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SB-222 (Wiener) Residential heat pump systems: water heaters and HVAC: installations.

Would make any provision of the governing documents or architectural guidelines void and unenforceable if it prevents the replacement of a fuel-gas-burning appliance with an electric appliance, or prohibits or restricts the use of a residential heat pump water heater or heat pump HVAC system.

Current Status: Pending

FindHOALaw Quick Summary:

The Davis-Stirling Act makes void and unenforceable any provision of the governing documents or architectural or landscaping guidelines or policies that prohibits, or has the effect of prohibiting, the use of low water-using plants as a group or as a replacement of existing turf.

This bill would add Civil Code Section 4737 to make void and unenforceable any provision of the governing documents, architectural guidelines, or policies if the provision prevents the replacement of a fuel-gas-burning appliance with an electric appliance. The bill would also make any covenant, restriction, or condition contained in any deed, and any provision of a governing document, that effectively prohibits or restricts the installation or use of a residential heat pump water heater or heat pump HVAC system, void and unenforceable.

View more info on SB 222
from the California Legislature's website

Woolard v. Regent Real Estate Services, Inc.

(2024) 107 Cal.App.5th 783

[Neighbor Disputes; Duty of Care] HOAs do not have a duty to resolve disputes between homeowners outside the confines of the HOA’s governing documents.

Eric Woolard and Breonna Hall, in pro. per., for Cross-complainants and Appellants.

Murchison & Cumming and Darin W. Flagg for Cross-defendants and Respondents.

OPINION

MOORE, Acting P. J.—

This is an appeal following summary judgment in favor of cross-defendants and respondents Regent Real Estate Services, Inc. (Regent), a management company, and Greenhouse Community Association (Greenhouse), a homeowners association. Regent and Greenhouse were unfortunately dragged into litigation that should have remained between two sets of homeowners-Eric Woolard and Breonna Hall, the defendants and cross-plaintiffs on the one hand, and plaintiffs and cross-defendants Eric Smith and Stacy Thorne on the other.^[1] As relevant to this appeal, the trial court properly granted summary judgment to Regent and Greenhouse on Woolard and Hall’s cross-complaint. On appeal, Woolard and Hall only raise the negligence cause of action. Woolard and Hall have failed to establish, or even articulate, a duty of care that was breached by Regent and Greenhouse.

Woolard and Hall also claim the trial court erred by striking multiple attempts to disqualify the trial judge. These claims are not reviewable on appeal. Accordingly, the judgment is affirmed.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

BRIEFING

We must, unfortunately, begin by noting that Woolard and Hall’s sole brief does not comply with the California Rules of Court. Each brief must “[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears.” (Cal. Rules of Court, rule 8.204(a)(1)(C).) “`It is the duty of a party to support the arguments in its briefs by appropriate reference to the record, which includes providing exact page citations.'” (Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856 [85 Cal.Rptr.2d 521]; see Stover v. Bruntz 786*786 (2017) 12 Cal.App.5th 19, 28 [218 Cal.Rptr.3d 551].) If facts are not supported by correct record citations, the party’s arguments may be deemed waived. (Ibid.)

The section labeled “Statement of Facts” in Woolard and Hall’s brief does not include a single reference to the record; it is, essentially, useless to us. The record in this case exceeds 1,200 pages, and it is not our role to go through the record, page by page, searching for the facts that support Woolard and Hall’s assertions.

While we could exercise our discretion to deem Woolard and Hall’s arguments waived and dismiss the appeal, in the interests of justice, we shall do our best to review their arguments. If, however, we cannot locate a fact they assert exists, that fact will be deemed unsupported by the record.

II.

UNDERLYING FACTS

We draw the facts from Regent and Greenhouse’s brief, as supported by references to the record, particularly the separate statement of undisputed material facts (separate statement) submitted in support of their motion for summary judgment.

Woolard and Hall were residents at Greenhouse, as were Smith and Thorne. Both were apparently tenants in their respective units. In 2020, Smith and Thorne filed suit against Woolard and Hall and Regent, among others, for negligence, numerous intentional torts, and premises liability for an incident that occurred on Greenhouse property in December 2019. According to the complaint: “On December 27, 2019, Eric Smith and Stacy Thorne were at their residence located at Greenhouse Condominiums. Plaintiffs’ next door neighbors, [Woolard and Hall], started an argument with Plaintiffs Smith and Thorne which escalated to a physical altercation.” Smith and Thorne alleged punching and kicking, assault with a flashlight, and stabbing Smith, allegedly resulting in severe physical, mental, and emotional injuries.

Subsequently, Woolard and Hall filed a cross-complaint and a first amended cross-complaint, naming both Regent and Greenhouse as cross-defendants. According to them, the physical altercation was the result of long-standing harassment by multiple neighbors. As to Regent and Greenhouse, Woolard and Hall pleaded causes of action for indemnification, apportionment of fault, general negligence (as to both Regent and Greenhouse) and interference with economic relations (as to Greenhouse only). They sought general and punitive damages.

787*787 We reproduce the statement attached to the negligence cause of action included in the complaint in full: “On December 27, 2019, Breonna Hall and Eric Woolard were residents in a unit owned by and rented by co Defendants Terry Eunson and Peter Eunson, at the Greenhouse Condominiums, a residential property controlled by the Defendants Greenhouse Community Association.”

The narrative continues on the next page:^[2] “The extent of the harassment went as far as late night walks around their back gates around in attempt to provoke their dogs to bark, then files [sic] complaints with the city for their dogs being a nuisance, and sending violation letters with threats of fines, then ultimately lead to an assault and humiliation of Defendant’s [sic] Woolard and Hall. [¶] The actions of president Jo Hanson, were outrageous as she used another member in the community two doors down from Defendants Hall and Woolard’s home, to obtain information about Woolard and Hall whereabouts and activities, on a daily basis, consistently throughout the day, and encouraged the neighbors to intimidate and record the residents to impose unwarranted fines, and cause the residents and owners emotional distress and grief. [¶] Defendants Hall and Woolard informed Terry Eunson of these issues, consistently as the harassment occurred from every minor incident to every serious disturbance. Terry Eunson emailed Regent Management, sending dozens of emails to Regent Real Estate regarding these never ending issues. [¶] Despite Defendants Regent, Greenhouse, and The Eunsons all failed to provide adequate help resolving issues that escaleted [sic] into a physical altercation inside the defendants and cross complainants Woolard and Hall[s] home, in front of their small children. [¶] The physical injuries sustained and the mental anguish and emotional trauma Woolard and Hall have suffered could have been prevented had the situation been handled properly by Regent, Greenhouse and The Eunsons, instead the problems were ignored and provoked Woolard and Halls complaints were disregarded as Greenhouse took part in contributing to the issue instead of stopping it.”

The narrative continues: “Regent disregarded their obligations and responsibilities in the matter as well ignored the emails sent to inform them of the outrageous and unexceptable [sic] behaviors, acted the the [sic] parties. Regent failed to ackowledge [sic] the Communitys [sic] lack of ethical duties on part of the Greenhouses Directors and chose to deliberatley [sic] ignore every initiation of the behaivor [sic] of members in the commununity [sic], which lead to Woolard and Hall having to be forced to act to protect themselves and their children while being attacked inside their home. Then arrested and evicted from their home, while out on bail, and during a pandemicc [sic] forced on the streets with a new born and two toddlers the 788*788 defendants sustained extreme mental distress and emotional harm. Woolard and Hall have suffered and still suffer mental anguish, humiliation, shame, anxiety, and worry about how theyve [sic] been destroyed financially and emotionally devestated [sic] by the actions and the events herein.”

A successful demurrer dismissed the claim for interference with economic relations, and Woolard and Hall subsequently dismissed the causes of action for indemnification, apportionment of fault, and declaratory relief as to Regent only.

III.

MOTIONS TO DISQUALIFY

Woolard and Hall filed numerous motions to disqualify the trial judge, Honorable Kimberly A. Knill, who was assigned to the case on December 19, 2022, effective January 19, 2023.

The first peremptory challenge was denied as untimely on January 18, 2023. Only the minute order denying the motion is included in the record.

A second request to disqualify Judge Knill was filed on June 2, 2023, alleging the judge could not be impartial. Judge Knill issued an order striking the motion to disqualify, and in the alternative, a verified answer. Woolard and Hall filed a verified statement in support of their objection to the judge, with a declaration by Woolard, on June 21. On June 23, Judge Knill issued an “order striking the statement of disqualification.” (Capitalization & boldface omitted.) No writ review of these rulings was sought.

IV.

DISCOVERY RESPONSES

In Woolard’s interrogatory responses, when asked for the facts supporting Regent’s negligence, he responded that Regent “refused to assist or respond to any complaints,” refused to investigate complaints, “sent out multiple letters falsely accusing [Woolard and Hall] of violating the CC&Rs,” and “refused to take any steps to deescalate the situation.” He also claimed Regent had committed housing discrimination under federal law. Instead, the community manager had advised Woolard and Hall that they do not handle neighborly disputes, and should contact the local police department.

Woolard provided a similar answer as to Greenhouse. “Regent and Greenhouse refused [to] address the matters, refused to contact the individuals 789*789 whom claims were being made against, even despite the clear descriptions of having the complaints mentioned documented on video …” and accused Greenhouse of violating federal housing discrimination law.

MOTION FOR SUMMARY JUDGMENT

In April 2023, Regent and Greenhouse filed a joint motion for summary judgment or alternatively, summary adjudication, on Hall and Woolard’s remaining claims. Regent contended, “Regent was reasonable in all of its actions as to Hall and Woolard and did not otherwise owe a duty of care to contact police or intervene in the dispute with Plaintiffs” and Greenhouse argued that “Hall and Woolard cannot prevail on their remaining claims for Indemnification, Apportionment of Fault, Declaratory Relief and General Negligence against Greenhouse, as Greenhouse was reasonable in all of its actions as to Hall and Woolard and did not otherwise owe a duty of care to contact police or intervene in the dispute with Plaintiffs.”

Greenhouse and Regent moved for summary judgment on the remaining claims—negligence only as to Regent, and negligence, indemnification, and apportionment of fault as to Greenhouse. Robert Griswold, offered as an expert witness on homeowners association matters, submitted a declaration stating that neither Regent nor Greenhouse had fallen below the standard of care in discharging their duties relating to the instant matter. Neither Regent nor Greenhouse had an obligation to involve the police on behalf of community members or tenants. Further, they did not have a responsibility or obligation to intervene and stop acts of physical violence, or to act as peacemaker in the community.

“The standard of care for a homeowner association, such as Greenhouse, and a management company, such as Regent, is that neither should or would be expected to intervene in a neighbor-to-neighbor dispute, as a homeowner association or management company is not a security guard or peacemaker for neighbor-to-neighbor disputes. To the extent any intervention is felt necessary by one of the parties, such intervention would need to come from a combination of the police and/or the legal system, and not from the homeowners association and/or management company. As such, any alleged failure by Regent and/or Greenhouse to intervene in the neighbor-to-neighbor dispute between Hall and Woolard on one side and Smith and Thorne on the other side does not fall below the standard of care.” Finally, Regent and Greenhouse had reasonably responded and investigated any complaints made by Woolard and Hall. “The standard of care for a homeowner association, such as Greenhouse, and a management company, such as Regent, is that if a 790*790 complaint or alleged violation of the rules is received from a resident, then the complaint is to be investigated and provided with a response. Regent and Greenhouse met this standard of care in investigating and responding to the complaints received from Hall and Woolard. This is evidenced by the replies to the communications received from Hall and Woolard.”

Woolard and Hall filed an opposition to the motion for summary judgment. They characterized Griswold’s declaration as by someone “who was paid to sign a declaration.” The opposition also contended they had never alleged that Greenhouse had any duty to contact the police or intervene in the dispute with Smith and Thorne. “Cross-complainants have never stated they ever even expected Cross-defendants to contact or call the police of [sic] make any contact for them or on their behalf, regarding any dispute at all.” Instead, they asserted harassment by Regent and Greenhouse.

The hearing went forward on June 26, 2023, and the court indicated it tentatively intended to grant the motion, and it did so after hearing arguments and taking the matter under submission.

The court’s order accepted Regent and Greenhouse’s contention that they had no duty to intervene in the neighbor dispute or prevent the physical altercation between Woolard and Hall on one side and Smith and Thorne on the other. Duty is a question of law, and Woolard and Hall had not established a legal duty to intervene in a dispute between residents. Nor had they established housing discrimination based on the fact that they have children. The court also concluded the claims for indemnification, apportionment of fault, and declaratory relief were not legally cognizable claims and no triable issues of material facts existed.^[3] The court filed a judgment on July 13, 2023.

DISCUSSION

SUMMARY JUDGMENT FRAMEWORK AND STANDARD OF REVIEW

“Summary judgment is appropriate `if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ [Citation.] To prevail on the motion, a defendant must demonstrate the plaintiff’s cause of action has no merit. This requirement can be satisfied by showing either one or more elements of the cause of action cannot be established or that a complete 791*791 defense exists.” (Beltran v. Hard Rock Hotel Licensing, Inc. (2023) 97 Cal.App.5th 865, 876 [315 Cal.Rptr.3d 842] (Beltran).)

“`[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.’ [Citation.] `A prima facie showing is one that is sufficient to support the position of the party in question.’ [Citation.] `There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.'” (Beltran, supra, 97 Cal.App.5th at p. 877.)

“In performing our de novo review, we use the same procedure as the trial court. We first consider the pleadings to determine the elements of each cause of action. Then we review the motion to determine if it establishes facts, supported by admissible evidence, to justify judgment in favor of the moving party. Assuming this burden is met, we then look to the opposition and `decide whether the opposing party has demonstrated the existence of a triable, material fact issue.’ [Citation.] We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Beltran, supra, 97 Cal.App.5th at p. 877.)

II.

THE DUTY ELEMENT

As noted above, the pleadings determine the elements of the cause of action, which in this case, is negligence. “The elements of a cause of action for negligence are duty, breach, causation, and damages.” (Melton v. Boustred (2010) 183 Cal.App.4th 521, 529 [107 Cal.Rptr.3d 481].)

We begin with duty. “Duty `is an essential element’ of the tort of negligence. [Citation.] Duty `may be imposed by law, be assumed by the defendant, or exist by virtue of a special relationship.’ [Citation.] The existence of a legal duty `”`depends upon the foreseeability of the risk and a weighing of policy considerations for and against imposition of liability.'”‘” (Melton v. Boustred, supra, 183 Cal.App.4th at pp. 529-530.) Regent and Greenhouse contend they acted within the scope of their duties and did not owe Woolard and Hall any further duty; accordingly, they are not liable for negligence as a matter of law, and no triable issues of material fact exist.

792*792 We must start by asking just what duty Woolard and Hall seek to impose on Regent and Greenhouse. Their opposition to the motion to summary judgment specifically disclaimed the notion that they were seeking to impose a duty on Regent and Greenhouse “to contact or call the police of [sic] make any contact for them or on their behalf, regarding any dispute at all.” Their brief, when discussing this point, does not have much to offer other than pages of boilerplate law on general principles of duty and foreseeability, of which this court is well aware. They argue that the foreseeability of harm could not have been clearer, but that only begs the question. “[T]hrough their managing agents Regent, Greenhouse Association knew or should have known of the repeated verbal and physical assault and battery incidents occurring against” them. But what duty did they have other than calling the police, if there was potential or ongoing criminal activity? They do not tell us. They spend much time arguing about foreseeability of the harm, but foreseeability alone is not enough. (McGarry v. Sax (2008) 158 Cal.App.4th 983, 997-998 [70 Cal.Rptr.3d 519].)

The admissible evidence we have before us is the declaration of an expert in homeowners associations, who stated under oath that an association’s duty of care does not include mediating, deescalating, or resolving disputes between neighbors. Nor do Woolard and Hall cite any cases that have held differently. Instead, they cite two cases involving a landlord’s duty to a tenant, O’Hara v. Western Seven Trees Corp. (1977) 75 Cal.App.3d 798 [142 Cal.Rptr. 487] (duty to reasonably secure common areas against third party criminal activity), and a case involving a college’s duty to a student, Peterson v. San Francisco Community College Dist. (1984) 36 Cal.3d 799 [205 Cal.Rptr. 842, 685 P.2d 1193] (duty to exercise reasonable care toa prevent assaults on campus) that are both inapplicable here.

Further, there is the issue that Woolard and Hall were tenants, but not owners and members of the association. They are, accordingly, in a very limited relationship with Greenhouse (and Regent as its managing agent). They have no legal standing to maintain a complaint that Greenhouse failed to adequately enforce its own governing documents. (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1035-1038 [93 Cal.Rptr.3d 405].) Thus, Greenhouse’s duties to Woolard and Hall are more limited than they would be if they were owners.

Woolard and Hall also contend that the trial court made “[c]onflicting rulings,” referring to a motion for summary judgment brought by their landlords as to Smith and Thorne’s claims against them. (Underscoring omitted.) Their landlords, however, are situated differently because their duties as landlords are different. Further, the fact that their landlords failed to meet their burden on summary judgment has no bearing on whether Regent 793*793 and Greenhouse met theirs. They did, and Woolard and Hall failed to establish the existence of a duty as a matter of law. Their negligence claim cannot proceed without it.

Woolard and Hall’s claims of “housing discrimination” are similarly flawed. First, any claim for housing discrimination is not negligence, and it should have been raised as a separate cause of action. Second, despite their repeated claims of “discrimination,” they offer no evidence that any conduct by Regent or Greenhouse was motivated by discriminatory animus based on their membership in a protected class.

The only evidence Woolard and Hall point to are letters sent to them (or possibly their landlords). The letters they state establish discrimination include complaints about “family members engag[ing] in recreation activities in the driveway.” Another stated that “it was reported that your children were playing in and around the driveway, in and out of the driveway in the path of the vehicles driving in the complex. No adult su[p]ervision was noticed, and in the September meeting you were informed that the driveways are never a play area and can be very dangerous, it is a safety [issue].”^[4] Greenhouse sending letters about this subject is simply insufficient to establish a triable issue regarding discrimination under state or federal law, even if it were possible to bring a discrimination claim under the guise of negligence, which it is not. Further, Woolard and Hall offer no connection between those complaints and the alleged violent incident that led to this lawsuit, which is required to proceed under a negligence cause of action.

In sum, there is simply no law to support Woolard and Hall’s contentions that Regent and Greenhouse had some unspecified duty to do something to prevent what turned into an allegedly violent dispute. Imposing a duty on homeowners associations or their managing agents to intervene and attempt to resolve disputes between homeowners (or their tenants) would place an untenable burden on these entities. Run by volunteers, they already have enough (and some would argue too much) authority and responsibility. Associations do not have police powers or subpoena power. They cannot compel owners, much less tenants of owners, to sit down and work out their differences, and they cannot adjudicate differences except in the limited context of violations of the association’s governing documents. There was evidence here, in the form of Griswold’s declaration, that the association properly responded to complaints about violations of governing documents that it received.

794*794 Imposing a duty under these facts would leave associations liable for the outcome of such disputes without the tools to prevent them. This would leave ordinary homeowners holding the bag when special assessments were needed to pay judgments or attorney fees. Regent and Greenhouse played no part in the physical altercation at issue here and should never have been dragged into this dispute.

Accordingly, we find no existing duty of care was breached and decline to recognize a new duty of care requiring a homeowners association or its management company to involve itself in disputes between homeowners outside the confines of the governing documents. Summary judgment was properly granted as to both Regent and Greenhouse.

III.

DISQUALIFICATION

The requests for disqualification are not reviewable on appeal. “The determination of the question of the disqualification of a judge is not an appealable order and may be reviewed only by a writ of mandate from the appropriate court of appeal sought only by the parties to the proceeding.” (Code Civ. Proc., § 170.3, subd. (d); see Curle v. Superior Court (2001) 24 Cal.4th 1057, 1063 [103 Cal.Rptr.2d 751, 16 P.3d 166]; Daniel V. v. Superior Court (2006) 139 Cal.App.4th 28, 39 [42 Cal.Rptr.3d 471].) Woolard and Hall never sought writ review, and we have no jurisdiction to review this matter on appeal from a final judgment.

DISPOSITION

The judgment is affirmed. Greenhouse and Regent are entitled to their costs on appeal.

Goethals, J., and Motoike, J., concurred.

[1] Smith and Thorne are not part of this appeal.

[2] It is possible some intended text was missing here, but the pages are consecutively numbered, and we simply cannot tell.

[3] Woolard and Hall state explicitly that they are not seeking review of these three causes of action.

[4] Woolard and Hall also cite to e-mails sent by their landlord to the property manager about various subjects. The e-mails are mostly about other subjects, and their landlord’s subjective views and hearsay statements are not admissible evidence of anything that might be helpful to them.

Ridley v. Rancho Palma Grande Homeowners Association

(2025) 110 Cal.App.5th 788

[Business Judgment Rule; Reasonable Investigation; Bad Faith] The business judgment rule and rule of judicial deference will not shield an HOA Board from liability where it fails to conduct a reasonable investigation and/or acts in bad faith.

Horvitz & Levy, Andrea M. Gauthier, Scott P. Dixler; Sims, Lawrence & Broghammer, Bobby Dale Sims, Jr., and John T. Hill for Defendants and Appellants.

O’Hara Creech, Terence J. O’Hara and Mary Ann O’Hara for Plaintiffs and Respondents.

OPINION

BROMBERG, J.—

This appeal is from an injunction requiring supplemental repairs to a condominium. The underlying suit arises out of flooding in the crawlspace beneath the condominium owned by Doug Ridley and Sherry Shen. Because this crawlspace is a common area controlled by the homeowners’ association, Rancho Palma Grande Homeowners Association (HOA), the HOA rather than the homeowners was responsible for investigating and remedying the water intrusion. The HOA took more than 19 months to remove the water and begin making meaningful repairs, and in the interim the homeowners’ unit suffered severe damage. Accordingly, the homeowners sued the HOA and its now-former president, Steve Moritz.

After an unusually long bench trial lasting more than 60 court days, the trial court found in favor of the homeowners on all their claims. While many repairs were subsequently performed, others were not, and the trial court issued an injunction requiring the HOA to perform the remaining repairs and compensate the homeowners for lost rent and other expenses.

The HOA and Moritz appeal, arguing that the trial court erred in finding in the homeowners’ favor on any of their claims. We need address only one claim: that the HOA breached its duties under the condominium complex’s covenants and conditions. As explained below, we conclude that the trial court properly found in the homeowners’ favor on this claim. Because this claim supports the injunction being appealed, we affirm.

[792] I. BACKGROUND

A. The CCRs

Rancho Palma Grande is a condominium complex in Santa Clara with over 100 units. In 1981, the complex’s developers executed a Declaration of Covenants, Conditions and Restrictions (the CCRs) dividing the development into condominiums and establishing a “Home-Owners Association” to manage the complex.

The CCRs grant the HOA a number of powers and duties. One set concerns the maintenance and repair of common areas: The CCRs grant the HOA the power and the duty “[t]o manage, operate, maintain, repair, paint, landscape, care for and preserve the Common Area, and all its facilities, improvements, and landscaping ․ to the standard of maintenance prevalent in the neighborhood ․”

The CCRs contain an exculpation clause limiting the HOA’s liability. Under the clause, the HOA generally is not liable for property damage or personal injury “caused by the elements” or “resulting from electricity, water, rain, dust, or sand which may leak or flow from outside or from any parts of the buildings.” However, this limitation on liability does not apply to damage or injury “caused by gross negligence of the Association.”

In 1991, Doug Ridley, who is now 85 years old, purchased a unit in Rancho Palma Grande located at 2006 Stone Pine Court (the homeowners’ unit). Ridley later married Sherry Shen, and the two lived in the homeowners’ unit for a decade before they moved out and began renting the unit for retirement income.

In 2017, Steve Moritz became president of the HOA.

B. The Undestroyed Well

The April 2018 Flooding

In April 2018, tenants in the homeowners’ unit reported flooding in the crawlspace underneath the unit. The homeowners and the HOA initially thought that the water was from a leaky pipe, which is an owner responsibility. However, a plumber hired by the homeowners did not see anything wrong with the plumbing and concluded that the water came from an underground well or spring. In addition, a plumber hired by the HOA learned from the City of Santa Clara (City) that the water was likely caused by an abandoned but undestroyed well. Because the crawl space is a common area, the HOA [793] accepted responsibility for remedying the water that intruded into it from outside the homeowners’ unit. However, the HOA permitted the homeowners to finish installing a sump pump to remove some of the water.

Initial Opinions and Recommended Actions

In May 2018, hoping to get the City or the Santa Clara Valley Water District to pay for remediating water in the crawlspace, the HOA hired a law firm. The firm contacted the Water District, which reported that it, too, believed that the water was from “an unknown, unregistered well.” The Water District also gave the firm a map showing where there likely was an abandoned but undestroyed well from a farm previously on the land where Rancho Palma Grande is now located. In addition to giving the map to the HOA, the law firm advised the HOA to take “all steps ․ to avoid further damages from the water flow under the unit” because of the “exponential costs involved if not properly addressed.”

In early June, a water restoration consultant, the Anderson Group, recommended that the HOA dry out the crawlspace to reduce the risk of mold developing in the homeowners’ unit. The Anderson Group proposed to use air movers, scrubbers, and filtration devices at a total cost of a little over $7,000. The HOA rejected the proposal. The HOA also received a report finding high moisture levels and mold in the homeowners’ unit and recommending remediation measures. However, the HOA did not implement the recommendations.

A series of drilling contractors confirmed to the HOA that there was likely an undestroyed well underneath or near the homeowners’ unit. In early July, the Pitcher Well Drilling Company informed the HOA that there appeared to be a well either under or close to the rear foundation of the homeowners’ unit. However, Pitcher’s excavator was so large that it could not be used to dig for the well without causing major damage to the homeowners’ unit.

Later in July, a second drilling contractor, Dan Lynch, estimated that it would cost $7,500 to open the floor of the homeowners’ unit with a mini-excavator, dig into the crawlspace, and expose the suspected wellhead. The HOA rejected this proposal. In August, Lynch examined the crawlspace and discovered a hole full of water with bubbles coming up, a sign of a well, which Lynch believed was either under the crawlspace or just outside the rear foundation. Lynch advised the HOA that the hole could continue to grow and sink, and the HOA should move quickly to avoid any further deterioration. Lynch offered, at a cost of $150 per hour, to research historical documents and attempt to triangulate the location of the suspected well, to use a metal detector to look for the well, and to install a fan in the crawlspace. The HOA rejected these proposals as well.

[794] In November, the HOA consulted a third driller, Randy Dougherty. Dougherty noted several possible sources of the water in the crawlspace—an improperly capped well, an underground spring, or a high water table—but advised that an undestroyed well was “probable” and that the well was likely near the rear foundation or close by. Dougherty suggested that the HOA use a magnetometer or ground penetrating radar to search for the well. The HOA did not do so.

The HOA’s Change of Course

Consistent with the opinions of the City, the Water District, and the drilling contractors, Moritz initially believed that water in the crawlspace was from a well, and the HOA took the position that there was likely an undestroyed well underneath the crawlspace. For example, the HOA told the Anderson Group that there was such a well, drafted a letter to the City demanding immediate action to deal with the suspected well, and formed a “well” committee. In addition, when Ridley proposed installing a “French drain” for the water in the crawlspace, the HOA rejected the proposal because it would not destroy the suspected well “which the Association is now required to do, by law.”

However, in July, the first law firm hired by the HOA concluded that neither the City nor the District could be held responsible for the damage caused by the water intruding into the crawlspace under the homeowners’ unit. Sometime later in the year, the HOA changed course. It stopped trying to locate and destroy a well underneath the crawlspace and decided instead to pursue the previously rejected option of installing a French drain, which would cause less damage to the homeowners’ unit and thus be less expensive. Notably, however, the board’s secretary emailed the board that, based upon the latest information received, it did not appear that opening up the homeowner’s unit to find and cap the suspected well would entail “catastrophic expense,” and the trial court observed that the HOA withheld this “critical” communication until right before trial.

In September 2018, the HOA hired a new attorney, Steve Barber. In December, Barber contacted two hydrologists. Although Barber noted that the Water District had recharged the groundwater, he did not mention the opinions of the City, the Water District and the drilling contractors that there likely was an undestroyed well underneath the crawlspace. Unaware that a well might be causing the water intrusion, one of the hydrologists sent a preliminary analysis suggesting a French drain.

In January 2019, Barber sent a letter to the City and the Water District. In the letter, Barber stated that “[s]omeone” had “postulated” a well underneath the homeowners’ unit and that two drilling contractors (Pitcher and Dougherty) had expressed such a belief. However, Barber asserted that the water [795] intrusion was a “one-time event” that had not recurred and that no mold had developed in the unit. He also represented that he had “contacted several experts in the areas of hydrology and engineering,” and “[n]o one with whom we consulted gives credence to the hypothesis that there is an abandoned well” under the homeowners’ unit. Barber asserted as well that “[t]he consensus is that there is a high groundwater table with that abundance of water” under the condominium complex. The letter concluded by asserting that the proper solution was a “French or curtain drainage system.”

Four days later, Moritz forwarded Barber’s letter to Ridley and informed him that the HOA had concluded that the suspected well under Ridley’s unit “most likely does not exist” and that “[n]one of the experts consulted give credence to the hypothesis ․ that an abandoned well exists.” Moritz also stated that a hydrologist had recommended using a French drain to prevent water encroachment and that no mold had been found in or under the unit. Moritz’s annual message to HOA members similarly asserted that a “Soil Engineer’s report” stated that there was no well on HOA property and that a “Certified Industrial Hygienist report” found no mold in or under the property. At trial, Mortiz admitted that many of his statements and those in Barber’s letter were false.

Subsequent Events

In March 2019, two months after Barber represented to the City and Water District that the water intrusion in the crawlspace was a one-time event, the crawlspace flooded. This flooding was worse than the year before, and three to four feet of water remained in the crawlspace through June. Nevertheless, the HOA took no steps to remove the water beyond operating the sump pump that Ridley had installed. During this time period, plumbers hired by the HOA dug exploratory trenches in the backyard of the homeowners’ unit but found no water in the trenches.

In April 2019, the HOA hired an engineer specializing in drainage, Jim Toby, to design a French drain for the homeowners’ unit. Toby was not told that there might be a well underneath the unit, and therefore the plans that he created did not address the problems that a well and the debris surrounding it would create. In June, Toby informed the HOA that he believed that there was a well under the crawlspace.

Nevertheless, the HOA did not reconsider its decision that there was no well underneath the homeowners’ unit. To the contrary, in July 2019, after the homeowners sued and sought a preliminary injunction, Moritz represented to the trial court that the water in the crawlspace was most likely not from an abandoned well but rather than from “a high ground water table under the [796] subject property.” This theory was contradicted by the exploratory trenches dug by HOA’s plumbers: Although a high water table would have saturated the entire area, not just the crawlspace under the homeowners’ unit, as noted above, there was no water in the trenches.

At the end of September, an engineering contractor discovered a sinkhole in the crawlspace. The City prohibited occupation or use of the homeowners’ unit and ordered the HOA to correct the violation. Rather than resume searching for the suspected well, the HOA decided to remove soil from the crawlspace and pour concrete on top of the sinkhole.

Accordingly, in January 2020, workers hired by the HOA cut a hole in the floor of the homeowner’s unit and began removing soil. After about two hours, they discovered a wellhead. The workers were not told that there might be a well underneath the soil that they were removing.

C. Damage to the Homeowners’ Unit

Although tests showed mold in the homeowners’ unit by June 2019, and that month a consultant recommended drying out the crawlspace, the HOA did not immediately take any action to prevent or remediate mold. Later inspections found visible mold in the kitchen. In addition, testing showed several types of mold, some toxic, in patterns consistent with growth from condensation. However, even by the time of trial in 2023, this mold had not been fully remediated.

There was another problem as well. In 2010, Ridley discovered termites and had a formal inspection done, which he passed along to the HOA. However, the HOA did nothing in response to the report, though the unit was fumigated in 2016. By the time of trial, the termite damage was “very severe” and, indeed, “a late stage cancer” for the building. Consequently, the southern exterior wall in the homeowners’ unit and other structures in the house were so decayed that they could not perform their intended function and needed to be replaced.

In addition, in March 2019, an HOA board member noted that the window trim on the south wall was rotting. However, the HOA did not start repairing the trim until April 2021, more than two years later.

D. Proceedings Below

The Pleadings

The homeowners sued the HOA in June 2019. They claimed breach of the CCRs in addition to claims for violating the Davis-Stirling Common Interest [797] Development Act (Civ. Code, § 4000 et seq.), breach of implied warranty, negligence, nuisance, and breach of fiduciary duty. The homeowners amended their complaint in July 2021 to add Moritz, the HOA president, to the negligence and breach of fiduciary duty claims, added a constructive fraud claim against both the HOA and Moritz, and abandoned the warranty claim.

Interim Relief

The parties sought several temporary restraining orders and preliminary injunctions. In July 2019, the homeowners sought to enjoin the HOA from forcibly entering their unit. Although the trial court issued a temporary restraining order, as noted above, the court denied a preliminary injunction in reliance on Moritz’s representation that the water in the crawlspace was likely from a high water table and that the HOA was installing a French drain to remedy the problem. The trial court also denied a later request to require the HOA to investigate “the true source of the water condition” in the crawlspace, and it enjoined the homeowners from interfering with the HOA’s repair work. Later, however, the trial court preliminarily enjoined the HOA from disabling the homeowners’ security cameras.

The Trial

In April 2022, the case went to trial. The trial lasted 67 court days and produced a trial transcript of approximately 7,700 pages. In September 2022, after the parties had rested, the trial court informed the parties that it would issue an interim order concerning disputed repairs and indicated how it would rule. However, it does not appear from the record that the trial court issued a written order, and the trial judge took a medical leave of absence. Upon returning, the court issued further orders concerning, among other things, remediation of the crawlspace.

In late March 2024, after closing briefs and arguments, the trial court began to announce its finding and finished doing so two weeks later. The trial court found in favor of the homeowners on all their claims. The court awarded damages for restoration costs, lost rent, utility, and emotional distress. In addition, finding the defendants’ behavior despicable, the trial court awarded $250,000 in punitive damages against the HOA and $25,000 against Moritz.

In concluding that the HOA breached the CCRs, the trial court determined that the HOA’s duty to repair and maintain common areas included subsidiary duties to investigate and to make repairs in a reasonably timely fashion. The court then found that the HOA failed to properly investigate the suspected well, the mold or the terminate damage and that it is also failed to timely [798] repair the resulting damage. Indeed, the trial court observed even by the trial, six years after the initial flooding, the HOA had not restored the homeowners’ unit to a livable condition.

The trial court also found that the HOA had engaged in “a pattern of falsehood [and] deception.” The court found that in the spring and summer of 2018 “everything pointed very strongly to a well and suggested very strongly that the well was either directly in the crawlspace or just beyond it.” Nevertheless, the HOA decided “to use any means necessary” to convince the City and the Water District that the HOA did not need to locate and destroy the suspected well. Among other things, the HOA failed to disclose the suspected well to experts in an attempt to manipulate them into providing opinions the HOA desired. Barber’s January 2019 letter to the City and Water District made numerous false and misleading statements. Moreover, in what the trial court termed “very conscious acts of deception,” Moritz repeated Barber’s false and misleading statements to Ridley, the HOA membership, and the trial court. The HOA even failed to disclose the suspected well to the workers who eventually discovered it, which the trial court found put the workers at physical risk.

For similar reasons, the trial court found that neither the CCRs’ exculpatory clause nor the business judgment rule and the related rule of judicial deference to condominium associations protected defendants. The court ruled that the exculpatory clause did not protect the HOA because much of plaintiffs’ damages was caused by the HOA’s failure to repair rather than the water intrusion, because the clause was against public policy and unenforceable, and because the HOA was grossly negligent. In particular, the court found gross negligence because the HOA’s conduct was an extreme departure from the ordinary standard of conduct and because the HOA showed a passive or indifferent attitude to the injurious consequences of its conduct. The court also rejected the HOA’s business judgment rule and rule of judicial deference defenses because the HOA did not conduct a reasonable investigation into the suspected well and because the HOA did not act in good faith. In finding bad faith, the court noted the HOA’s disregard of the advice it received and its “extreme acts of dishonesty.”

After the trial court explained its rulings, defendants requested a written statement of decision, which the court agreed to provide. Subsequently, the court held hearings on whether to award expert witness fees, which it did.

The Injunction

On July 25, 2024, the trial court issued an injunction order after trial. The order required the HOA, “by and through is board of directors, including [799] Steve Moritz,” to perform specified work on the crawl space, the south wall, and the interior and kitchen of the homeowners’ unit. In addition, the order stated that “[t]he HOA will remain liable to the Plaintiffs for lost rent of $4,000 per month and utilities of $115 month” until completion of the required work.

Subsequent Proceedings

On September 19, 2024, Moritz and the HOA appealed from the injunction issued on July 25, 2024. The homeowners moved for a calendar preference, which was granted.

While the appeal was pending, the parties filed amended proposed statements of decisions, and the trial court issued a statement of decision on February 26, 2025.

II. DISCUSSION

Although the HOA appeals from the injunction issued after trial, it does not challenge the appropriateness of injunctive relief or the terms of the injunction. Instead, the HOA challenges the claims underlying the injunction. We need address only one of these claims: that the HOA breached its duties under the condominium CCRs. Moreover, while the parties dispute whether the 2019 amended CCRs apply, we need only address the original CCRs adopted in 1981.^*

As a general rule, a condominium association’s covenants and restrictions are enforceable equitable servitudes, which benefit all condominium owners (Civ. Code, § 5975, subd. (a)), and individual owners may enforce the covenants and restrictions against the association (id., § 5975, subd. (b)). In addition, because the promises in such covenants and restrictions are of a “contractual nature,” their enforcement is “ ‘subject to contract principles.’ ” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 239, 145 Cal.Rptr.3d 514, 282 P.3d 1217.)

[800] The HOA challenges the trial court’s findings that the HOA breached its duties under the CCRs to investigate and to timely repair as well as the court’s rejection of several affirmative defenses. We address these issues below.

A. Breach of the CCRs

Section 8 of the CCRs imposes on the HOA the duty “[t]o manage, operate, maintain, repair, paint, landscape, care for and preserve the Common Area ․ to the standard of maintenance prevalent in the neighborhood.” It is undisputed that the crawlspace underneath the homeowners’ unit is a common area and that the HOA’s duty to maintain and repair that area includes subsidiary duties to investigate water intrusions and to make repairs in a reasonably timely fashion. The HOA argues that the homeowners failed to present sufficient evidence that the HOA breached these subsidiary duties. As explained below, we conclude that the trial court’s findings of breach are supported by substantial evidence.

The Substantial Evidence Standard

In arguing that the evidence of breach was insufficient, the HOA faces a “ ‘ “daunting burden.” ’ ” (Padideh v. Moradi (2023) 89 Cal.App.5th 418, 438, 305 Cal.Rptr.3d 906.) Factual findings are governed by the substantial evidence standard, and under that standard, appellate courts do “ ‘not reweigh the evidence, evaluate the credibility of witnesses, or resolve evidentiary conflicts.’ ” (In re Caden C. (2021) 11 Cal.5th 614, 640, 278 Cal.Rptr.3d 872, 486 P.3d 1096.) Instead, “the appellate court’s power begins and ends with a determination of whether there is any substantial evidence” (Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 582, 257 Cal.Rptr.3d 699)—that is, whether there is “ ‘ “ ‘evidence that is reasonable, credible, and of solid value.’ ” ’ ” (People v. Ramirez (2022) 13 Cal.5th 997, 1117, 298 Cal.Rptr.3d 1, 515 P.3d 1085.) In determining whether there is substantial evidence, appellate courts review the record “ ‘ “ ‘in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor.’ ” ’ ” (Carranza v. City of Los Angeles (2025) 111 Cal.App.5th 388, 400, 332 Cal.Rptr.3d 778.)

The Investigation

There is substantial evidence that the HOA failed to conduct a reasonable investigation.

The HOA had notice that the water in the crawlspace under the homeowners’ unit may have been from an undestroyed well. In May 2018, the HOA [801] received reports that both the City and the Water District believed the water in the crawlspace was from an undestroyed well, and the Water District provided the HOA with a map showing the general area in which the well was likely located. Three drilling contractors consulted by the HOA similarly expressed the opinion that the water was likely from an undestroyed well. Moreover, the HOA initially took the same position: In a June 2018 draft letter to the City, the HOA asserted that there was a well underneath the homeowners’ unit, and in August 2018 the HOA rejected Ridley’s proposal for a French drain because the drain would not address the suspected well.

Nevertheless, the HOA made little effort to locate the suspected well. It rejected a proposal to bring in a mini-excavator to dig into the crawlspace to search for the well, which would have required cutting a hole in the floor of the homeowners’ unit. It also refused to take less costly measures. For example, although one of the drillers consulted by the HOA proposed to conduct historical research to better locate the well at a cost of $150 per hour, the HOA rejected the offer and instead Moritz did his own research (but located only one photograph). The HOA likewise rejected recommendations to search for the suspected well using ground penetrating radar, a magnetometer, or a metal detector.

In addition, in late 2018, the HOA adopted the position that the water in the crawlspace was not from an undestroyed well and stopped looking for such a well. The HOA had no basis for this decision. None of the HOA board members had experience dealing with wells; for example, Moritz, who took the lead on the issue, was a librarian for a laboratory, not an engineer. Although one drilling contractor mentioned alternative possibilities, no expert advised the HOA the water in the crawlspace was likely from a source besides an undestroyed well. In addition, the theory that the HOA adopted instead—that the water in the crawlspace was due to a high water table—was, in the opinion of a former Santa Clara County Water District official “crazy” because a high water table would have saturated the entire area, not just the crawlspace.

Moreover, the HOA did not reconsider its position in March 2019 after the crawlspace flooded and a plumber digging trenches around the perimeter of the homeowners’ unit found no water. Nor did the HOA reconsider in June 2019 when Jim Toby, the civil engineer hired to design a French drain, informed the HOA that he believed the water in the crawlspace was likely from a well, or in September 2019 when a sinkhole was discovered in the crawlspace.

In fact, the HOA discovered the undestroyed well only by accident. The HOA failed to actively search for a well during 2018, and in January 2019, it stopped searching for the well altogether. The well was only discovered in [802] January 2020, 19 months after the original flooding of the crawlspace, when workers seeking to fill the sinkhole came upon a well cover.

Based on this evidence, the trial court had more than adequate grounds for finding that the HOA failed to conduct a reasonable investigation.

The Remediation

There is also substantial evidence that the HOA failed to repair the homeowners’ unit in a timely fashion.

Early on, the HOA was advised of the danger posed by the water in the crawlspace and the need to act promptly. In May 2018 the HOA was advised that moisture was seeping into the unit, and the first law firm it retained warned of the “exponential costs” that might result if the problem was not swiftly addressed. Nevertheless, the HOA took no meaningful steps to mitigate the damage caused by the water in the crawlspace until the well was discovered by accident in January 2020. It is true that the HOA allowed Ridley to continue installing a sump pump. However, the HOA rejected the recommendation of its water restoration consultant to dry out the crawlspace. In addition, while the HOA decided to install a French drain to deal with the water in the crawlspace, it did not apply for a permit for the drain until August 2019, more than 15 months after receiving notice of water infiltration.

The HOA also failed to respond to damage in the homeowners’ unit. In June 2018, an industrial hygienist informed the HOA that mold was developing in the unit and recommending remediation measures. By March 2019, mold was visible on kitchen cabinets and floors, and lab results showed elevated levels of mold in the master bedroom and bath. Accordingly, the HOA was told to dry out the crawlspace, clean the kitchen cabinet, and monitor moisture levels. However, the HOA did not timely implement these recommendations, and even by October 2023, it had not fully remediated the mold.

The HOA was similarly delinquent in dealing with the damage to the south wall. In 2010, Ridley informed the HOA that there were termites in the wall. However, other than fumigating the wall in 2016, the HOA did nothing to repair the termite damage before trial. Additionally, in March 2019, a board member noted rotting window trim on the wall, but the Board did not begin repairing the trim until April 2021, more than two years later.

This evidence provided ample basis for the trial court’s finding that the HOA failed to remedy the water, mold, and termite damage in the homeowners’ unit in a timely fashion.

[803]

HOA’s Arguments

The HOA contends that there was insufficient evidence of breach because the expert on condominium practice presented by the homeowners testified that he did not rely on the standard of maintenance prevalent in the neighborhood. This contention is based on the provision in the CCRs requiring the HOA to manage, maintain, and repair common areas, facilities, improvements and landscaping “to the standard of maintenance prevalent in the neighborhood.” This reference to the neighborhood standard does not help the HOA because it concerns the level to which the common areas must be maintained. By contrast, the homeowners’ claim is based the standards of care for investigating and remediating damage. The homeowners’ expert testified to the standard of care observed by an ordinarily prudent condominium board with respect to investigating and remediating damages.

In any event, there was evidence that homes in the neighborhood did not have pools of water on the ground, which shows the prevalent standard of maintenance relevant to the water in the crawlspace under the homeowners’ unit. Thus, even if the homeowners were required to show that the HOA failed to meet the standard prevailing in the community in investigating and repairing, there was substantial evidence supporting the trial court’s finding that the homeowners satisfied that burden.

The HOA also asserts that nothing in the CCRs required it “to rely on certain experts.” While that may be true, the trial court did not interpret the CCRs to require the HOA to rely on any particular expert. Instead, in finding that the HOA failed to conduct a reasonable investigation into the water intrusion, the trial court noted that the HOA ignored the opinions of all the drilling contractors it consulted, the City, the Water District, and the civil engineer it hired to construct the French drain that there was likely an undestroyed well under the crawlspace. While the HOA asserts that it was reasonable to reject several specific recommendations and to delay remediation of some items, it does not—and cannot—argue that the trial court lacked a solid basis for finding that the HOA failed to conduct a reasonable investigation.

Finally, the HOA asserts that the trial court rewrote the CCRs to require the HOA to perform maintenance within a specific time frame. We disagree. Far from adopting a specific deadline, the trial court recognized that the CCRs “do[ ] not provide a specific time that something has to be done” and that therefore repairs had to be done “in a reasonable time.” However, the court concluded that the HOA did not make repairs within a reasonable time because the homeowners’ unit remained in an unlivable condition six years after the initial water intrusion in the crawlspace, not because it failed to meet [804] any specific deadline. In reaching this conclusion, the trial court observed that the CCRs required homeowners to begin repairs within 60 days of the damage to be repaired. However, the trial court did so only to provide guidance on what constitutes a reasonable time for repairs, not to impose a specific deadline.

We therefore conclude that the trial court’s finding that the HOA breached the CCRs is supported by substantial evidence.

B. The Business Judgment Rule and Rule of Judicial Deference Defenses

The HOA also challenges the trial court’s rejection of its rule of judicial deference and business judgment rule defenses. We are not persuaded. The trial court rejected these defenses based on well-supported findings that the HOA failed to conduct a reasonable investigation and did not act in good faith.

Condominium boards are protected by the rule of judicial deference adopted by the Supreme Court in Lamden v. La Jolla Shores Clubdominium Homeowners Association (1999) 21 Cal.4th 249, 87 Cal.Rptr.2d 237, 980 P.2d 940 (Lamden). Under this rule, decisions by condominium boards concerning maintenance and repair of common areas are entitled to judicial deference if, among other things, they are made upon reasonable investigation and in good faith: “[W]here a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant development statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise.” (Id. at p. 265, 87 Cal.Rptr.2d 237, 980 P.2d 940.)

The HOA is also protected by the business judgment rule. Although the business judgment rule does not apply to all condominium associations (Lamden, supra, 21 Cal.4th at p. 259, 87 Cal.Rptr.2d 237, 980 P.2d 940), it applies here because the HOA is incorporated. Much like the rule of judicial deference, the business judgment rule creates a presumption that decisions by corporate directors are based on sound business judgment and “ ‘prohibits courts from interfering in business decisions made by the directors in good faith and in the absence of a conflict of interest.’ ” (Lauckhart v. El Macero Homeowners Assn. (2023) 92 Cal.App.5th 889, 906, 310 Cal.Rptr.3d 150 (Lauckhart).)

Both the rule of judicial deference and the business judgment rule are affirmative defenses. (Affan v. Portofino Cove Homeowners Assn. (2010) 189 [805] Cal.App.4th 930, 940, 117 Cal.Rptr.3d 481 (Affan) [rule of judicial deference]; Ekstrom v. Marquesa at Monarch Beach Homeowners Assn. (2008) 168 Cal.App.4th 1111, 1123, 86 Cal.Rptr.3d 145.) As a consequence, defendants invoking these rules bear the burden of establishing the requirements for their application. (Affan, at p. 940, 117 Cal.Rptr.3d 481.) Moreover, where, as here, the trial court found that the defendant failed to satisfy that burden, the issue on appeal is “ ‘whether the evidence compels a finding in favor of the appellant as a matter of law.’ ” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 466, 126 Cal.Rptr.3d 301.) To demonstrate that a finding is compelled, a defendant must show that the evidence supporting that finding was “ ‘(1) “uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.” ’ ” (Ibid.)

The trial court held the rule of judicial deference inapplicable because it found that the HOA did not conduct a reasonable investigation. As shown above, substantial evidence supports this finding. The HOA was on notice in the spring of 2018 that the City and the Water District believed the water in the crawlspace might be from an undestroyed well, and all three of the drilling contractors that the HOA consulted agreed there was likely such a well. Nonetheless, the HOA decided without any advice, expertise, or evidence that there was no well and stopped investigating the possibility. Moreover, the HOA refused to reconsider this decision in spite of additional flooding, the trenches that they dug, the sinkhole that developed, and their civil engineer’s advice. As a consequence, the well underneath the homeowners’ unit was discovered only by accident in January 2020. In challenging the trial court’s finding that it failed to conduct a reasonable investigation, the HOA ignores this evidence and asserts that it “weighed competing interests” and “at times conflicting expert opinions.” However, those considerations do not undermine the evidence upon which the trial court concluded that the HOA failed to conduct a reasonable investigation, much less compel the conclusion that the HOA’s investigation was reasonable.

The trial court also found that the HOA did not act in good faith in refusing to search for a well or remediate the homeowners’ unit. This finding is also well supported. As just noted, the HOA ignored the opinions of the City, the Water District, and its drilling contractors without any colorable basis, and it decided without any expert advice to pursue a remedy—the French drain—that it had rejected earlier as not adequately addressing the undestroyed well.

Moreover, the HOA tried to manipulate other experts into supporting this remedy by not informing them of the possibility of a well. In December 2018, the HOA’s lawyer Stephan Barber contacted two hydrologists and [806] obtained a preliminary recommendation for a French drain but failed to disclose to the hydrologists that the water in the crawlspace might be from an undestroyed well. Then, the HOA tried to use that preliminary analysis and other misrepresentations to persuade the City and the Water District to support the French drain. Barber wrote the City and the Water District that “no qualified expert with whom we have consulted gives any credence to the hypothesis that there is an abandoned artesian well” under the homeowners’ unit and that “[t]he consensus is that there is a high groundwater table with an abundance of water” under the condominium complex. In fact, Barber was personally present when one of the drilling contractors consulted by the HOA stated that, while the water might be coming from an underground spring or a high groundwater table, a well below the homeowners’ unit was the probable source. In addition, as previously noted, at the time that the HOA made this decision no expert had advised it that the water in the crawlspace was likely due to a high water table, and the hydrologist who Barber suggested supported this contention testified that he was “angry” and “shocked” by Barber’s letter suggesting that he supported this position.

The conclusion that the HOA did not act in good faith is reinforced by other evidence of bad faith. First, Moritz repeated the misstatements in Barber’s letter to Ridley, to the association’s membership, and to the courts. Although Moritz admitted to the trial judge that at the time he believed the water in the crawlspace was from a well, he forwarded Barber’s letter to Ridley, and he stated that “[n]one of the experts consulted give credence to the hypothesis postulated by the [relevant government authorities] that an abandoned well exists.” In addition, when the homeowners sued the HOA, Moritz told the association’s membership that the water underneath the homeowners’ unit was likely due to a high water table. And when the homeowners sought a temporary restraining order, Moritz submitted a declaration stating that “[t]he HOA has since determined that the most likely cause of the water is a high ground water table under the subject property.”

Second, the HOA acted in bad faith towards the homeowners. In July 2018, it formed a well committee and appointed Ridley to the committee. Moritz assured Ridley that he would be involved in all the committee’s discussions about the water problem under his unit. However, as Moritz admitted at trial, this statement was false and was made only to placate Ridley. Indeed, almost immediately after Ridley joined the well committee, Ridley was excluded from committee communications. For example, on July 30, 2018, after Ridely raised questions to the committee about mold, the HOA’s manager removed Ridley from the email chain and asked other committee members for their views on how to respond to Ridley. That same day, another committee member distributed mold test results without copying Ridley. And committee members excluded Ridley from an email concerning insurance coverage and the retention of Barber.

[807] Third, the HOA acted without regard to the health and safety of others. For example, in December 2018, without expert advice, Moritz told the homeowners that their unit was habitable and should be rented. Even worse, the HOA sent a contractor to remove the topsoil and fill the sinkhole without telling them that there might be an undestroyed well there. However, as one of the drilling contractors testified, a well like the one found underneath the crawlspace can flow at 500,000 gallons a minute, and if the soil on top of the well is removed and there is no longer any pressure holding the well cap down, water can shoot up like a fire hydrant run over by a car. Accordingly, the trial court found that Mortiz’s failure to disclose the possible presence of a well put workers at risk.

The HOA asserts that the trial court’s focus on the Barber letter and Moritz’s adoption of statements in the letter is “misplaced” because the letter “must be viewed within the context of HOA’s consultation with experts, the weighing of costs, the potential for destroying the unit, and the fact that Ridley had initially proposed the French drain.” However, the HOA does not explain how its consultation with experts, most of whom it ignored, establishes that it acted in good faith. Nor does the HOA explain how any of the factors identified compels the conclusion that it acted in good faith when it made multiple false and misleading statements in support of a solution that it adopted without any colorable basis.

The HOA also asserts that Barber’s statements stemmed from uncertainty over the location of the suspected well and reflected his belief that a French drain was the best solution. However, Mortiz admitted that, when the HOA made the decision to install a French drain in January 2019, no expert had recommended installing such a drain. In addition, Barber’s letter to the City did not merely assert that the location of the undestroyed well was uncertain: In direct contradiction to all the drilling contractors consulted by the HOA, the letter stated that no expert believed that that there was a well “under or near” the unit, and that the consensus was that the water in the crawlspace was due to the “crazy” hypothesis of a “high groundwater table.” (Italics added.) The HOA also asserts that Barber was merely advocating on behalf of his client, but fails to explain how the fact relieves the HOA of responsibility for the misstatements made on its behalf, much less how the fact suggests that the HOA was acting in good faith.

In its reply, the HOA notes Moritz’s testimony that he believed that the statements in Barber’s letter were true when they were made. However, the trial court—which specifically questioned Moritz about these beliefs—found that this testimony was not credible and that the HOA engaged in a pattern of “falsehood” and “deception.” As appellate courts “ ‘defer to the trier of fact on issues of credibility’ ” (Greisman v. FCA US, LLC (2024) 103 Cal.App.5th [808] 1310, 1322, 324 Cal.Rptr.3d 182), the trial court’s rejection of Moritz’s testimony on this point must be respected.

Other explanations offered by the HOA fail for the same reason. For example, the HOA’s attempts to defend Barber’s failure to disclose the suspected well to the hydrologists by pointing to Barber’s testimony that he did not want to influence their opinions. The trial court found this explanation implausible and “pretextual,” another credibility assessment that must be respected. Similarly, while the HOA asserts that Ridley’s exclusion from well committee communications “shows at most a lack of communication,” the trial court disagreed, inferring that Ridley’s exclusion was intentional and the promise to include him pretextual.

Finally, the HOA objects that it engaged in “active decision making” concerning the water intrusion under the homeowners’ unit and resulting repairs and that the trial court engaged in impermissible “second-guessing” and “micromanaging” of these discretionary decisions. This objection begs the question. Under the rule of judicial deference and the business judgment rule, courts are required to defer to the discretionary decision making of a homeowner’s board only if the board acted in good faith. (See, e.g., Lamden, supra, 21 Cal.4th at p. 257, 87 Cal.Rptr.2d 237, 980 P.2d 940; Lauckhart, supra, 92 Cal.App.5th at p. 906, 310 Cal.Rptr.3d 150.) Moreover, while the HOA points to some actions that it took in good faith, such as investigating whether there was an undestroyed well in the spring, summer, and fall of 2018, and to its repair efforts after the inadvertent discovery of the well in January 2020, the trial court found that the HOA acted in bad faith based on its conduct in late 2018 and throughout 2019.

We therefore conclude that substantial evidence supports the trial court’s findings that the HOA failed to conduct a reasonable investigation and acted in bad faith, and therefore the trial court properly rejected the HOA’s rule of judicial deference and business judgment rule defenses. In light of this conclusion, we need not consider the alternative grounds on which the trial court rejected these defenses.

The HOA also challenges the trial court’s rejection of its defense under the CCRs’ exculpatory clause. The court rejected this defense on three alternative grounds: The clause does not apply because the claimed damage was caused by the HOA’s neglect, because the clause is against public policy and unenforceable, and because the HOA was grossly negligent. The HOA challenges each of these rulings. We need address only gross negligence.

“ ‘Gross negligence’ long has been defined in California and other jurisdictions as either a ‘ “ ‘want of even scant care’ ” ’ or ‘ “ ‘an extreme departure from the ordinary standard of conduct.’ ” ’ ” (City of Santa [809] Barbara v. Superior Court (2007) 41 Cal.4th 747, 754, 62 Cal.Rptr.3d 527, 161 P.3d 1095.) Thus, gross negligence may be proven in two different ways. (Davis v. Physician Assistant Board (2021) 66 Cal.App.5th 227, 239-240, 281 Cal.Rptr.3d 207.) First, a defendant is grossly negligent if it exercises “so slight a degree of care as to raise a presumption of conscious indifference to the consequences” as, for example, where a person’s state of mind is “ ‘simply, “I don’t care what happens.” ’ ” (People v. Bennett (1991) 54 Cal.3d 1032, 1036, 2 Cal.Rptr.2d 8, 819 P.2d 849.) Second, a defendant is grossly negligent if its conduct constitutes “ ‘an extreme departure from what a reasonably careful person would do in the same situation to prevent harm to oneself or to others.’ ” (Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC (2024) 99 Cal.App.5th 44, 56, 317 Cal.Rptr.3d 573.)

The trial court found both an extreme departure by the HOA from the ordinary standard of care and an indifference towards the consequences of its conduct. Both findings are supported by substantial evidence.

There was ample evidence of an extreme departure from the ordinary standard of care. As noted above, the HOA was informed in May 2018 that the City believed that the water in the crawlspace was likely from an undestroyed well that had to be located and destroyed, and all three drilling contractors consulted by the HOA expressed the same opinion. Nevertheless, the HOA rejected these opinions and, without any expert advice, decided that there was no well and took the “crazy” position that the water in the crawlspace was from a high groundwater table. In addition, the HOA maintained this position in the face of evidence—flooding in March 2019, the absence of water in the trenches dug near the unit, and the sinkhole found in September 2019—that the water in the crawlspace was not from a high groundwater table. Finally, rather than trying to determine the true source of the water in the crawlspace and the best remedy for it, the HOA tried to manipulate the opinions of the hydrologists it consulted by not disclosing the potential well and then misrepresented the opinions it had received to the City, the Water District, its membership, and the courts. This record provides substantial evidence that the HOA’s conduct constituted an extreme departure from what a reasonably careful person would do.

There also was substantial evidence that the HOA acted with indifference to the dangerous consequences of its conduct. For example, as early as May 2018, the HOA was informed of the “exponential” loss that might occur if it did not address quickly the water in the crawlspace. Two months later, an industrial hygienist informed the HOA that mold was developing in the homeowners’ unit, and by March 2019 mold was visible on kitchen cabinets and floors. Nevertheless, the HOA took no meaningful action to remove the water in the crawlspace until discovery of the well in January 2020 and [810] before then asserted without basis that the homeowners’ unit was habitable, despite the danger that some of the mold in the unit was toxic—as it turned out to be. In addition, the HOA sent workers to dig out the sinkhole without informing them that they might be removing the soil above an undestroyed well, despite the danger of an explosion when the soil was removed. This evidence provided ample basis for finding that the HOA was indifferent not only to the property damage that its inaction could cause, but also to the health of tenants and the physical safety of workers.

In its opening brief, the HOA did not attempt to explain why this evidence was insufficient to show gross negligence. The HOA merely asserted that it never disclaimed responsibility and took multiple steps to resolve the water intrusion, mold, and damage to the south wall. While that is true, the HOA was nonetheless grossly negligent in deciding without any reasonable basis to ignore the opinions of the City, the Water District, and its drilling contractors that there was a well and also for delaying 19 months before taking any meaningful action to remedy or reduce the damage to the homeowners’ unit.

In its reply brief, the HOA asserts that it “had reasons for its maintenance decisions” and that the false and misleading statements by Barber and Moritz “reflected the HOA’s belief that the best approach at the time was to proceed with a French drain.” However, the HOA fails to explain why the trial court could not find the HOA grossly negligent based on the contrary evidence in the record. (See City of San Buenaventura v. United Water Conservation Dist. (2022) 79 Cal.App.5th 110, 120, 294 Cal.Rptr.3d 491 [“ ‘ “As a general rule,” ’ ” appellate courts “ ‘ “will look only at the evidence and reasonable inferences supporting the successful party, and disregard the contrary showing.” ’ ”].) The HOA also asserts that, at the time that it sent workers into the sinkhole, there was no evidence that there was a well directly underneath the unit. In fact, while there was no definitive evidence of the location of the well, as has been repeatedly noted, the HOA was informed by all three drilling contractors that it consulted that an undestroyed well was likely either under the crawlspace or just outside the rear foundation. Finally, in attempting to defend Moritz’s insistence that the homeowners’ unit was habitable, the HOA notes that Ridley rented out the unit in October 2018. However, the HOA fails to acknowledge Ridley had a mold test done after the tenant in question moved out, and that this test, which Ridley shared with the HOA, showed that mold was present.

In short, the HOA has not shown any error in the trial court’s finding of gross negligence. We therefore affirm the court’s rejection of the HOA’s exculpatory clause defense and, because the court’s finding of breach is otherwise justified, we affirm the determination that the HOA breached the CCRs and the injunction issued based upon that breach.

[811] III. DISPOSITION

The injunction order issued July 25, 2024 is affirmed. Respondents are entitled to recover costs on appeal. (Cal Rules of Court, rule 8.278(a)(1), (3).)

The homeowners did not include Moritz in their CCRs claim. However, we need not consider the claims against Moritz to review the injunction on appeal because the injunction does not impose any obligations upon Moritz personally. Instead, the injunction was issued against the HOA, “by and through its board of directors, including Steve Moritz,” and it stated that “[t]he HOA”—not the HOA’s board or Moritz—“will remain liable” for lost rent. Moreover, Moritz has left the board. Because the HOA plainly has standing to bring this appeal, and Moritz does not seek any relief beyond that sought by the HOA, we need not determine whether Moritz is aggrieved and has standing. (See, e.g., Cesar V. v. Superior Court (2001) 91 Cal.App.4th 1023, 1035, 111 Cal.Rptr.2d 243; In re Sarah S. (1996) 43 Cal.App.4th 274, 282, fn. 10, 50 Cal.Rptr.2d 503.)

BROMBERG, J.

WE CONCUR: DANNER, ACTING P. J. WILSON, J.

Water Code Section 13552.4. Residential Recycled Water.

(a) Any public agency, including a state agency, city, county, city and county, district, or any other political subdivision of the state, may require the use of recycled water for irrigation of residential landscaping, if all of the following requirements are met:

(1) Recycled water, for this use, is available to the user and meets the requirements set forth in Section 13550, as determined by the state board after notice and a hearing.

(2) The use of recycled water does not cause any loss or diminution of any existing water right.

(3) The irrigation systems are constructed in accordance with Chapter 3 (commencing with Section 60301.050) of Division 4 of Title 22 of the California Code of Regulations.

(b) This section applies to both of the following:

(1) New subdivisions for which the building permit is issued on or after March 15, 1994, or, if a building permit is not required, new structures for which construction begins on or after March 15, 1994, for which the state board has approved the use of recycled water.

(2) Any residence that is retrofitted to permit the use of recycled water for landscape irrigation and for which the state board has approved the use of recycled water.

(c)

(1) Division 13 (commencing with Section 21000) of the Public Resources Code does not apply to any project that only involves the repiping, redesign, or use of recycled water for irrigation of residential landscaping necessary to comply with a requirement prescribed by a public agency under subdivision (a).

(2) The exemption in paragraph (1) does not apply to any project to develop recycled water, to construct conveyance facilities for recycled water, or any other project not specified in this subdivision.

(d) Outdoor landscape irrigation of common areas that does not enter the boundaries of a residence is not to be considered a part of the same premises as an individual residence and shall not be considered a dual plumbed system. Recycled water used for this purpose shall comply with Section 13550.

Government Code Section 66333. Junior Accessory Dwelling Units; Ordinance Requirements.

Notwithstanding Article 2 (commencing with Section 66314), a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single-family residential zones. The ordinance may require a permit to be obtained for the creation of a junior accessory dwelling unit, and shall do all of the following:

(a) Limit the number of junior accessory dwelling units to one per residential lot zoned for single-family residences with a single-family residence built, or proposed to be built, on the lot.

(b) Require owner-occupancy in the single family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization.

(c) Require the recordation of a deed restriction, which shall run with the land, shall be filed with the permitting agency, and shall include both of the following:

(1) A prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, including a statement that the deed restriction may be enforced against future purchasers.

(2) A restriction on the size and attributes of the junior accessory dwelling unit that conforms with this article.

(d) Require a permitted junior accessory dwelling unit to be constructed within the walls of the proposed or existing single-family residence. For purposes of this subdivision, enclosed uses within the residence, such as attached garages, are considered a part of the proposed or existing single-family residence.

(e)

(1) Require a permitted junior accessory dwelling unit to include a separate entrance from the main entrance to the proposed or existing single-family residence.

(2) If a permitted junior accessory dwelling unit does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area.

(f) Require the permitted junior accessory dwelling unit to include an efficiency kitchen, which shall include all of the following:

(1) A cooking facility with appliances.

(2) A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit.

(Added by Stats. 2024, Ch. 7, Sec. 20. (SB 477) Effective March 25, 2024.)

Government Code Section 66329. Accessory Dwelling Units; Coastal Development Permit.

(a) Except as provided in subdivision (b), nothing in this article shall be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code), except that the local government shall, pursuant to Section 66317, either approve or deny a coastal development permit application for an accessory dwelling within 60 days of receiving a completed application, and shall not be required to hold public hearings for coastal development permit applications for accessory dwelling units. The process to approve or deny a coastal development permit application under this subdivision shall happen concurrently with the process to approve or deny an application for an accessory dwelling unit under Section 66317.

(b)

(1) If the local government does not have a certified local coastal plan or program, as defined in Section 31001 of the Public Resources Code, then the California Coastal Commission shall either approve or deny the coastal development permit application for an accessory dwelling unit within 60 days of receiving a completed application.

(2) A local government that does not have a certified local coastal plan or program shall immediately notify the California Coastal Commission that a permit application for an accessory dwelling unit is complete pursuant to Section 66317.

(3) The California Coastal Commission’s review process to approve or deny a coastal development permit application shall happen concurrently with the process to approve or deny an application for an accessory dwelling unit under Section 66317 provided that the California Coastal Commission has received a completed application for a coastal development permit pursuant to Section 65943.

(4) Notwithstanding paragraph (1), if the coastal development permit application to create or serve an accessory dwelling unit is submitted with a coastal development permit application to create or serve a new single-family or multifamily dwelling on the lot, the California Coastal Commission may delay approving or denying the coastal development permit application for the accessory dwelling unit until the California Coastal Commission approves or denies the coastal development permit application to create or serve the new single-family or multifamily dwelling.

(5) Except as provided in paragraph (4), if the California Coastal Commission has not approved or denied the completed coastal development permit application for the accessory dwelling unit within 60 days, the application shall be deemed approved.

(c) Any decision of a local government pursuant to subdivision (a) is not subject to appeal under Section 30603 of the Public Resources Code.

(Amended by Stats. 2025, Ch. 491, Sec. 2. (AB 462) Effective October 10, 2025.)

Government Code Section 66323. Accessory Dwelling Units; Quantity.

(a) Notwithstanding Sections 66314 to 66322, inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following:

(1) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling if all of the following apply:

(A) The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-family dwelling or existing space of a single-family dwelling or accessory structure and may include an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.

(B) The space has exterior access from the proposed or existing single-family dwelling.

(D) The junior accessory dwelling unit complies with the requirements of Article 3 (commencing with Section 66333).

(2) One detached, new construction, accessory dwelling unit that does not exceed four-foot side and rear yard setbacks for a lot with a proposed or existing single-family dwelling. The accessory dwelling unit may be combined with a junior accessory dwelling unit described in paragraph (1). A local agency may impose the following conditions on the accessory dwelling unit:

(A) A total floor area limitation of not more than 800 square feet.

(B) A height limitation as provided in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Section 66321, as applicable.

(3)

(A) Multiple accessory dwelling units within the portions of existing multifamily dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, if each unit complies with state building standards for dwellings.

(B) A local agency shall allow at least one accessory dwelling unit within an existing multifamily dwelling and shall allow up to 25 percent of the existing multifamily dwelling units.

(4)

(A)

(i) Multiple accessory dwelling units, not to exceed the number specified in clause (ii) or (iii), as applicable, that are located on a lot that has an existing or proposed multifamily dwelling, but are detached from that multifamily dwelling and are subject to a height limitation in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Section 66321, as applicable, and rear yard and side setbacks of no more than four feet.

(ii) On a lot with an existing multifamily dwelling, not more than eight detached accessory dwelling units. However, the number of accessory dwelling units allowable pursuant to this clause shall not exceed the number of existing units on the lot.

(iii) On a lot with a proposed multifamily dwelling, not more than two detached accessory dwelling units.

(B) If the existing multifamily dwelling has a rear or side setback of less than four feet, the local agency shall not require any modification of the existing multifamily dwelling as a condition of approving the application to construct an accessory dwelling unit that satisfies the requirements of this paragraph.

(b) A local agency shall not impose any objective development or design standard that is not authorized by this section upon any accessory dwelling unit that meets the requirements of any of paragraphs (1) to (4), inclusive, of subdivision (a).

(c) A local agency shall not require, as a condition for ministerial approval of a permit application for the creation of an accessory dwelling unit or a junior accessory dwelling unit, the correction of nonconforming zoning conditions.

(d) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing multifamily dwelling.

(e) A local agency shall require that a rental of the accessory dwelling unit created pursuant to this section be for a term longer than 30 days.

(f) A local agency may require, as part of the application for a permit to create an accessory dwelling unit connected to an onsite wastewater treatment system, a percolation test completed within the last five years, or, if the percolation test has been recertified, within the last 10 years.

(Amended by Stats. 2025, Ch. 22, Sec. 27. (AB 130) Effective June 30, 2025.)

Government Code Section 66322. Accessory Dwelling Units; Parking Requirements.

Notwithstanding any other law, and whether or not the local agency has adopted an ordinance governing accessory dwelling units in accordance with Section 66314, all of the following shall apply:

(a) A local agency shall not impose any parking standards for an accessory dwelling unit in any of the following instances:

(1) Where the accessory dwelling unit is located within one-half of one mile walking distance of public transit.

(2) Where the accessory dwelling unit is located within an architecturally and historically significant historic district.

(3) Where the accessory dwelling unit is part of the proposed or existing primary residence or an accessory structure.

(4) When on-street parking permits are required but not offered to the occupant of the accessory dwelling unit.

(5) When there is a car share vehicle located within one block of the accessory dwelling unit.

(6) When a permit application for an accessory dwelling unit is submitted with a permit application to create a new single-family dwelling or a new multifamily dwelling on the same lot, provided that the accessory dwelling unit or the parcel satisfies any other criteria listed in this subdivision.

(b) The local agency shall not deny an application for a permit to create an accessory dwelling unit due to the correction of nonconforming zoning conditions, building code violations, or unpermitted structures that do not present a threat to public health and safety and are not affected by the construction of the accessory dwelling unit.

(Added by Stats. 2024, Ch. 7, Sec. 20. (SB 477) Effective March 25, 2024.)

Government Code Section 66321. Accessory Dwelling Units; Height & Size Requirements.

(a) Subject to subdivision (b), a local agency may establish minimum and maximum unit size requirements for both attached and detached accessory dwelling units.

(b) Notwithstanding subdivision (a), a local agency shall not establish by ordinance any of the following:

(1) A minimum square footage requirement for either an attached or detached accessory dwelling unit that prohibits an efficiency unit.

(2) A maximum square footage requirement for either an attached or detached accessory dwelling unit that is less than either of the following:

(A) Eight hundred fifty square feet.

(B) One thousand square feet for an accessory dwelling unit that provides more than one bedroom.

(3) Any requirement for a zoning clearance or separate zoning review or any other minimum or maximum size for an accessory dwelling unit, size based upon a percentage of the proposed or existing primary dwelling, or limits on lot coverage, floor area ratio, open space, front setbacks, and minimum lot size, for either attached or detached dwellings that does not permit at least an 800 square foot accessory dwelling unit with four-foot side and rear yard setbacks to be constructed in compliance with all other local development standards.

(4) Any height limitation that does not allow at least the following, as applicable:

(A) A height of 16 feet for a detached accessory dwelling unit on a lot with an existing or proposed single family or multifamily dwelling unit.

(B) A height of 18 feet for a detached accessory dwelling unit on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. A local agency shall also allow an additional two feet in height to accommodate a roof pitch on the accessory dwelling unit that is aligned with the roof pitch of the primary dwelling unit.

(C) A height of 18 feet for a detached accessory dwelling unit on a lot with an existing or proposed multifamily, multistory dwelling.

(D) A height of 25 feet or the height limitation in the local zoning ordinance that applies to the primary dwelling, whichever is lower, for an accessory dwelling unit that is attached to a primary dwelling. This subparagraph shall not require a local agency to allow an accessory dwelling unit to exceed two stories.

(Added by Stats. 2024, Ch. 7, Sec. 20. (SB 477) Effective March 25, 2024.)

Government Code Section 66320. Accessory Dwelling Units; No Existing Ordinance.

(a) When a local agency that has not adopted an ordinance governing accessory dwelling units in accordance with Section 66314 receives an application for a permit to create or serve an accessory dwelling unit pursuant to this article, the local agency shall approve or disapprove the application ministerially without discretionary review pursuant to Section 66317. The permitting agency shall either approve or deny the application to create or serve an accessory dwelling unit or a junior accessory dwelling unit within 60 days from the date the permitting agency receives a completed application if there is an existing single-family or multifamily dwelling on the lot. If the permit application to create or serve an accessory dwelling unit or a junior accessory dwelling unit is submitted with a permit application to create or serve a new single-family or multifamily dwelling on the lot, the permitting agency may delay approving or denying the permit application for the accessory dwelling unit or the junior accessory dwelling unit until the permitting agency approves or denies the permit application to create or serve the new single-family or multifamily dwelling, but the application to create or serve the accessory dwelling unit or junior accessory dwelling unit shall still be considered ministerially without discretionary review or a hearing. If the applicant requests a delay, the 60-day time period shall be tolled for the period of the delay. If the local agency has not approved or denied the completed application within 60 days, the application shall be deemed approved.

(b) If a permitting agency denies an application for an accessory dwelling unit or junior accessory dwelling unit pursuant to subdivision (a), the permitting agency shall, within the time period described in subdivision (a), return in writing a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant.

(Added by Stats. 2024, Ch. 7, Sec. 20. (SB 477) Effective March 25, 2024.)

Current Status: Pending

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