HOA Lawyer Blog

HOA CC&Rs & Condo Plan Trump Conflicting Rights Conveyed in Deed

Published on: May 9, 2018 | by Steven J. Tinnelly, Esq.

hoa-parking-space *Unpublished Opinion

Homeowners Association (“HOA”) Boards of Directors and management professionals often encounter disputes with homeowners as to who has the right to use common areas parking spaces within a condominium development. Homeowners often believe that such spaces are part of their separately owned units (their separate property or “separate interest”); that the spaces were “deeded” to them and the HOA is therefore is limited in its ability to regulate, restrict, or reassign the use of those spaces. For most condominium projects, parking spaces are portions of common area which the HOA may—or in some instances must—reserve for a particular homeowner’s exclusive use, based upon the language of the HOA’s governing documents (i.e., the language of its CC&Rs and/or condominium plan).

We have seen instances where the deed to a unit that was conveyed to the homeowner by the initial developer of the HOA does include a reference to a particular common area parking space as assigned to the homeowner for her exclusive use. However, such deeds often parallel language in the HOA’s CC&Rs and/or condominium plan which support that exclusive use assignment. In other words, the language of the deed merely reiterates the applicable language of the CC&Rs and/or condominium plan establishing a particular parking space as a portion of common area for which the homeowner listed in the deed has exclusive use easement rights.

The situation becomes more complicated when the exclusive use language in the deed is ambiguous or is not supported by any provisions of the HOA’s governing documents. This was the central issue in Michaelson v. V.P. Condominium Corporation, No. D071215 (Cal. Ct. App. Feb. 21, 2018). The HOA in Michaelson consisted of an eleven (11) unit condominium development, in which each unit was granted an exclusive right to use an assigned garage parking space as defined in the HOA’s condominium plan. However, the condominium plan also denoted a 12^th unassigned garage parking space (“Unassigned Space”). For some reason, the right to use this Unassigned Space was actually listed in the deed (“Deed”) to a unit (“Unit”) that the HOA’s developer conveyed to the first homeowner of the Unit, which was later conveyed to the Plaintiff homeowner (“Homeowner”).

The HOA accused the Homeowner of fraudulently acquiring the Unassigned Space and demanded that he convey his interest in the Unassigned Space to the HOA. The Homeowner sued the HOA to quiet title on the Unassigned Space based on the following: (1) the Deed included the exclusive right to use the Unassigned Space; or in the alternative, (2) the Unassigned Space was acquired by adverse possession.

The Court quickly disposed of the Homeowner’s adverse possession claim because the tax for the Unassigned Space was paid for by all the HOA’s members and not by the Homeowner (one of the elements for an adverse possession claim in California requires claimant to have paid taxes on the property; See Code Civ. Pro § 325; See also Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal. App. 5^th 982).

With regard to the Deed, the Court found that it was ineffective as to the right of exclusive use of the Unassigned Space despite the fact that the HOA’s CC&Rs specified garage spaces as part of the “exclusive use common area.” This is because the CC&Rs tied the definition of exclusive use common area to the condominium plan, and the condominium plan did not define the Unassigned Space as exclusive use common area. The Court therefore held that the Unassigned Space belonged to the HOA as general common area, and as such the CC&Rs prohibit the transfer of the Unassigned Space without consent of 75% of the eligible mortgagees on the units.

The Court of Appeal affirmed the trial court’s order to grant the HOA’s motion for summary judgment plus attorney’s fees, holding that the Deed was a “wild deed” with ineffective conveyances that conflicted with the reservations contained in the CC&Rs and the condominium plan.

This case highlights the often forgotten importance of condominium plans. While CC&Rs will answer most questions regarding ownership and use rights, the CC&Rs for condominium projects will often relate to and reference the development’s condominium plan in significant ways.

-Blog post authored by TLG Attorney, Andrew M. Jun, Esq.

New Client: Rancho Tesoro Community Association

Published on: May 1, 2018 | by Steven J. Tinnelly, Esq.

Rancho-Tesoro We are proud to announce that Rancho Tesoro Community Association has selected Tinnelly Law Group as their associations’ legal counsel.

Rancho Tesoro is a new master-planned community by Brookfield Residential. Located in San Marcos, residents will enjoy a resort-style pool area, playground, BBQ pavilion, trails, and three private parks.

Our HOA attorneys and staff look forward to working with Rancho Tesoro’s Board and management.

New Client: Buena Vida Maintenance Corporation

Published on: April 24, 2018 | by Steven J. Tinnelly, Esq.

Buena-Vida We are proud to announce that Buena Vida Maintenance Corporation has selected Tinnelly Law Group as their associations’ legal counsel.

Buena Vida is a new active adult community by Del Webb. Located in Brea, residents will enjoy a clubhouse, fitness center, lounge, ballroom, catering kitchen, sparkling pool, spa and patio.

Our HOA attorneys and staff look forward to working with Buena Vida’s Board and management.

HOA Short-term Rental Rule Violated California Coastal Act

Published on: April 17, 2018 | by Steven J. Tinnelly, Esq.

hoa-coastal *New Case Law

The issue of short-term rentals (or “vacation rentals”) is becoming increasingly significant for homeowners associations (“HOAs”). The concerns and problems that arise from having revolving groups of vacation renters in HOAs are well-documented, such as the fact that vacation renters are often “less careful in using the common facilities because they are not concerned with the long-term consequences of abuse.” Watts v. Oak Shores Community Assn. (2015) 235 Cal.App.4th 466, 473.

To avoid these problems, many HOAs have lease restrictions within their governing documents such as a restriction which prohibits the rental or leasing of a property for a period of less than thirty (30) days. Such a restriction was adopted in 2016 by the coastal community of Mandalay Shores Community Association (“Mandalay Shores”), together with a schedule of significant fines that may be imposed on the owners of the roughly 1,400 homes in Mandalay Shores who violate the short-term rental rule. Two owners filed suit against Mandalay Shores seeking an injunction to stay the enforcement of the short-term rental rule, contending that the rule violates the California Coastal Act (Pub. Resources Code Sec. 3000 et. seq) (the “Act”).

The injunction was ultimately granted on appeal. The Court of Appeal noted that the Act was enacted to, among other things, “[m]aximize public access to and along the coast and maximize public recreational opportunities to the coastal zone consistent with sound resources conservation principles and constitutionally protected right of private property owners.” While Mandalay Shores did not erect a physical barrier to the beach, the Court believed that it erected a monetary barrier, which had the same effect.

The Court was not persuaded by Mandalay Shores’ argument that the short-term rental rule was to curtail parking, noise and trash problems. In his opinion, Acting Presiding Justice Yegan stated that such problems are to be addressed by the city and Coastal Commission: “The decision to ban or regulate [short-term rentals] must be made by the City and Coastal Commission, not a homeowner’s association.” Thus, in his opinion, a HOA may not adopt rules affecting “the intensity of use or access to single family residences in a coastal zone.” To read the Court’s holding in Greenfield v. Mandalay Shores Community Association, click here.

This case will have a profound effect on a HOA’s ability to adopt rules preventing short-term rentals in coastal communities. HOA attorneys and management professionals should be mindful of this case when receiving requests from coastal community clients to adopt/amend rules to include short-term rental restrictions.

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

New Client: Cielo Homeowners Association

Published on: April 10, 2018 | by Steven J. Tinnelly, Esq.

Cielo We are proud to announce that Cielo Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

Located in Rancho Santa Fe, Cielo inhabits one of the highest vantage points with elevations reaching over 1,450 feet. Many of the luxurious custom built homes and home sites have fabulous views of the surrounding mountains, the Pacific Ocean and south towards the Coronado Islands. It is surrounded by pristine and dedicated open space which adds to the appeal and privacy of the community.

Residents enjoy first class amenities including Club Cielo with catering facilites, a community park, fitness center, competition-sized pool, a children’s pool and play area, a spa, two tennis courts and much more.

Our HOA attorneys and staff look forward to working with Cielo’s Board and management.

New Client: Primrose at Beacon Park Neighborhood Association

Published on: April 3, 2018 | by Steven J. Tinnelly, Esq.

We are proud to announce that Primrose at Beacon Park Neighborhood Association has selected Tinnelly Law Group as their associations’ legal counsel.

Primrose at Beacon Park is a new courtyard condominium community by D.R. Horton. Located in Irvine, residents will enjoy a community park and pool.

Our HOA attorneys and staff look forward to working with Primrose’s Board and management.

Solar Panels on Common Area Roofs; Have a Policy Yet?

Published on: March 27, 2018 | by Steven J. Tinnelly, Esq.

hoa-condo-solar

The California Solar Rights Act (“Act”), found at Civil Code §§ 714 and 714.1, provides certain protections for homeowners seeking to install Solar Energy Systems (i.e., solar panels) on their properties (“Systems”). The intent of the Act was to prevent associations from broadly banning Systems for aesthetic reasons—whether through an explicit ban, or through onerous architectural restrictions that greatly increase System costs or reduce performance. To that end, the Act rendered void and unenforceable any provision of an association’s governing documents that “effectively prohibits or restricts the installation or use of a solar energy system.” Civ. Code § 714(b). The Act does permit associations to place “reasonable restrictions” on the installation or use of Systems, as defined in Civil Code § 714(b). However, in reality, those “reasonable restrictions” are extremely limited in scope. To illustrate, any restriction which increases the cost of a System by more than $1,000, or which decreases its performance by more than ten percent (10%), from what was originally proposed by the homeowner is not a “reasonable” restriction and therefore unenforceable. Civ. Code § 714(d)(1)(B).

For planned developments with detached homes, the application of the Act is relatively straightforward because it applied to Systems that were installed on a homeowner’s “separate interest.” However, what was less clear was the extent to which the Act applied to homeowners within condominium developments. In a condominium development, a System would not be installed within or upon a homeowner’s separate interest. Rather, the System would be installed on common area components such as the roofs, garages or carports.

This issue was at the heart of AB 634 which was signed into law in 2017. AB 634 amends Civil Code § 714.1 and adds Civil Code § 4746. Under the new law, which became effective January 1, 2018, associations are prohibited from establishing policies prohibiting the installation or use of Systems installed on the roof of the building in which the owner resides, or a garage or carport adjacent to the building that has been assigned to the owner for exclusive use. It also adds an exemption to the membership approval requirements associated with granting exclusive use of common area to allow for such grants for System installations. Civ. Code § 714.1(b)(1)-(2). In simple terms, condominium associations are no longer able to broadly prohibit Systems from being installed on common area roofs, garages or carports.

New Client: Islands Homeowners Association

Published on: March 20, 2018 | by Steven J. Tinnelly, Esq.

Islands We are proud to announce that Islands Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

The Islands HOA is an intimate community consisting of 117 beautiful California-style homes. Located in Aliso Viejo, this community has close and easy access to schools, family recreation, arts, entertainment, and business centers.

Our HOA attorneys and staff look forward to working with Islands’ Board and management.

New Client: Cinnamon Hollow Homeowners Association

Published on: March 13, 2018 | by Steven J. Tinnelly, Esq.

Cinnamon-Hollow We are proud to announce that Cinnamon Hollow Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

Cinnamon Hollow is a condominium community in Anaheim. Residents enjoy a pool, spa, and close proximity to shopping, restaurants, and transportation.

Our HOA attorneys and staff look forward to working with Cinnamon Hollow’s Board and management.

Attorney’s Fees and Costs are not Available to a Moving Party who Secures Interim Injunctive Relief

Published on: March 6, 2018 | by Steven J. Tinnelly, Esq.

Court-Trial Preliminary injunctions are temporary court orders requested by one party that prevents another party from pursuing a particular course of conduct until the conclusion of a trial on the merits. A preliminary injunction is proper where the moving party proves the following two factors: (1) the likelihood that the moving party will ultimately prevail on the merits at the time of trial; and (2) that relative interim harm to the parties from issuance of the injunction weighs in that party’s favor.

Occasionally, HOAs seek preliminary injunctions as a means to enforce the HOA’s governing documents. Among other reasons, the purpose behind that request for judicial relief is to restrain homeowner actions or omissions when such conduct potentially poses a threat of harm or risk to Association Property or the Association’s Members. Examples include a homeowner’s unauthorized alteration of structural common area components (e.g. removal of a bearing wall within a condominium unit; unapproved building activities on common area property).

Under the Davis-Stirling Common Interest Development Act (“Act”), at the conclusion of a trial on the merits, the prevailing party shall be awarded reasonable attorney’s fees and costs in an action to enforce the HOA’s governing documents (Civil Code Section 5975). Historically, there has been some question as to whether a moving party may recover statutory attorney’s fees and costs if the court grants a preliminary injunction in a HOA enforcement action. In January 2018, the California Court of Appeal addressed that issue in the case of Artus v. Gramercy Towers Condominium Association (19 Cal.App.5^th 923).

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