or
The vehicle must have been issued a notice of the parking violation at least 96 hours before towing; or
The vehicle must be inoperable; or
The vehicle must be parked on a lot or parcel that includes a single-family dwelling. Id.
An association’s towing request needs to include a compliant authorization, and, to the extent possible, the association must also provide notice of towing to the vehicle owner.
Religious Symbols
Davis-Stirling expressly recognizes the right of HOA and condominium residents to display religious items on the entry doors to their homes if the display is motivated by sincerely held religious belief. Cal. Civ. Code §4706.
Community associations can, however, limit a religious display to the extent it threatens public health or safety, hinders opening/closing of the door, violates relevant law, includes obscene or illegal images or language, or exceeds 3’ x 1’ in size. Cal. Civ. Code §1940.45.
Associations can request temporary removal of a protected display to the extent necessary for maintenance and repairs.
Political Signs
Although First Amendment rights are generally inapplicable to transactions between private parties, the U.S. Supreme Court has held that an individual state has the “sovereign right to adopt in its own Constitution individual liberties more expansive than those conferred by the Federal Constitution.” PruneYard Shopping Center v. Robins, 447 U.S. 74, 81 (1980). To that effect, California’s Davis-Stirling Act includes explicit protections of residents’ right to engage in political activities.
Members of California community associations cannot be prohibited from peacefully assembling for political purposes, inviting officials or candidates to speak in the community, or canvassing or petitioning within the community. Cal. Civ. Code §4515(b).
Although Davis-Stirling does not expressly address political signs, it does protect members’ right to display “noncommercial signs,” which can potentially include political signs. Cal. Civ. Code §4710. Specifically, community associations may not prohibit members from displaying noncommercial “signs, posters, flags, or banners on or in a member’s separate interest…”
Associations may prohibit signs “made of lights, roofing, siding, paving materials, flora, or balloons,” limit the size of signs over nine square feet or forbid signs which endanger public health or safety or violate relevant law. Id.
U.S. Flag Display
Like the federal Freedom to Display the American Flag Act of 2005, California’s Davis-Stirling Act forbids community associations from banning or limiting the display of the American flag. Cal. Civ. Code §4705. The California law clarifies that it protects the display of an actual flag on a flagpole or in a window and not “a depiction or emblem of the flag of the United States” made of materials other than fabric, cloth, or paper. Id.
Unlike the federal statute, California’s flag-protection law does not include a carve-out allowing reasonable restrictions on the “time, place, and manner” of the display. Moreover, unlike flag-protection laws in many other states, the Davis-Stirling Act does not include the state flag within its protections.
Satellite Dishes, Solar Panels, and other Architectural Restrictions
Davis-Stirling includes several precise limitations on the power of community associations to restrict or prohibit specific devices or implements situated on a homeowner’s property. For example, TV antennas and satellite dishes up to 36 inches and not readily visible from common areas are protected, subject to “reasonable restrictions” that do not significantly affect the cost or effectiveness of the antenna or satellite. Cal. Civ. Code §4725.
Any prohibitions on the use of a solar energy system or electric vehicle charging station are void and unenforceable, provided the system in question is up-to-code. Cal. Civ. Code §§714, 4745. “Reasonable restrictions” not affecting cost, efficiency, or performance are allowable, and an association can require liability insurance and notice to other owners if the system will be installed in a common area, including a common area roof. Cal. Civ. Code §§714, 4745, 4746.
Davis-Stirling also protects homeowners’ right to garden in their own (i.e., exclusive-use) backyards. HOA prohibitions and unreasonable restrictions against personal agriculture are void and unenforceable in California. Cal. Civ. Code §4750. “Personal agriculture” means the cultivation of “edible plant crops for personal use or donation.” Cal. Civ. Code §1940.10.
Similarly, associations cannot prohibit or unreasonably restrict homeowners’ use of clotheslines and drying racks in their backyards. However, balconies, railings, awnings, and other parts of a building cannot qualify as clotheslines or drying racks. Cal. Civ. Code §4753.
RECORDS INSPECTION
In more or less every jurisdiction, members of community associations have a right to inspect association records. Under Davis-Stirling, “association records” and “enhanced association records” subject to inspection include a community’s:
governing documents;
most financial records, reports, and statements;
copies of contracts, proposals, and approvals from vendors or contractors;
meeting agendas and minutes;
membership lists; and
election materials.
Most records must be maintained and available for inspection during the year created and for the following two years. Cal. Civ. Code §5210(a). Board and member meeting minutes must be maintained indefinitely. Id.
Upon receiving a member’s request for inspection, a California HOA, condominium association, or cooperative governed by Davis-Stirling must be prepared to produce current-year documents within ten days and prior year documents within 30 days.
Records are made available for review at the association’s business office within the community or at another agreeable location. Cal. Civ. Code §5205(c). Alternatively, if a member requests copies of specific documents, the association can provide copies via first-class mail or electronic transmission (e.g., via email) if the transmission can be accomplished “in a redacted format that does not allow the records to be altered.” Cal. Civ. Code §5205(c)(d), and (h).
An association can withhold or redact certain documents if there is a risk that disclosure could result in fraud or identity theft. And some records—such as executive board meeting minutes, documents subject to attorney-client privilege, records relating to disciplinary or collection actions against members, association personnel records, and records of “goods or services provided a la carte to individual members” for consideration other than assessments—are exempt from production or inspection. Cal. Civ. Code §5215(a)(5).
If an association withholds or redacts records, it must produce a written explanation that identifies the legal basis. Cal. Civ. Code §5215(d). If a reviewing court later determines that an association wrongfully withheld documents from a member, the court can enter an award of attorney’s fees against the association and a civil penalty of up to $500 per wrongful withholding. Cal. Civ. Code §5235.
Records relating to compensation paid to employees, vendors, and contractors may not be withheld from an inspection request, though personally identifying information within such records may be redacted. Cal. Civ. Code §5215(b). When employee compensation is reported, it should be categorized by job title rather than the employee’s name. Id.
If a member seeks a membership list as part of a document production request, the member is required to identify the purpose for the list. If the association reasonably believes the request serves an improper purpose, it can refuse to produce the list. Cal. Civ. Code §5225.
An association may impose a limited charge on members who request the production of documents. The charge cannot exceed “all direct and actual costs of copying and mailing” and labor costs of up to $10.00 per hour (not to exceed twenty hours) for “time actually and reasonably involved in redacting enhanced association records.” Cal. Civ. Code §5205(f), (g).
FAIR HOUSING LAWS
Fair Housing Act (“FHA”), 42 U.S.C. §3601, et. seq., is the quintessential fair housing statute enacted in 1968 to prohibit housing discrimination based on race, color, religion, sex, familial status, and national origin. Disability-based discrimination was included within the FHA by a subsequent amendment. 42 U.S.C. §3604.
Although the FHA does not expressly address age-based discrimination, courts reviewing the statute have consistently interpreted nearly any discrimination relating to age (including discrimination against children, families with children, or pregnant women) as unlawful “familial status” discrimination. See Iniestra v. Cliff Warren Investments, Inc., 886 F. Supp. 2d 1161, 1164 (C.D. Cal. 2012).
Under the FHA, an HOA or other community association can incur serious legal liability if it takes an adverse action affecting a person’s right to buy, rent, or enjoy the use of real estate if the action is based upon that individual’s membership in a protected class.
Adverse actions under the FHA can be rooted in express discrimination, such as exclusionary covenants preventing the sale or lease to people of a certain racial group or national origin. Or, FHA liability can arise from actions that do not appear discriminatory on the surface, but which result in a “disparate impact” on a protected group. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S.Ct. 2507 (2015).
We have previously written in-depth about discriminatory housing practices that can come in many forms. For an HOA or condominium association, it might mean:
adopting a discriminatory covenant,
failing to provide or providing inferior services relating to a resident’s membership in a protected class,
limiting access to amenities by families with children, or
implementing a tenant-screening policy that disproportionately affects members of a certain group.
Reasonable Accommodations
Along with avoiding discriminatory conduct, the Fair Housing Act and, when applicable, Americans With Disabilities Act (ADA), 42 U.S.C.A. §§ 12101 et seq., impose an affirmative duty to make “reasonable accommodations” or “reasonable modifications” allowing disabled persons full access and enjoyment of housing and association benefits.
As defined by the U.S. Department of Justice (DOJ) and the U.S. Department of Housing and Urban Development (HUD), a reasonable accommodation is a “change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces.” Reasonable Accommodations under the Fair Housing Act (2004).
A reasonable modification is a “structural change made to existing premises, occupied or to be occupied by a person with a disability, in order to afford such person full enjoyment of the premises.” Joint Statement of HUD and Dept. of Justice Reasonable Modifications under the Fair Housing Act (2008).
A reasonable accommodation or modification might mean modifying parking rules for a disabled resident or widening halls or doorways to allow access by a resident who uses a wheelchair. A modification or accommodation relating directly to a resident’s disability can only be declined by an HOA or condominium association “if it would impose an undue financial and administrative burden … [or] would fundamentally alter the nature of the provider’s operations.” Warren v. Delvista Towers Condo. Assoc., 49 F.Supp. 3d 1082 (2014).
Similarly, under California’s state-level fair housing law, a request for accommodation can only be denied if it would result in “significant difficulty or expense … when considered under the totality of circumstances.” Cal. Code Regs. tit. 2 § 11065(r), 11068.
Assistance Animals
The obligation of HOAs and condominium associations to make accommodations for assistance animals has been the source of substantial litigation in recent years.
The Americans With Disabilities Act (ADA) only requires accommodation for “service animals,” narrowly defined to include only dogs (and sometimes miniature horses) with specialized training.
However, under the federal Fair Housing Act (ADA) standards, an “assistance animal” is “an animal that works, provides assistance, or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one or more identified symptoms or effects of a person’s disability.” HUD FEO 2013-01. The FHA standard is much broader, sometimes leading to legal problems for HOAs.
In one notable case, a condominium association refused to waive its pet-size restriction to allow a PTSD-suffering veteran to keep his emotional support dog—Bhogaita v. Altamonte Heights Condominium Assn., 765 F.3d 1277 (11th Cir., 2014). The court found that the condominium association’s refusal violated the FHA and imposed significant liability against the association.
It is worth noting, though, that California state law permits a housing provider to refuse an accommodation if it would involve a legitimate health and safety risk. Cal. Code Regs. tit. 2 § 11067. California also imposes criminal fines up to $1,000 and up to six months imprisonment for falsely claiming that an animal is a service animal. Cal. Penal Code § 365.7.
Though similar in design, California’s Fair Employment and Housing Act FEHA, Cal. Govt. Code §12900, et. seq., and Unruh Civil Rights Act, Cal. Civ. Code § 51, et. seq., increase state-level protection against housing discrimination by adding additional protected categories for citizenship and immigration status, primary language, sexual orientation, gender identity, genetic information, income source, and veteran status. California’s fair housing laws are administered by the state’s Department of Fair Employment and Housing.
AMERICANS WITH DISABILITIES ACT
The Americans With Disabilities Act (ADA), 42 U.S.C.A. §§ 12101 et seq., was enacted in 1990 to protect disabled persons against discrimination in employment, transportation, public accommodations, communications, and access to government programs and services. The statute defines “disability” as a “physical or mental impairment that substantially limits one or more major life activities,” potentially including deafness, blindness, mobility impairments, severe diseases, depression, bipolar disorder, and PTSD. 42 USC §12102.
Where the Fair Housing Act almost always applies to HOAs and condominium associations, the ADA only applies to associations that meet certain criteria. The most common situation in which an HOA is subject to the ADA is when it has facilities that amount to public accommodations.
The text of the ADA identifies twelve different types of facilities that qualify as “public accommodations.” 42 U.S.C. §§ 12181(7)(a)-(l). Of the twelve, recreational facilities such as pools, gyms, and golf courses are the most commonly associated with community associations. A large association with at least fifteen employees might also fall within the purview of the ADA as an employer. 42 U.S.C. §12111(5)(A).
If the ADA governs an HOA, it must ensure that its operations and facilities are equally accessible by disabled persons. If it qualifies as an employer, an HOA cannot discriminate against disabled persons in firing, hiring, or promotion decisions, and cannot permit segregation or harassment of a disabled employee. 42 USC §12112(a).
Significantly, for an HOA facility to qualify as a “public accommodation,” it must allow access to the general public. If only members have access to the facility, it will not qualify as a public accommodation, and, as a result, will not be subject to the ADA.
Thus, if an HOA has a fitness center that non-residents can access, the HOA will likely be subject to the ADA. Or, if an association operates a generally accessible restaurant, tavern, or daycare facility, it might also find that the ADA applies to its activities.
“Service animals” assisting disabled persons are protected under the ADA, but the protection is much more limited than the FHA’s protection of “assistance animals.” For the most part, only specially trained dogs qualify—the ADA does not cover most “emotional support animals” that would be protected under the FHA.
FAIR DEBT COLLECTION PRACTICES ACT
The Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. §1692, et seq., restricts and regulates the collection of consumer debts by “debt collectors.” 15 U.S.C. §1692a(6). Significantly, a “debt collector” under the statute is someone who collects debts owed to a third-party creditor.
So, although HOA assessments usually qualify as “debts” and homeowners as “consumers,” an HOA attempting to collect assessments on its own behalf is generally not subject to the FDCPA. Ladick v. Van Gemert, 146 F. 3d 1205 (10th Cir.1998); Thies v. Law Offices of William A. Wyman, 969 F. Supp. 604 (S.D. Cal. 1997).
However, the FDCPA does apply when an HOA refers delinquent assessments for collection by a law firm or collection agency. See Fuller v. Becker and Poliakoff, 192 F. Supp. 2d 1361 (M.D. Fla. 2002).
Property management companies working for HOAs sometimes qualify as “debt collectors,” depending on the company’s “principal purpose.” If debt collection is essential to a company’s operations, it will likely be a “debt collector.” However, if the collection of debts is only a small or incidental part of what the property manager does, it might not be subject to the FDCPA. See, e.g., Alexander v. Omega Management, Inc., 67 F. Supp. 2d 1052 (D.Minn 1999); Franceschi v. Mautner-Glick Corp., 22 F. Supp. 2d 250 (S.D.N.Y. 1998).
When applicable, the FDCPA prohibits harassment, oppression, and abuse of consumers generally and specifically forbids (among other things) publication of debt-related information to third-parties and collection of fees not expressly allowed by statute or the agreement creating the debt. See 15 U.S.C. §1692b-f.
California has its own state-level debt collection law known as the Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code §§ 1788 to 1788.33. One of the Rosenthal Act’s most significant provisions is that it applies FDCPA-like restrictions directly to creditors—rather than just to third-party debt collectors.
Thus, a California homeowners’ association or condominium association seeking to collect assessments is potentially subject to statutory restrictions on debt collection under California state law, even if the FDCPA would not apply directly to the association.
SERVICEMEMBERS CIVIL RELIEF ACT
The Servicemembers Civil Relief Act (SCRA), 50 U.S.C. §501, et. seq., provides additional protections against civil litigation and foreclosure to members of the U.S. armed services. The SCRA protects service members while they are on active duty, and the law’s protections extend to reservists and national guard members who have been activated for 30 or more consecutive days.
While the SCRA protects a service member, a creditor or lienholder cannot obtain a civil default judgment or attempt to foreclose on a property owned by the servicemember non-judicially. For community associations, this means that an HOA or condominium association can neither obtain a judgment for delinquent assessments nor foreclose on an assessment lien against a service member protected by the SCRA.
The SCRA caps interest at 6% on debts from before a servicemember’s service, while protecting him or her for a year after that. Thus, an association cannot charge a servicemember a rate of over 6% if the assessments came due before the servicemember’s period of service.
Additionally, under the SCRA reservists who are activated and soldiers who are redeployed have a right to terminate residential leases, “30 days after the next rent payment is due.” 50 U.S.C. § 3955(d)(1).