A common interest development (“CID”) is a real property development where property owners share a common set of financial obligations, property and easement rights established in a set of recorded restrictions (commonly referred to as “CC&Rs”). Those restrictions require property owners within CIDs to “give up a certain degree of freedom of choice which [they] might otherwise enjoy in separate, privately owned property.” (Nahrstedt v. Lakeside Village Condo. Owners Assn. (1994) 8 Cal.4th 361, 374.) However, recorded restrictions are recognized as “an inherent part of any common interest development and are crucial to the stable, planned environment of any shared ownership arrangement.” (Nahrstedt, at 372.)
Defined Under the Davis-Stirling Act
The Davis-Stirling Act at Civil Code § 4100 defines a CID to include any one of the following:
- Community Apartment Project – this CID provides each property owner with an undivided ownership interest in the entire project as well as an exclusive right to lease an apartment within the project. (Civ. Code § 4105.)
- Condominium Project – this CID provides each property owner with an undivided ownership of a portion of the project together with an individual ownership interest in a separate interest in space called a condominium (or “condominium unit”). (Civ. Code § 4125.) The condominiums within condominium projects are typically structured as “airspace condominium units.”
- Planned Development – this CID is commonly utilized for single-family home communities. A planned development (or “PUD”) has either or both of the following: (a) common area that is owned by the association or by the property owners in common, and/or (b) common area and an association that maintains the common area with the power to levy and collect assessments. (Civ. Code § 4175.)
- Stock Cooperative – this CID in which a corporation is formed for the purpose of owning the development. The property owners are “shareholders” of that corporation and receive a right of exclusive occupancy in a portion of the development (a unit). (Civ. Code § 4190.)
CIDs may be developed and structured in numerous ways based upon the desired use and ownership composition of the CID (i.e., senior communities, highrises, lake developments, commercial developments, mixed-use developments, golf course developments, equestrian developments, etc.
Retroactive Application of Davis-Stirling Act
The Davis-Stirling Act applies to CIDs that were established prior to its enactment. (Villa De Las Palmas HOA v. Terifaj (2004) 33 Cal.4th 73, 95, FN.2.)
Must be Managed by Association
Maintenance of a CID’s common areas, as well as enforcement of its use restrictions, are actions fulfilled by the association (aka “HOA”, “owner’s association,” or “community association”) formed to manage the CID. CIDs are legally required to be managed by an association, and the association may be incorporated or unincorporated. (Civ. Code § 4800.)
Related Case Law
- Villa De Las Palmas Homeowners Association v. Terifaj
(2004) 33 Cal.4th 73
[CC&R Amendments; Binding Effect] CC&R amendments enacted by homeowners are accorded the same presumption of reasonableness as those imposed by developer; CC&R amendments are binding against both current and future homeowners.
- Nahrstedt v. Lakeside Village Condominium Association, Inc.
(1994) 8 Cal. 4th 361
[Governing Documents; Use Restrictions] CC&R restrictions are presumed reasonable, and are enforceable unless they are arbitrary, impose burdens on the use of land that outweigh their benefits, or violate public policy.