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Articles Posted in Architectural Control

view*Asked & Answered

Asked – Our HOA has been receiving architectural applications from Owners who are requesting to install tall trees or increase the height of their property walls for additional privacy. However, several neighbors have expressed their stark opposition to any modifications that would impact the views from their property. Is our Architectural Committee obligated to approve the applications provided it complies with all other requirements, or should the application be denied to preserve the neighbor’s views?

Answered – It depends on the language contained within the HOA’s governing documents.

At the outset, it is important to recognize that all owners of real property located within the Association’s community are subject to the duties, obligations, and restrictions set forth in California Civil Code sections 4000-4765, the Declaration, and the Association’s other “Governing Documents” as defined in Civil Code section 4150.

Included in most Governing Documents is the requirement that any Owners that wish to modify the exterior of their property must first submit an architectural application (“Application”) to the HOA’s Architectural Committee (“Committee”) for approval. Furthermore, most HOAs adopt some type of Architectural Standards that clearly define the aesthetic requirements that must be met to obtain approval from the Committee.

Architectural Standards set forth an association’s policies and procedures regulating a homeowner’s ability to make architectural improvements and modifications to the homeowner’s separate interest, as well as to common area and exclusive use common area.

However, while almost all HOAs establish some type of Committee, Architectural Standards, and Application review process, not all HOAs have provisions regarding the preservation of views or clearly define what constitutes a “view”.

To provide guidance in view dispute scenarios, in Posey v. Leavitt, the California Court of Appeals for the Fourth Appellate District held that absent CC&R provisions, members have no right to air, light, or an unobstructed view. (Posey v. Leavitt, (1991) 229 Cal.App.3d 1236.) As a result, without an expressed provision protecting a homeowner’s right to a view, the Association is under no obligation to deny the Application on that basis.

Under circumstances where the HOA’s Governing Documents include some type of vague view protection, we recommend that the Association adopt a conservative approach to avoid overstepping which would result in a costly lawsuit. Due to the high correlation between property values, views, and a member’s interests in preserving the same, we recommend that HOAs contact their attorney to conduct a thorough review of their Governing Documents to provide clear direction on view protections within their community.

California HOA lawyers Contact your attorney to evaluate your HOA’s Governing Documents, view protections, and to update your existing Architectural Standards.  

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

origin*Unpublished Case

In California jurisprudence, it is well established that a homeowner “has no right to an unobstructed view over adjoining property.” (Posey v. Leavitt (1991) 229 Cal. App. 3d 1236, 1250.) Such right may, however, “be created by private parties through the granting of an easement or through the adoption of conditions, covenants and restrictions.” (Id.) And, even then, the right must be expressly stated and narrowly construed.

For example, in the recent unpublished case of Davis v. Irvine Terrace Community Association (2021) 2021 Cal. App. Unpub. LEXIS 53, an owner (“Owner”) sued the association (“Association”) and others alleging a breach of the Association’s Covenants, Conditions and Restrictions (“CC&Rs”). Owner claimed that the Association breached the CC&Rs when it approved a neighbor’s architectural application, which included the construction of a house that would obstruct Owner’s view. While the CC&Rs protect views as to landscape, fences and walls, it contained no similar protection as to houses. Owner nevertheless argued that such protection existed because of the Association’s obligation to enhance and protect “the value, desirability and attractiveness of” Owner’s property. (Id. at p. *16.) The Court rejected Owner’s argument.

In rejecting the Owner’s argument, the Court noted that the CC&Rs included no view protection as to structures such as houses; the Court was unwilling to read into the CC&Rs additional view protections based on the impact architectural modifications would have on the value, desirability and attractiveness of the Owner’s property. Moreover, the Court pointed out that neither the CC&Rs nor the Architectural Guidelines were “intended to protect individual homeowners’ interests. They are intended to protect the community as a whole.” (Id. at p. *14.) Thus, when reviewing an application for an architectural modification, an association need not consider the impact such construction will have on the interests of individual homeowners; rather, the association is only required to consider how such construction will impact the entire community.

Lastly, the Court rejected Owner’s argument that the Association failed to “subjectively consider[] whether [the structures] height and location…will cause disharmony with surrounding structures, including [Owner’s] home[].” (Id. at p. *15.) While reviewing architectural applications will necessarily include a subjective component, there is nothing preventing the Architectural Committee from making a decision based on objective criteria: “The Committee is within its discretion to decide that a proposed plan meets the criteria of “harmony of external design” if it meets certain objective criteria such as height, color, and design scheme when compared to existing structures….” (Id.)

California HOA lawyers Accordingly, the Architectural Committee was justified in approving the neighbor’s application because it satisfied objective criteria contained in the Association’s Architectural Guidelines.

-Blog post authored by TLG Attorney, Matthew T. Plaxton, Esq.

IMG_8205*Asked and Answered

Asked Our HOA has recently started receiving architectural applications from owners who wish to install either an accessory dwelling unit (“ADU”) or junior accessory dwelling unit (“JADU”) upon their separate interest. However, our Board of Directors is concerned about the impact of additional traffic within the development and diverging initial intent of our community. Can our architectural committee (“ARC”) deny the applications on that basis?

Answered – Unlikely. On January 1, 2020, California Civil Code section 4751 (“Civil Code 4751”) went into effect and made sweeping changes to the way in which associations may limit its membership from constructing accessory dwelling units or junior accessory dwelling units. Specifically, Civil Code 4751 rendered void and unenforceable any provision of an association’s governing documents that “effectively prohibits or unreasonably restricts the construction or use of an accessory dwelling unit or junior accessory dwelling unit on a lot zoned for single-family residential use.”

Additionally, local governmental agencies will be required to process applications within sixty (60) days of their submission. (Govt. Code § 65852.2(b).) Moreover, some applications can receive ministerial approval. (Govt. Code § 65852.2(e).) That means the permit requests can be approved without a hearing notwithstanding any local ordinance regulating the issuance of variances or special use permits. Provided the application for the ADU complies with requirements, the local governmental agency is required to approve the permit as a matter of right. No discretion exists for permit applications that satisfy the governmental requirements.

In addition to the foregoing, Governor Gavin Newsom signed Assembly Bill 3182 (“AB 3182”) on September 28, 2020, which significantly limits the extent to which HOAs may impose rental restrictions and prohibitions. Under AB 3182, the newly codified Section 4741 of the California Civil Code renders void and unenforceable any provision in a governing document (or amendment thereto) “that prohibits, has the effect of prohibiting, or unreasonably restricts the rental or leasing of any of the separate interests, accessory dwelling units, or junior accessory dwelling units in that common interest development to a renter, lessee, or tenant.”

Considering the foregoing, the Association’s discretion in approving and denying ADU and JADU applications have been greatly limited. However, Civil Code Section 4751 does not apply to provisions of an association’s governing documents that impose “reasonable restrictions” on accessory dwelling units or junior accessory dwelling units.

“Reasonable restrictions” within this context refer to restrictions that do not unreasonably increase the cost to construct, effectively prohibit the construction of, or extinguish the ability to otherwise construct, an accessory dwelling unit or junior accessory dwelling unit consistent with the provisions of Government Code Sections 65852.2 or 65852.22. (Civ. Code § 4751(b).)  The types of reasonable restrictions on ADUs and JADUs are set forth in Government Code Sections 65852.2 and 65852.22, respectively.

As a result, and to ensure that the Association has a degree of discretion, at least regarding aesthetic features, such as appearance, materials, height, and other visuals, we recommend that the Association work with an architect to prepare and establish architectural guidelines for ADUs and JADUs consistent with the new law. Once created, we then recommend that the Association adopt relevant operating rules or an ADU/JADU policy that will serve to effectuate the restrictions on ADUs and JADUs that are permissible under AB 3182 and incorporate the new architectural guidelines.

California HOA lawyers Contact your HOA attorney to conduct an in-depth analysis of the specific ADU and JADU requirements in your specific county and to prepare related ARC Policies.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

CPSC-Statute-of-Limitations-scaled-e1585591179590*Asked & Answered

AskedIs the Board of Directors required to bring legal action, within a certain timeframe, against a homeowner, who is violating the association’s governing documents?

Answered In most circumstances, the association has five (5) years to bring legal action against violating homeowners pursuant to the Statute of Limitations.  (See Code Civ. Proc., § 336(b).)  The Statute of Limitations begins to run from the time the board discovers the violations or, through exercise of reasonable diligence, should have discovered the violations. Determining when the Statute of Limitations begins to run is a fact intensive inquiry, which must be evaluated on a case-by-case basis.

The five-year Statute of Limitations tolls (or is extended) in two limited circumstances.  The Statute of Limitations will toll for a period of thirty (30) days after a party (either the HOA or a homeowner) offers Alternative Dispute Resolution (“ADR”). (Civ. Code, § 5945(a).)  The Statute of Limitations will later toll for a period of ninety (90) days after one party accepts ADR, so that mediation can take place. (Civ. Code, § 5945(b).)  This tolling period will also include any extensions agreed to, in writing, by the parties. (Civ. Code, § 5945(b).)

HOAs should keep in mind that even if the Statute of Limitations has not yet expired, the Court has the authority to prohibit an HOA from initiating legal action if it believes that the HOA failed to promptly enforce the governing documents.  These legal defenses are known as the defense of “laches” and “waiver.”  The defense of laches requires a homeowner to prove that he was prejudiced by the HOA’s unreasonable delay in enforcing the governing documents.  Whereas, the defense of waiver requires a homeowner to prove that the HOA failed to promptly remedy a sufficient number of similar violations throughout the community, so that the HOA’s related rules and regulations generally appeared to be waived.  The theory is that by failing to enforce some violations, the HOA induced other similarly situated homeowners to believe the association’s governing documents were no longer subject to enforcement.

To avoid these potential defenses, HOAs should act promptly to enforce the governing documents upon learning of a violation.  Although, it is important to note, that HOAs are not required to initiate litigation for every potential violation.  HOAs can, alternatively, enforce their governing documents without legal action via monetary penalties and/or the suspension of privileges.

When the board of directors discovers a violation, or is notified of the same, it should promptly investigate the matter to determine the best course of action to compel the homeowner’s compliance.  Before resorting to litigation, HOAs should always weigh the costs of litigation, the seriousness of the violation, and the likelihood of success at trial.  The board of directors possesses wide discretion to determine whether or not to move forward with litigation, so long as the board is acting in good faith and in the best interests of the association.  In the case of Beehan v. Lido Isle Community Association, the Court of Appeal held:

“The power to manage the affairs of a corporation is vested in the board of directors. Where a board of directors, in refusing to commence an action to redress an alleged wrong against a corporation, acts in good faith within the scope of its discretionary power and reasonably believes its refusal to commence the action is good business judgment in the best interest of the corporation, a [Member] is not authorized to interfere with such discretion by commencing the action…. ‘Every presumption is in favor of the good faith of the directors. Interference with such discretion is not warranted in doubtful cases.” (Beehan v. Lido Isle Community Association (1977) 70 Cal.App.3d 858, 865.)

California HOA lawyers If an HOA is uncertain as to whether the Statute of Limitations has expired for an outstanding homeowner violation, the board of directors should consult with its legal counsel to determine whether the HOA has the ability to remedy the outstanding violation through legal action, or to address such violation through alternative means.

-Blog post authored by TLG Attorney, Sarah A. Kyriakedes, Esq.

e7ed987e-8884-4dc3-b587-7584e9935b7d*New Case Law

The California Court of Appeal recently ruled on the case of Eisen v. Tavangarian (2019) 36 Cal.App.5th 626, which involved a view protection dispute between neighbors.  The Plaintiff Homeowners sued the Defendant Homeowners and alleged that Defendants’ remodeling violated several provisions of the HOA’s CC&Rs.

First, Plaintiffs pointed to the CC&R provision, which stated that only single-story family dwellings can be altered or erected, except for those two-story family dwellings that were initially approved by the Developer or Architectural Committee.  Plaintiffs argued that although the Defendants’ residence was an approved two-story home, it could not be later altered or modified to enlarge its silhouette.

Second, Plaintiffs pointed to the CC&R provision that prohibited architectural alterations without the Architectural Committee’s prior written approval.  This provision contained a clause that stated that the Architectural Committee’s powers expired in 1980.  The Plaintiffs argued that once architectural review expired, no architectural changes could be made since no entity existed to review said changes.

Lastly, Plaintiffs pointed to the restriction in the CC&Rs that prohibited “structures” from being erected that could potentially obstruct the view from another lot.

The trial court agreed that the Defendant violated the CC&Rs and ordered the Defendants to remove many of their architectural improvements, which detracted from the Plaintiffs’ view.  The trial court also ordered that the Defendants pay the Plaintiffs in the amount of $39,000.00 as interim damages for their view loss.

The appellate court disagreed and overruled a substantial portion of the trial court’s judgment.

As to the first provision of the CC&Rs, the Court of Appeal found that since Defendants’ second story home was initially approved by the Developer and/or Architectural Committee, this specific CC&R provision had no continuing authority.

As to the architectural review expiration clause, the Court of Appeals held that the absence of a reviewing entity meant that the Defendants no longer needed approval to make architectural changes.

Lastly, the appellate court interpreted the final provision of the CC&Rs to mean that all Homeowners were prohibited from building new structures that detracted from the views of other Homeowners, not that the Homeowners were prohibited from altering existing structures.  The term “structure” was interpreted to mean outbuildings, not primary residences.

As a result, the Defendants were permitted to maintain their home as remodeled with the exception of some hedges that needed to be trimmed.

California HOA lawyers This case demonstrates how different interpretations of the same provisions of the CC&Rs can vary greatly and produce drastically different results.  For this very reason, HOAs should consult with their legal counsel when interpreting and enforcing ambiguous CC&R restrictions.

-Blog post authored by TLG Attorney, Sarah A. Kyriakedes, Esq.

16106042-10158060050850114-2869680242197711700-n-1484846578*New Legislation

On July 30, 2019, SB 652 was signed into law by Governor Gavin Newsome in response to several incidents in which a homeowner’s association (HOA) asked a resident to remove a mezuzah from their unit’s entry door or doorframe.  A mezuzah is a small scroll that is affixed to the doorframe of Jewish homes to fulfill the mitzvah (Biblical commandment).  For observant Jews, this is not a choice, but rather, a religious duty.  Attempts to bar them from fulfilling this duty violated their religious freedom, argued Jewish residents.

In Connecticut, an HOA threatened to fine a resident fifty ($50) dollars if she did not remove the mezuzah affixed to her doorframe.  The HOA permitted religious displays (e.g. Christmas wreaths) on doors, but restricted any adornments from being placed on exterior walls.  The HOA argued that doorframes are considered exterior walls.

In Florida, an HOA ordered a resident to remove a mezuzah, citing its bylaws prohibiting owners and occupants from attaching, hanging, affixing or displaying anything on the exterior walls, doors, balconies, railings and windows of the building.

In New York, an HOA fined a resident fifty ($50) dollars for affixing a mezuzah to her doorframe shortly after she moved in.  The HOA cited its bylaws prohibiting residents from altering the exterior of their home without approval from the Association.  The rule included affixing of signs, advertisements or statuary.

While there were only a handful of instances nationwide in which a resident was asked to remove a mezuzah, the bill was designed to have a broader scope in protecting any displays of religious items on doors and doorframes so long as the display reflects “sincerely held religious beliefs.”  Specifically, SB 652 prohibits a “property owner” (defined to mean an HOA, an HOA board, or landlord) from adopting or enforcing any rule that prohibits the display of one or more “religious items” on an entry door or doorframe.  The bill defines “religious item” to mean any item displayed “because of sincerely held religious beliefs.”  The bill also identifies reasonable exceptions, such as allowing an HOA or landlord to prohibit the display of anything that threatens public health or safety, violates existing law, contains obscenities, hinders the opening or closing of any entry door, or is larger than 36” by 12” inches.  Also, an HOA may require a separate interest owner to remove a religious item as necessary to perform maintenance on a door or doorframe.

Prior to SB 562, federal and state law provided some protections against religious discrimination in housing, but the author of the bill believed that these protections were not sufficient enough to protect the display of religious items.   For example, the federal Fair Housing Act (FHA) prohibits housing discrimination on the basis of religion.  Likewise, the state Fair Employment and Housing Act (FEHA) makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the religion of that person. (Gov. Code § 12955.)  The Davis-Stirling Act, which regulates homeowner’s associations and common interest developments, contains a provision that prohibits the HOA governing documents from prohibiting the posting or displaying of noncommercial signs, posters, flags, banners, on or in an owner’s separate interest, subject to certain exceptions.  (Civil Code § 4710.)  To the extent that a “religious item” is a sign, poster, flag, or banner, one could argue that existing law already prohibits an HOA from adopting or enforcing any rule that bans the display of religious items.  But arguably there is a question of whether a mezuzah or cross hung from a door is a “sign.”  SB 562 eliminates that ambiguity by protecting any “item” which is displayed because of a sincere religious belief, whether or not it is a “sign.”

SB 652, which takes effect January 1, 2020, will likely conflict with many HOA policies, which have aesthetic and architectural rules that bar hanging anything on an entry doorframe.  According to the author of the bill, such restrictions from HOAs leave the affected people unable to freely practice their religious obligations and in some instances are forced to leave their residence and seek another place to live.  By passing this bill, California’s legislature has followed the recent trend in caselaw suggesting that the religious freedom of individuals should take precedence over the communal interests of homeowner’s associations.

California HOA lawyers Notwithstanding, it is important to note that the right afforded to HOA members and tenants in this bill is extremely limited, only applying to a “religious item” and, even then, only when the item is posted on an entry door or doorframe.  For instance, the bill would not provide protection to an owner who wanted to post a similarly-sized religious item in a window, or a door other than an “entry” door.   

-Blog post authored by TLG Attorney, Reuben D. Kim, Esq.

residential-packageAs security technology becomes less expensive and more accessible to average consumers, homeowners are provided with an exponential increase in available options for exterior security devices. A cursory Amazon search reveals hundreds of such devices including motion sensor lights and home camera offerings that can be accessed remotely from the convenience of one’s smart phone. Given the benefits and low cost, many homeowners have installed security systems in and around their residences to mitigate the risk of theft, property damage, and other criminal activity. As purchases and installations of these devices increase, associations and architectural committees are increasingly confronted with the conflict between the owners’ interest in safety and security, and the association’s interest in uniform aesthetics and neighborhood privacy.

Association Regulation and Liability

Most common interest developments are structured and organized where the association maintains the residence/building exteriors and has the ability to regulate improvements attached and/or integrally related to them. This authority generally includes the ability to approve or deny owner applications to install exterior security devices. Some associations with strict architectural approval procedures may be inclined to significantly limit or outright reject owner installed exterior security devices. However, this approach can expose an association to potential liability, especially where there is a demonstrated need for such devices.

In the case of Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, the California Supreme Court held that a homeowners association stands in relation to owners as a landlord and can be liable for breaches of traditional landlord duties such as failing to address unreasonable risks of criminal activity. The Court found that there was ample evidence to place the association on notice of an unreasonable risk to the plaintiff’s safety, and the failure to act or to allow the owner a self-help remedy subjected the association to liability.

In light of the holding in Frances T., associations should avoid outright prohibitions on owner installed exterior security devices. Instead, associations should develop and implement a comprehensive policy that governs the application, approval, and installation process for such devices. Such a policy allows the association to control the aesthetic characteristics, installation locations, and fields of view (for cameras) necessary to preserve the aesthetic appearance of the community, while preventing the devices from intruding into the seclusion of other residences and infringing privacy rights.

Exterior Security Device Policy

When developing an exterior security device policy, one of the primary considerations should be to limit the risk of invading the privacy of other residences. Generally, there is no recognized right of privacy in common areas. However, California acknowledges that privacy interests can be infringed through devices that provide a technological intrusion from otherwise lawful vantage points. Civil Code section 1708.8(b) states in pertinent part:

A person is liable for constructive invasion of privacy when the person attempts to capture, in a manner that is offensive to a reasonable person, any type of visual image . . . or other physical impression of the plaintiff engaging in a private, personal, or familial activity, through the use of any device, regardless of whether there is a physical trespass, if this image . . . or other physical impression could not have been achieved without a trespass unless the device was used.

Under the guidance of the foregoing prohibition against such privacy infringement, any approval of exterior security devices should be focused on ensuring that the primary purpose of the device is to advance the security interests of the applicant owner, and the device does not present an unreasonable risk of privacy invasion to other residences.

To limit the risk of privacy intrusions, a security device policy should contemplate the following requirements:

    1. An installation plot plan/map should be submitted by the applicant to indicate the intended installation locations and their corresponding fields of view for any visual recording devices such as cameras.
    2. Such fields of view should not be permitted to observe neighboring residences, exclusive use, or common areas. Depending on the development/community layout, some installations may not be possible without capturing some of the foregoing areas (such as a doorbell camera that points towards common area). The association body tasked with the review and approval of security device installations should ensure that in such cases, the primary purpose is to advance the security interests of the applicant and that any common area field of view is merely incidental and as limited as possible.
    3. Cameras must be “fixed view”, without panning capabilities.
    4. Finally, any approved installations should be revocable if the device violates the privacy of neighboring residences so as to constitute a nuisance.
California HOA lawyers Given the limitless permutations of common interest developments and their various layouts, there is no one size fits all approach to resolving the complex issues surrounding owner installation of exterior security devices. As such, consult with legal counsel to develop workable solutions to advance the association’s interests, while preserving the owners’ interest in security and privacy.

-Blog post authored by TLG Attorney, Tim D. Klubnikin, Esq.

zoning*Asked & Answered

Asked – We are thinking about granting a variance to the Covenants of our Homeowner’s Association.  The question is:  would the Variance, if granted, apply to the next landowner (i.e., does the grant of a variance run with the land)?

Answered – A homeowners association’s (“HOA’s”) governing documents may permit the HOA to, under limited and extraordinary circumstances, issue a variance from compliance with one or more of the HOA’s architectural standards. Because the decision to grant a variance has been held to be analogous to the issuance of a zoning variance by an administrative agency, HOAs are limited to granting variances in unique and extraordinary circumstances where substantial evidence would justify the desired variance. (See e.g., Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 652, quoting Topanga Assn. For a Scenic Community v. County of Los Angeles (1974) 11 Cal.3d 506, 517-18.)

For example, and with respect to zoning variances, said variances are granted “only when, because of special circumstances applicable to the property, including size, shape, topography, location or surroundings, the strict application of the zoning ordinance deprives such property of privileges enjoyed by other property in the vicinity and under identical zoning classification.” (Cal. Govt. Code § 65906.) Thus, it is the unique nature of the land and its surroundings which would justify the issuance of a zoning variance, not necessarily the individual desires of the property owner.

Cases which have discussed variances in the context of a HOA have not addressed the issue of whether architectural variances are perpetual in nature (i.e., whether the grant of a variance runs with the land and binds future property owners). As such, and given the Court’s treatment of architectural variances as being analogous to the issuance of a zoning variance, it is important to examine the scope of a zoning variance to determine whether said variance applies individually to the owner of the property when the variance is issued, or if it applies to the property upon which the variance is given and therefore runs with the land.

In Cohn v. County Bd. Of Supervisors, the California Court of Appeal held that a variance from the general plan of zoning for use of property was “not personal to the owner at the time of the grant, but [was] available to any subsequent owner….” ((1955) 135 Cal.App.2d 180, 184, quoting 62 C.J.S. § 547 (now 66 C.J.S. § 472.) In other words, the variance runs with the land and binds future owners. (Id.) Accordingly, given the similar treatment of architectural variances to zoning variances, it is reasonable to conclude that such architectural variances are not personal to the owner at the time of issuance by the HOA, but runs with the land and binds future owners of the property.

In light of the binding nature of architectural variances, there may be circumstances where it would be prudent for the HOA to document such variance through a recorded agreement or covenant. This is particularly important where the HOA’s approval is conditioned upon continued action by the property owners (e.g., maintenance and indemnification). Moreover, although the property owner would have an affirmative obligation to disclose the existence of any variance granted and/or any obligations imposed by the Association in connection therewith (see generally, Kovich v. Paseo Del Mar Homeowners’ Assn. (1996) 41 Cal.App.4th 863), a recorded agreement is the most dependable way of ensuring that future owners are on notice of the existence of the agreement and they assume upon purchase.

California HOA lawyers Board members must be cautious when granting variances to architectural standards, doing so only where extraordinary circumstances warrant. When a variance is granted, the Board should ensure that any conditions imposed on such approval is clearly stated in the Board’s decision, and, in some circumstances, documented in a recorded agreement. Accordingly, the foregoing highlight’s the importance of involving the HOA’s legal counsel to guide the Board in determining whether a variance should be documented by way of a recorded agreement.

-Blog post authored by TLG Attorney, Matthew T. Plaxton, Esq.

agriculture-berries-bunch-760281-e1551829548999In Eith v. Ketelhut (2018) 31 Cal.App.5th 1, a homeowners association featuring estate properties where members maintain fruit orchards and vineyards yielding fruit that can be made into wine and offered to the public for sale required the Board of Directors (“Board”) to determine if sale of products made from fruit produced on the property is a prohibited business or commercial activity under the CC&Rs. Looking to the purpose of the prohibition – to protect the residential character of the community – the Board examined whether the activity negatively impacted the residential character of the community.

In 2003 the Ketelhuts received approval from the Los Robles Hills Estates Homeowners Association’s (“HOA”) Architectural Committee (“Committee”) to plant landscaping on their property which included a vineyard of 600 plants. The Committee approved the Ketelhuts’ vineyard as it had approved other members’ avocado and fruit trees. The Ketelhuts did not mention using the grapes to make wine for sale. Five years later in 2008 the fruit was harvested and removed to an off-site winery to be made into wine. The Ketelhuts commenced a wine business in 2009, obtaining the necessary licenses, and began selling wine in 2010 over the Internet to the public and local restaurants and hotels. The Ketelhuts characterized the vineyard as a hobby, but they filed forms with the IRS claiming the vineyard as a “business.”

Eith and other neighbors demanded the Ketelhuts cease operating a commercial vineyard, so the Board investigated the Ketelhuts’ vineyard operation. The Board determined that the vineyard did not constitute business or commercial activity prohibited by the CC&Rs, because there was no negative impact on the community. No wine was produced or stored on the property, there was no tasting room drawing retail traffic to the community, and the wine was sold over the Internet to the public and local restaurants and hotels and shipped from an off-site warehouse.

Eith and other neighbors sued the Ketelhuts for operation of the vineyard as a prohibited business or commercial activity in violation of the HOA’s CC&Rs. The trial court elected not to decide whether the operation of the vineyard was a prohibited business or commercial activity, but to find in favor of the Ketelhuts by applying the rule of judicial deference adopted by the California Supreme Court in Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249 (“Lamden”) to the Board’s decision that the vineyard was not a prohibited use based “upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members.”

The neighbors appealed the decision in favor of the Ketelhuts to the California Court of Appeal, which confirmed the trial court’s application of the judicial deference rule in the Lamden case stating, “Common interest developments are best operated by the board of directors, not the courts.” The Court of Appeal further concluded that the Board correctly interpreted the CC&R prohibition of business and commercial activity. The purpose of the prohibition was to protect the community’s residential character; therefore, the prohibition does not encompass activity that has no effect on the community’s residential character.

California HOA lawyers The Board was in a much better position than the courts to evaluate the vineyard’s effect on the community and found that the residential character of the community was not impacted as a result of the growing and picking of the grapes on the property. No business or commercial activity of making and selling wine occurred on the property and offering the wine for sale over the Internet did not transform use of the property into a prohibited business or commercial activity. At all times the operation of the vineyard was fully consistent with residential use.

-Blog post authored by TLG Attorney, Terri A. Morris, Esq.

**New Legislationhoa-electric-vehicles

For the third time in past seven (7) years, the California Legislature has modified the laws governing the installation and use of Electric Vehicle (EV) charging stations within homeowners associations (“HOAs”). The first time was in 2011 when the Legislature enacted a new statute (now contained at Civil Code Section 4745) designed to nullify any provision in a HOA’s governing documents that prohibited homeowners from installing and using EV charging stations. In the following year, the Legislature then amended the law to give HOAs some regulatory authority in this area. That amendment served two (2) essential purposes: (1) it gave HOAs the ability to impose “reasonable restrictions” on the installation and use of EV charging stations, and (2) it clarified how the statute is primarily intended to apply to EV charging stations to be installed in a homeowner’s exclusive use/dedicated parking space.

This year (2018), SB 1016 was proposed by the Legislature. It makes some significant changes to Section 4745, and also adds new Section 4745.1 to the Civil Code to address EV Charging Station dedicated “TOU” (time of use) meters. Today, September 14, 2018, the Governor signed SB 1016 and its changes to the law will take effect January 1, 2019. The following information summarizes what HOAs should be aware of in the wake of SB 1016’s passage.

Changes to Existing Section 4745, effective January 1, 2019:

  • Section 4745(a) was amended to expand the scope of rights homeowners have to install EV charging stations. Homeowners will now have the right to install EV charging stations in their “units,” not simply their designated, exclusive use common area parking spaces. Some condominium developments are structured such that each “unit” is comprised of a residential element and a garage element.  Other developments actually include spaces within the deeds to the individual units. Thus, regardless of whether a homeowner’s designated parking space is within their unit’s garage, or within a portion of common area, the provisions of Section 4745 apply.
  • Section 4745(f)(1)(D) was amended to clarify that the homeowner has to pay for not only the electricity usage associated with the charging station, but also for the costs of installation of the station.
  • Section 4745(f)(3) was amended to relax the insurance requirements of homeowners who install EV charging stations. The $1,000,000 homeowner liability coverage policy requirement has now been replaced with a requirement for the homeowner to simply have “a liability coverage policy” without any specific amount listed. The requirement for the HOA to be named as an additional insured under the policy has also been deleted. **However, somehow the requirement under 4745(f)(1)(C) for the homeowner to, as a condition of approval, agree to provide a certificate of insurance which names the HOA as an additional insured has not been changed. In other words, the law now contradicts itself. Another “head-scratcher” from the California Legislature that should prompt a clean-up bill next year (we hope).
  • Section 4745(k) has been amended in a way that materially modifies the remedies available in enforcing Section 4745’s requirements. Prior to SB 1016, Section 4745(k) allowed for a prevailing plaintiff in an action to enforce Section 4745 to recover its attorney’s fees. The new law will change this language to allow recovery of attorney’s fees only when “a homeowner requesting to have an [EV] charging station installed and seeking to enforce compliance with [Section 4745]” is the prevailing plaintiff. In other words, regardless of whether the HOA is the plaintiff or the defendant, it will never be able to recover attorney’s fees in a lawsuit to enforce Section 4745 even where the HOA wins! This is the latest example of the Legislature’s willingness to modify the fee-shifting provisions of the Davis-Stirling Act to afford homeowners an advantage over their HOAs.

New Section 4745.1, effective January 1, 2019:

As referenced above, new Section 4745.1 will be added to the Civil Code effective January 1, 2019. It basically mirrors the provisions of Section 4745 (pertaining to EV Charging Station installations) in order to extend them to EV-dedicated “TOU” (time of use) meters. An EV-dedicated TOU meter is an electric meter supplied and installed by an electric utility, that is (a) separate from, and in addition to, any other electric meter, (b) is devoted exclusively to the charging of EVs, and (c) that tracks the time of use (TOU) when charging occurs. It is designed to aid utility companies in determining what price per kilowatt-hour should be charged for the use of an EV charging station at specific times of day.

Applications for the installation and use of EV-dedicated TOU meters must be processed in virtually the same way as applications for the installation and use of charging stations, except that the insurance requirements which apply to charging stations do not apply to EV-dedicated TOU meters. Section 4745.1 also requires HOAs to “attempt to find a reasonable way to accommodate” a request to install an EV-dedicated TOU meter, “unless the [HOA] would need to incur an expense.”

HOA law attorneys SB 1016 is the latest example of the Legislature’s continuing trend of promoting renewable energy technologies and limiting the regulatory authority of HOAs. In our prior blog posts and newsletters on EV charging stations, we have touched on the need of every HOA (especially condominium HOAs) to work with its HOA lawyer to implement rules designed to process homeowner requests for EV charging stations in ways that comport with statutory requirements. That need is even greater now. HOAs that violate Section 4745 and/or new Section 4745.1 are subject to civil penalties and damages.
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