It’s our privilege to welcome La Costa Ridge Community Association to Tinnelly Law Group’s growing family of HOA clients.
La Costa Ridge is one of the most prestigious communities of luxury single family homes located in the city of Carlsbad. Sitting at one of the highest points in Carlsbad, residents enjoy views of the ocean, Catalina Island, and the surrounding open space.
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Our HOA lawyers and staff look forward to working with La Costa Ridge’s Board and management. |
It’s our privilege to welcome Canyon’s Edge Community Association to Tinnelly Law Group’s growing family of HOA clients.
Canyon’s Edge is a community of single family homes in the large master planned community of Turtle Ridge in the city of Irvine. With its hilltop setting Canyon’s Edge homes have views of the surrounding mountains and city night lights. Residents enjoy a large variety of amenities, including an Olympic size swimming pool, spas, cabanas, tennis courts, wading pool and a clubhouse.
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Our HOA lawyers and staff look forward to working with the Canyon’s Edge Board and management. |
In case you missed it, Issue # 49 of our ‘Community Association Update’ newsletter is available now!
Topics covered in this issue include:
A link to the newsletter is here.
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*Unpublished Opinion
Short term rentals (“STRs”), which are generally defined as rentals for periods of thirty days or less, are lucrative investments that have withstood the economic impact of the pandemic far better than traditional hotels due to the perception of them being a safer alternative. However, STRs in residential homeowners associations are known for burdening said HOAs with a revolving door of transient occupants on vacation who often do not observe the community’s rules, disturb the quiet enjoyment of other residents, who place more wear and tear on community amenities, and who arguably detract from the residential character of the neighborhood. Homeowners associations may restrict such short term, transient use of property through express and explicit provisions contained in recorded Covenants, Conditions and Restrictions (“CC&Rs”).
California case law has upheld HOAs’ authority to restrict STRs. (See Watts v. Oak Shores Community Association (2015) 235 Cal. App. 4th 466.) However, for such a restriction to be effective, the language in the CC&Rs must explicitly restrict STRs as demonstrated by a recent unpublished California Court of Appeals decision from the Fourth District, Lastavich v. Nob Hill Homeowners Association et al.(Case No. D075466) (“Nob Hill”), which held that the CC&Rs of a four-unit condominium HOA located in the City of Carlsbad did not operate to restrict STRs. The applicable language in the Nob Hill CC&Rs stated that each of the units were to “be used as a single family residence and for no other purpose or purposes.” The Nob Hill CC&Rs notably did not expressly prohibit commercial or business use of the property nor did they expressly prohibit STRs or transient use of the property.
Plaintiff, an owner in Nob Hill, sued the HOA and two other owners who had been regularly renting their units for less than thirty days, to enjoin such STRs claiming that the applicable restrictive language prohibited commercial enterprises including STRs. The trial court entered judgment in favor of the HOA and defendant owners, finding that “short term vacation rentals are not a business and that their use do[es] not violate the CC&Rs.” On appeal, the Fourth District affirmed the trial court’s decision. The appellate court’s decision was based on a “just and fair” interpretation of the CC&Rs conducted in favor of the unencumbered use of the property. Key to this interpretation were the undisputed facts that the plain language of the CC&Rs allowed for leasing, did not expressly prohibit short term or vacation rentals, did not expressly prohibit business or commercial use of the property (nor did it define STRs as a business or commercial use of the property), that owners had been renting the property on a short term basis for many years out in the open and with Plaintiff’s knowledge, and that the Declarant testified that she did not intend to prohibit or restrict STRs when she established the HOA.
Ultimately, the appellate court held that restrictions on the use of land cannot be “read into” CC&Rs by implication and determined that the CC&Rs did not expressly or implicitly prohibit or restrict the use of the units as STRs. The court noted that to restrict STRs at Nob Hill, the CC&Rs would only need a single sentence in the CC&Rs, when originally drafted in 1986 or as amended, to limit the rental of the Nob Hill units to a certain minimum number of days. The absence of such language presented a fatal defect in Plaintiff’s case.
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The key takeaway from Nob Hill for community associations is that California HOA’s cannot rely merely on a single-family use restriction in their CC&Rs to operate as a restriction on STRs. STRs do not automatically qualify as a business or commercial use of the property absent language in the CC&Rs defining them as such. Without language specifically prohibiting rentals for thirty days or less, a court will not likely read such a restriction into the CC&Rs. Although the passage of AB 3182, effective January 1, 2021, makes rental restrictions generally unenforceable, short term rental restrictions of thirty days or less are excepted. (Civil Code 4741(c)). Amending governing documents to comply with this new law by December 31, 2021 is required or HOA’s are subject to fines. (Civ. Code §4741(f)&(g).) Associations are encouraged to contact their counsel, both to comply with this new law, but also to ensure that enforceable, well-drafted STR provisions are incorporated into their CC&Rs in the process of such compliance. |
-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.
*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.
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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.
It’s our privilege to welcome Altis Master Association to Tinnelly Law Group’s growing family of HOA clients.
Altis is an award-winning active adult community by Pardee Homes located in the City of Beaumont. Residents enjoy a 16,000 sq. ft. Clubhouse, state-of-the-art Fitness Club and Flow Studio, Resort-Style Pool and Spa, Pickleball Courts, 22 acres of Parks & Natural Spaces, and views of the San Bernardino and San Jacinto mountain ranges.
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Our HOA lawyers and staff look forward to working with Altis’ Board and management. |
It’s our privilege to welcome Hampton Court Community Association to Tinnelly Law Group’s growing family of HOA clients.
Hampton Court is a condominium community located in the Butterfield Ranch area of Chino Hills. Residents enjoy a pool, spa, and picnic area.
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Our HOA lawyers and staff look forward to working with Hampton Court’s Board and management. |
When there is a potential for litigation regarding property damage, your association’s legal counsel will sit down with the Board of Directors to analyze whether the alleged property damage resulted from the association’s negligence in any form. If the association is put on notice of a potential negligence claim, it is advisable to immediately report the matter to your Commercial General Liability (“CGL”) insurance carrier.
For example, a popular homeowner concern is a common area roof leak. Upon notice of the alleged leak, it is the association’s duty to follow-up with the homeowner and initiate an investigation within a reasonable timeframe. (Corp. Code §7231(a)). The association has a duty under its governing documents to determine if the homeowner’s allegation of a common area leak is true or not (i.e., hire a leak detection specialist). Upon analyzing the specialist’s report, if it is determined there is a leak within the common area, the association is bound by its governing documents to fix it. (Civil Code §4775.) Note that in the common area roof leak scenario, the association would repair the common area roof, but not any interior or content damage. Therefore, the homeowner may sue under the CGL policy for any interior repairs and content damage on the basis the association failed to maintain the common area roof. The association looks to the CGL policy for the insurance company’s duty to defend and coverage of the loss.
Of course, investigations are time consuming and costly as they often require the contracting of knowledgeable experts. The CGL policy may kick in if there is a clear allegation that the association was negligent in failing to repair and maintain the association’s common areas as required under the governing documents.
However, what if the insurance adjuster denies the claim because it is not covered under the CGL policy or falls under one of the policy’s exclusions? This is where your legal counsel will dispute the adjuster’s argument and advocate why the CGL policy should cover the claim.
There are key provisions within the CGL policy that your attorney will analyze. “Property damage” and “occurrence” are two of the main terms insurance adjusters will often use to either provide or deny coverage under the Commercial General Liability policy.
“Property damage” usually means:
“Occurrence” usually means, “An accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
Most CGL policies will cover a potential property damage claim if: (1) the property damage is caused by an occurrence within the covered area; (2) the property damage occurs during the policy period; (3) the association did not have notice of the property damage occurring, in whole or in part; and (4) the claim was reported as soon as possible to the insurance company. Usually, property damage will be deemed to have been known to have occurred at the earliest time when the association received notice of an occurrence or a claim. Therefore, it is extremely important to notify the association’s insurance agent, property manager and your legal counsel as soon as possible if there is a potential for a claim.
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The above is but a snippet of a potential issue an HOA might face. For more on arguing bad faith claims, please see our blog post on Insurance Coverage Denied & Bad Faith Claims. |
-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.
It’s our privilege to welcome Savina Condominium Owners Association to Tinnelly Law Group’s growing family of HOA clients.
Savina is a brand new nigh-rise condominium community just steps away from Little Italy and the waterfront in downtown San Diego. Residents enjoy spectacular ocean and city views, indoor and outdoor lounge spaces with a beautifully landscaped pool and sun deck, generous spa, sauna and steam rooms, a theater room, pet retreat, and a state of the art fitness center.
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Our HOA lawyers and staff look forward to working with Savina’s Board and management. |
It’s our privilege to welcome Pacific Hills Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.
Pacific Hills is a community of custom single family homes in the City of Mission Viejo. This hilltop community commands views from the Pacific Coast to the west and the Saddleback Mountains to the east.
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Our HOA lawyers and staff look forward to working with Pacific Hills’ Board and management. |
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