All posts by Steve Tinnelly

Maintenance Responsibilities (Generally)

As discussed below, the maintenance responsibilities of an association as compared to those of its individual members (the owners of property within the association) depend primarily on whether the item or component to be maintained is classified as common area, exclusive use common area, or is included within a member’s “separate interest” (the real property owned exclusively by the member).

Common Area Maintenance
One of the primary responsibilities of an association is to maintain, repair and replace the common area improvements located throughout the association’s development. Those responsibilities are typically outlined within the provisions of an association’s declaration (CC&Rs). In the event that such provisions are absent or ambiguous, Civil Code Section 4775 establishes an association’s default maintenance, repair, and replacement responsibilities:

“…unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, and maintaining the common area.” (Civ. Code § 4775(a)(1).)

Upholding an association’s common area maintenance, repair, and replacement responsibilities places duties on the association’s board of directors to:

  • Inspect the common areas at least once every three (3) years and to prepare a reserve study in order to determine the amount of reserve funds that should be set aside for the maintenance and repair of major components which the association is obligated to maintain and which have a remaining useful life of less than thirty (30) years. (Civ. Code § 5550; See also “Reserve Study.”)
  • Investigate maintenance problems and take action to address them. While the board is granted deference by the courts in determining how the common areas are to be maintained, an association may be held liable for its failure to investigate maintenance problems and to take reasonable action:

“The judicial deference doctrine does not shield an association from liability for ignoring problems; instead it protects the Association’s good faith decisions to maintain and repair common areas….the essence of an association’s duty to maintain and repair is a duty to act based on reasoned decision making.” (Affan v. Portofino Cove HOA (2010) 189 Cal.App.4th 930,942.)

Common Area Damaged Caused by a Member
Where damage to common area is caused by the acts of a member, the member’s guest or tenant, any repair expenses incurred by the association may be recoverable through levying a reimbursement assessment against the member. (See “Reimbursement & Compliance Assessments.”)

**For more information, see “Common Area Maintenance.”

Exclusive Use Common Area Maintenance
A subset of common area is “exclusive use common area” (aka “restricted common area”). Exclusive use common area is a portion of common area designated by the CC&Rs for the exclusive use of one or more, but fewer than all, of the owners within the development. (Civ. Code § 4145(a).) Exclusive use common areas are found primarily within condominium projects (i.e., patios, balconies, porches, window boxes, etc.). The maintenance, repair, and replacement responsibilities for exclusive use common areas are typically controlled by the provisions of an association’s CC&Rs and/or condominium plan. Where those provisions are absent or ambiguous, the provisions of Civil Code Section 4775 generally allocate the maintenance responsibilities for exclusive use common areas to the individual unit owners, while the association is responsible for repairing or replacing the exclusive use common area.

**For more information, see “Exclusive Use Common Area Maintenance.”

Separate Interest Maintenance
The real property within an association’s development that is owned exclusively by a member is referred to as the member’s “separate interest.” The types of separate interests within a particular development are based upon the form of the development itself. For example, in a Planned Unit Development (or “PUD”), a member’s separate interest includes an individually owned lot (or parcel), as well as the residential structures and other improvements located on the lot. (Civ. Code § 4185(a)(3).) In a condominium project, a member’s separate interest is a “unit” that consists of a block of airspace bounded by the interior, unfinished surfaces of the unit’s perimeter walls, floors and ceilings. (Civ. Code §§ 4185(a)(2), 4125; See also “Airspace Condominium Units.”) Whether any particular component or improvement is included within a member’s separate interest may also be controlled by the provisions of the association’s CC&Rs and/or condominium plan.

Unless otherwise provided in the CC&Rs, members bear the maintenance responsibilities for their respective separate interests. (Civ. Code § 4775(a)(2). )

Duty to Enforce

An association has the authority to enforce violations of the association’s governing documents. (Civ. Code § 5975; See also “Standing to Litigate.”) Enforcement of the restrictions contained in the governing documents (i.e., in the CC&Rs) is considered the responsibility of an association. (Duffey v. Superior Court (1992) 3 Cal.App.4th 425, 431.) An association may be held liable for its failure to enforce those restrictions. (Posey v. Leavitt (1999) 229 Cal.App.3d 1236; See also “Failure to Enforce.”)

Discretion to Litigate
An association’s duty to enforce the governing documents does not necessarily require the board to litigate every violation of the association’s governing documents. A board has discretion when deciding whether to commence litigation; that discretion allows for the board to weigh various factors such as the severity of the violation at issue, the anticipated costs of litigation, and the likely outcome of litigation when deciding whether or not to litigate a particular violation. (Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858.)

Suspension of Privileges

The privileges that an association’s members have to use and enjoy the association’s common area facilities (i.e., pool, clubhouse, recreational facilities, etc.) are not absolute; they are subject to reasonable rules and regulations (“operating rules”) adopted by the association that govern the use of those areas. (Civ. Code § 4355(a); Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600).) If an association adopts and publishes a disciplinary policy (i.e., a “fine policy“) for violations of the association’s governing documents, and that policy also includes the suspension of a member’s privileges as a potential disciplinary measure, the association typically has the authority to suspend a member’s privileges while the violation remains uncorrected. Suspending a member’s privileges while the member is delinquent in assessments may also be incorporated into the association’s collection policy. However, the authority for an association to suspend privileges for assessment delinquencies or other governing document violations is not explicitly provided for in the Davis-Stirling Act and will therefore be dictated by the provisions of the association’s governing documents.

Disallowed Suspensions

  • Access to Separate Interest – An association may not deny a member physical access to the member’s separate interest (to the member’s unit or lot), either by restricting access through the common area to the separate interest, or by restricting access solely to the separate interest. (Civ. Code § 4510; See also “Rights of Access to Separate Interest.”)
  • Utility Services – The California Supreme Court has analogized associations to “landlords” in certain respects. (See Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 499.) Landlords may not “willfully cause, directly or indirectly, the interruption or termination of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, telephone, elevator, or refrigeration, whether or not the utility service is under the control of the landlord.” (Civ. Code § 789.3(a).) An association may therefore be prohibited from suspending or “shutting off” a member’s utility services for a violation, though no case law or statutes explicitly address this issue.
  • Attendance of Board Meetings – Civil Code Section 4925 grants any member the right to attend board meetings (except executive session meetings), and to address the board during open forum. (Civ. Code § 4925; See also “Board Meeting Attendance Rights” and “Open Forum.”)
  • Voting Rights –  Due to the language of Civil Code Section 5105 (regarding the election rules that an association is legally required to adopt), associations are not able to deny a ballot to a member “for any reason other than not being a member at the time when ballots are distributed.” (Civ. Code § 5105(g)(1); See also “Suspension of Voting Rights.”)

Procedural Requirements
Civil Code Section 5855 contains procedural requirements that must be satisfied before a disciplinary measure imposed upon a member becomes effective. Those requirements include:

  • Notice and Meeting (Hearing) – When the board intends to impose discipline in the form of a fine, the board must provide the member with individual notice of the meeting (hearing) where the board is to consider imposing discipline at least ten (10) days prior to the meeting. (Civ. Code § 5855(a).) However, when the discipline will involve suspension of the member’s privileges, Corporations Code Section 7341 requires at least fifteen (15) days advance notice of the meeting. (Corp. Code § 7341(c)(2).) The notice must contain, “at a minimum, the date, time and place of the meeting, the nature of the alleged violation for which a member may be disciplined…and a statement that the member has a right to attend and may address the board at the meeting.” (Civ. Code  § 5855(b).) The board must meet with the member in executive session if requested by the member. (Civ. Code § 5855(b).)
  • Notice of Decision – If the board imposes discipline, the board must, within fifteen (15) days following the action, “provide the member with a written notification of the decision, by either personal delivery or individual delivery pursuant to Section 4040.” (Civ. Code § 5855(c).)

For more information on these procedural requirements, see “Notice & Hearing Requirements.”

Civil Code Section 789.3. Landlord Interruption of Utility Services Prohibited.

(a) A landlord shall not with intent to terminate the occupancy under any lease or other tenancy or estate at will, however created, of property used by a tenant as his residence willfully cause, directly or indirectly, the interruption or termination of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, telephone, elevator, or refrigeration, whether or not the utility service is under the control of the landlord.

(b) In addition, a landlord shall not, with intent to terminate the occupancy under any lease or other tenancy or estate at will, however created, of property used by a tenant as his or her residence, willfully:

(1) Prevent the tenant from gaining reasonable access to the property by changing the locks or using a bootlock or by any other similar method or device;

(2) Remove outside doors or windows; or

(3) Remove from the premises the tenant’s personal property, the furnishings, or any other items without the prior written consent of the tenant, except when done pursuant to the procedure set forth in Chapter 5 (commencing with Section 1980) of Title 5 of Part 4 of Division 3.

Nothing in this subdivision shall be construed to prevent the lawful eviction of a tenant by appropriate legal authorities, nor shall anything in this subdivision apply to occupancies defined by subdivision (b) of Section 1940.

(c) Any landlord who violates this section shall be liable to the tenant in a civil action for all of the following:

(1) Actual damages of the tenant.

(2) An amount not to exceed one hundred dollars ($100) for each day or part thereof the landlord remains in violation of this section. In determining the amount of such award, the court shall consider proof of such matters as justice may require; however, in no event shall less than two hundred fifty dollars ($250) be awarded for each separate cause of action. Subsequent or repeated violations, which are not committed contemporaneously with the initial violation, shall be treated as separate causes of action and shall be subject to a separate award of damages.

(d) In any action under subdivision (c) the court shall award reasonable attorney’s fees to the prevailing party. In any such action the tenant may seek appropriate injunctive relief to prevent continuing or further violation of the provisions of this section during the pendency of the action. The remedy provided by this section is not exclusive and shall not preclude the tenant from pursuing any other remedy which the tenant may have under any other provision of law.

Fine Policy & Fine Schedule

There is no legal requirement for an association to impose monetary penalties (fines) on members for violations of the association’s governing documents, though such requirements may be contained within the provisions of an association’s governing documents. If an association adopts a policy for imposing fines, Civil Code Section 5850 requires the association to adopt a “schedule” of fines that may be imposed for violations, and to distribute the fine schedule to the membership as part of the association’s annual policy statement. (Civ. Code §§ 5310(a)(8), 5850(a).)

Fines Restricted to Amounts Stated in Fine Schedule
Any fine that is imposed on a member for a violation of the governing documents may not exceed the amount of the applicable fine stated in the fine schedule that is in effect at the time of the violation. (Civ. Code § 5850(c).)

Amending the Fine Policy & Fine Schedule
The fine policy and fine schedule of an association constitutes an “operating rule” within the meaning of Civil Code Section 4355. (Civ. Code § 4355(a)(3).) Accordingly, a change to the fine policy or fine schedule must be performed in accordance with the rule change procedure mandated by Civil Code Section 4360. In sum, that procedure requires thirty (30) days advance notice of the proposed rule change, a decision to make the change at a board meeting, and notice to the membership within fifteen (15) days after the decision has been made. (See “Adopting & Amending Operating Rules.”)

Relocation Costs

Relocation Costs Borne by Homeowner
The scope of items which an association is responsible to maintain and repair can be significant. This is especially true in  condominium projects;  the structural elements of the residential buildings housing the condominium units are often classified as common area that is maintained and repaired by the association. (See “Common Area Maintenance” and “Airspace Condominium Units.”) Undertaking such maintenance and repairs may require owners and occupants within the association’s development to temporarily vacate their units and, as a result, incur hotel expenses and other relocation costs while the repairs are being performed. In these instances, Civil Code Section 4775 states that relocation costs are to be borne by the owners:

“The costs of temporary relocation during the repair and maintenance of the areas within the responsibility of the association shall be borne by the owner of the separate interest affected.” (Civ. Code § 4775(c).)

Termite Treatment
When an association’s maintenance or repair efforts include the treatment of “wood-destroying pests or organisms” (i.e., termites), the occupants which are required to vacate their units during the treatment period are responsible to bear their respective relocation costs, and the association is additionally required to provide advance notice to the owners and the occupants of that fact. (Civ. Code § 4785(b); See also “Termites & Wood-Destroying Pests.”)

Notice & Hearing Requirements

Civil Code Section 5855 sets forth procedural requirements that must be satisfied when an association’s board of directors imposes discipline (i.e., imposes a fine or suspends privileges) on a member for a violation of the association’s governing documents, or imposes a reimbursement assessment against a member for repairing damage caused to the common area as a result of the member, the member’s guest or tenant. Those procedural requirements are outlined below and may vary depending upon the terms of the association’s governing documents.

Notice of Violation & Hearing
At least ten (10) days prior to the meeting (the “hearing”) at which the board will decide to impose discipline, the board must notify the member in writing, by either personal delivery or individual delivery, pursuant to Civil Code Section 4040. (Civ. Code § 5855(a); See also “Document & Notice Delivery Methods.”) If the disciplinary measure will involve suspension of the member’s membership privileges, the notice must be provided at least fifteen (15) days in advance of the hearing. (Corp. Code § 7341(c).)

Contents of Notice – At a minimum, the notification must include:

  • The date, time and place of the hearing;
  • The nature of the alleged violation for which the member may be disciplined or the nature of the damage to the common area for which a reimbursement assessment may be imposed; and
  • A statement that the member has a right to attend and may address the board at the hearing. (Civ. Code § 5855(b).)

Hearing Where Board Decides to Impose Discipline
The board may conduct the hearing in executive session if it so desires. (Civ. Code § 4935(a).) However, if the member requests for the hearing to be conducted in executive session, the board must honor the member’s request, and also allow for the member to attend the executive session hearing. (Civ. Code §§  4935(b); 5855(b).) It is common practice for disciplinary hearings to be conducted in executive session even in the absence of a member’s request for the same.

Decision Must be Based Upon Findings – The decision to impose discipline should be based upon findings made by the board regarding the alleged violation for which discipline is being imposed. (Ironwood Owners Assn. IX v. Solomon (1986) 178 Cal. App. 3d 766.) Those findings are necessary to demonstrate that the board’s decision was made in good faith, was reasonable and not arbitrary or capricious. (Id.)

Notice of Decision
If the board imposes discipline or a reimbursement assessment, the board is required to, within fifteen (15) days following the action, provide the member with written notification of the board’s decision by either personal delivery or individual delivery pursuant to Civil Code Section 4040. (Civ. Code § 5855(c); See also “Document & Notice Delivery Methods.”)

Ironwood Owners Association IX v. Solomon

(1986) 178 Cal.App.3d 766

[Architectural Control; Enforcement] A HOA must show that it has followed its own standards and procedures when taking action to enforce violations of its governing documents.

Erwin & Anderholt and Michael J. Andelson for Defendants and Appellants.
Guralnick, McClanahan & Zundel, Wayne S. Guralnick and Judith L. Pilson for Plaintiff and Respondent.

OPINION
KAUFMAN, J.

Defendants Bernard and Perlee Solomon (Solomons) appeal from a summary judgment in favor of plaintiff Ironwood Owners Association IX (Association). The judgment granted the Association a mandatory injunction compelling the removal of eight date palm trees from the Solomons’ property. The Association was also granted declaratory relief, the court finding the Solomons in violation of the Association’s declaration [769] of covenants, conditions and restrictions (CCRs) for having planted the date palm trees without previously filing a plan with and obtaining the written approval of the Association’s architectural control committee.

Facts[FN 1]

The Solomons purchased a residential lot in the Ironwood Country Club, a planned unit development, in March 1979. They do not dispute that they bought the property with full notice of the CCRs, which were duly recorded in Riverside County in December 1978.

The date palm trees in question were planted sometime during July 1983 and have remained there since. The Solomons have admitted and it is therefore undisputed that they did not file a plan regarding the palm trees with the Association’s architectural control committee and accordingly never received a permit or approval for the landscaping addition.

The Association is, pursuant to section 1.02 of the CCRs, “a non-profit California corporation, the members of which [are] all of the several Owners of the Real Property.” The Association’s members elect a board of directors to conduct the Association’s business affairs. Under section 2.04[FN 2] the board has the power to “enforce all of the applicable provisions” of the Association’s bylaws, its articles of incorporation, and the CCRs (subd. (a)), to “delegate any of the powers or duties imposed upon it herein to such committees, officers or employees as the Board shall deem appropriate” (subd. (e)), and to “take such other action and incur such other obligations … as shall be reasonably necessary to perform the Association’s obligations hereunder or to comply with the provisions or objections [sic] of [the CCRs]” (subd. (i)).

The architectural control committee is a body of three persons first appointed by Silver Spur Associates, the original owner and conveyor of the property; committee vacancies are now filled by the board of directors. The following provisions from the CCRs describe the powers and duties of and procedures to be followed by the architectural control committee:

“4.02. Duties of architectural control committee. All plans and specifications for any structure or improvement whatsoever to be erected on or moved upon or to any Residential Lot, and the proposed location thereof on any such Residential Lot, and construction material, the roofs and exterior [770] color schemes, any later changes or additions after initial approval thereof, and any remodeling, reconstruction, alterations or additions thereto on any such Residential Lot shall be subject to and shall require the approval in writing, before any such work is commenced, of the Architectural Control Committee.

“4.03. Submission of Plans. There shall be submitted to the Architectural Control Committee two complete sets of plans and specifications for any and all proposed Improvements to be constructed on any Residential Lot, and no structures or improvements of any kind shall be erected, altered, placed or maintained upon any Residential Lot unless and until the final plans, elevations and specifications therefor have received such written approval as herein provided. Such plans shall include plot plans showing the location on the Residential Lot of the building, wall, fence or other structure proposed to be constructed, altered, placed or maintained thereon, together with the proposed construction material, color schemes for roofs, and exteriors thereof, and proposed landscape planting.

“4.04. Approval of Plans. The Architectural Control Committee shall approve or disapprove plans, specifications and details within thirty days from the receipt thereof or shall notify the Owner submitting them that an additional period of time, not to exceed thirty days, is required for such approval or disapproval. Plans, specifications and details not approved or disapproved, or for which time is not extended within the time limits provided herein, shall be deemed approved as submitted. One set of said plans and specifications and details with the approval or disapproval of the Architectural Control Committee endorsed thereon shall be returned to the Owner submitting them and the other copy thereof shall be retained by the Architectural Control Committee for its permanent files. Applicants for Architectural Control Committee action may, but need not, be given the opportunity to be heard in support of their application.

“4.05. Standards for Disapproval. The Architectural Control Committee shall have the right to disapprove any plans, specifications or details submitted to it if: (i) said plans do not comply with all of the provisions of [the CCRs]; (ii) the design or color scheme of the proposed building or other structure is not in harmony with the general surroundings of the Real Property or with the adjacent buildings or structures; (iii) the plans and specifications submitted are incomplete; or (iv) the Architectural Control Committee deems the plans, specifications or details, or any part thereof, to be contrary to the best interest, welfare or rights of all or any of the other Owners.”

[771] Discussion

1. CCRs Require Submission of Landscaping Plan

(1a) We have concluded the court ruled correctly that the CCRs require the submission of a plan to the architectural control committee for substantial landscaping changes such as the planting of eight tall date palm trees. Section 4.02 gives the committee power and duty to review “additions” to residential lots and we interpret this term broadly to include any substantial change in the structure and appearance of buildings and landscapes. We note that in drafting the CCRs, the original conveyor of the subdivision property included section 8.02(b) which provides for liberal construction of its provisions.[FN 3] (See also Civ. Code, § 1370 [formerly Civ. Code, § 1359].) Furthermore, “proposed landscape planting” is specifically enumerated in section 4.03 as an item to be described in plans for such additions filed with the committee, which clearly shows the committee was to take landscaping into account when it weighed the esthetic aspects of plans it received.

(2) (See fn. 4.), (3) Because no extrinsic evidence bearing on the interpretation of these provisions of the CCRs was shown to exist,[FN 4] this question was solely one of law (Estate of Dodge (1971) 6 Cal.3d 311, 318 [98 Cal. Rptr. 801, 491 P.2d 385]) and was therefore properly determined by the court on summary judgment. (See Milton v.Hudson Sales Corp. (1957) 152 Cal. App.2d 418, 433 [313 P.2d 936].) (1b) The court’s declaratory conclusion that the Solomons were and are required under the CCRs to submit a plan to the architectural control committee proposing the addition of the eight date palm trees will be affirmed.

2. Association’s Request for Injunction Does Pose Questions of Material Fact

The Association’s request for a mandatory injunction compelling the removal of the Solomons’ palm trees was in effect a request to enforce an administrative decision on its part disapproving the palm trees as not meeting the standards set forth in section 4.05 of the CCRs. That this is so is [772] demonstrated by the final letter sent by the Association’s counsel to the Solomons demanding removal of the palm trees: “Despite the provisions [of the CCRs] referenced above, you unilaterally installed the date palm trees on your property, substantially changing the uniform development, harmony and balance of the improvements within the Association. The fact that you did not obtain approval from the Architectural Control Committee is not even at issue.” (Italics added.)

(4a) Despite the Association’s being correct in its contention the Solomons violated the CCRs by failing to submit a plan, more was required to establish its right to enforce the CCRs by mandatory injunction.[FN 5] (5) When a homeowners’ association seeks to enforce the provisions of its CCRs to compel an act by one of its member owners, it is incumbent upon it to show that it has followed its own standards and procedures prior to pursuing such a remedy, that those procedures were fair and reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious. (Cohen v. Kite Hill Community Assn. (1983) 142 Cal. App.3d 642, 650-651 [191 Cal. Rptr. 209], and cases there cited; Laguna Royale Owners Assn. v. Darger (1981) 119 Cal. App.3d 670, 683-684 [174 Cal. Rptr. 136]; cf. Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 550 [116 Cal. Rptr. 245, 526 P.2d 253]; Lewin v. St. Joseph Hospital of Orange (1978) 82 Cal. App.3d 368, 388 [146 Cal. Rptr. 892]; also cf. Code Civ. Proc., § 1094.5.)

“The criteria for testing the reasonableness of an exercise of such a power by an owners’ association are (1) whether the reason for withholding approval is rationally related to the protection, preservation or proper operation of the property and the purposes of the Association as set forth in its governing instruments and (2) whether the power was exercised in a fair and nondiscriminatory manner.” (Laguna Royale Owners Assn. v. Darger, supra, 119 Cal. App.3d 670, 683-684.)

(4b) Several questions of material fact therefore remained before the trial court when it granted summary judgment in this case. First is the question whether the Association followed its own procedures as set forth in the CCRs. According to the CCRs the Association is governed by a board of directors, but there is nothing in the record showing any decision in respect to this matter by the Association’s board of directors. Secondly, the record does not document and the parties do not indicate that the architectural [773] control committee ever met to consider whether or not the Solomons’ palm trees violated the standards set forth in section 4.05 of the CCRs. The record contains no indication that either the board or the architectural control committee made any findings, formal or informal, as to whether the palm trees met the standard in section 4.05 upon which the disapproval of the palm trees was apparently based.

There is some indication in the record that the Association attempted to assess the esthetic impact of the palm trees on the community. The matter was discussed at several meetings, members of the board communicated in writing and over the phone with Bernard Solomon, and at least two “polls” were conducted to elicit community opinion. As a matter of law, however, these acts on the part of the Association without appropriate decisions by the governing board or the proper committee did not constitute a reasonable application of the CCRs to the palm trees dispute. The CCRs carefully and thoroughly provide for the establishment of an Architectural Control Committee and impose upon it specifically defined duties, procedures and standards in the consideration of such matters. The record as it stands discloses a manifest disregard for these provisions: whatever decision was made does not appear to be that of the governing body or the committee designated to make the decision; no findings of any sort bridge the analytic gap between facts and the conclusions of the decisionmaker, whoever that was; and the record provides no means for ascertaining what standard was employed in the decisionmaking process.[FN 6]

(6) To be successful on a motion for summary judgment, the moving party must show it is entitled to judgment as a matter of law. (Baldwin v. State of California (1972) 6 Cal.3d 424, 439 [99 Cal. Rptr. 145, 491 P.2d 1121]; Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417 [42 Cal. Rptr. 449, 398 P.2d 785].) (4c) Having failed to establish that its actions were regular, fair and reasonable as a matter of law, the Association was not entitled to a mandatory injunction on summary judgment and the trial court erred in granting that relief.

Disposition

That portion of the trial court’s judgment granting the Association declaratory relief and affirming its interpretation of the declaration of covenants, [774] conditions and restrictions (¶¶ 1 and 2) is affirmed. Otherwise the judgment is reversed. Each party shall bear its own costs on appeal.

Rickles, Acting P.J., and McDaniel, J., concurred.

[FN. 1] The facts as contained in the record are largely undisputed and are drawn from the complaint, the parties’ statements in motions, briefs and on deposition, and supporting declarations.

[FN. 2] All further citations will be to the CCRs unless otherwise noted.

[FN. 3] Section 8.02(b) provides: “The provisions of [the CCRs] shall be liberally construed to accomplish [their] purpose of creating a uniform plan for the operation of the project for the mutual benefit of all Owners.”

[FN. 4] At oral argument counsel for the Solomons indicated that in Mr. Solomon’s deposition he stated it was not his understanding that landscaping restrictions of this sort applied to the Solomons’ property or that the Solomons were required to submit plans for approval of the date palms. But evidence of Mr. Solomon’s subjective belief would have been irrelevant; the test is an objective one. (See 1 Witkin, Summary of Cal. Law (1973) Contracts, § 522, p. 445, and authorities there cited.)

[FN. 5] Even had the basis for the injunction been solely the failure to submit plans for approval, the record would still be deficient. There is nothing showing final board action on that basis either. Moreover, had that been the sole basis, the injunction should properly have been in the alternative, e.g., either to remove the trees or submit a plan. Here the order was unconditional and absolute.

[FN. 6] From comments made at oral argument it may appear that these things were in fact done and are simply not reflected in the record. That of course may be properly shown in subsequent proceedings.

Fines (Monetary Penalties)

Unless otherwise stated in an association’s governing documents, an association may adopt a “policy imposing any monetary penalty, including any fee, on any association member for a violation of the governing documents, including any monetary penalty relating the activities of a guest or a tenant of a member.” (Civ. Code 5850(a).) These “monetary penalties” are commonly known and referred to as “fines.” Fines are used in order to deter violations of the governing documents, as well as to compel compliance from a member, guest, or tenant who is in violation.

Authority to Impose Fines
The language of Section 5850 may not “be construed to create, expand, or reduce the authority of the board to impose monetary penalties on a member for a violation of the governing documents.” (Civ. Code § 5865.) However, the California Court of Appeal has indicated that the authority to impose fines need not be explicitly provided for in an association’s CC&Rs in order for the board to adopt a fine policy and utilize fines in its enforcement efforts. (Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600, 1613-1614.)

Distinct from Reimbursement Assessments
“Reimbursement assessments” (aka “compliance assessments”) refer to special assessments levied against an individual member to reimburse the association for its costs incurred in repairing damage to the common area caused by the member, his guest or tenant. (See “Reimbursement & Compliance Assessments.”) By contrast, fines are imposed in order to deter violations and compel compliance; they are not necessarily tied to any expenses incurred by the association as a result of a violation.

Fine Policy & Fine Schedule
The imposition of any fine must be in accordance with the association’s published fine policy and fine schedule that is adopted by the board and distributed to each member as part of the association’s annual policy statement. (Civ. Code § 5850(c); See also “Fine Policy & Fine Schedule.”)

Procedural Requirements
Civil Code Section 5855 contains procedural requirements that must be satisfied before a fine imposed upon a member becomes effective. Those requirements include:

  • Notice and Meeting (Hearing) – The board must provide the member with individual notice of the meeting (hearing) where the board is to consider imposing the fine at least ten (10) days prior to the meeting. (Civ. Code § 5855(a).) The notice must contain, “at a minimum, the date, time and place of the meeting, the nature of the alleged violation for which a member may be disciplined…and a statement that the member has a right to attend and may address the board at the meeting.” (Civ. Code  § 5855(b).) The board must meet with the member in executive session if requested by the member. (Civ. Code § 5855(b).)
  • Notice of Decision – If the board imposes the fine, the board must, within fifteen (15) days following the action, “provide the member with a written notification of the decision, by either personal delivery or individual delivery pursuant to Section 4040.” (Civ. Code § 5855(c).)

For more information on these procedural requirements, see “Notice & Hearing Requirements.”

No Liens Allowed for Fines
When a member fails to remit payment of assessments owed to the association in a timely fashion, the association may record an assessment lien against the member’s property to act as security for the payment of the member’s assessment debt. (Civ. Code § 5675(a); See also “Notice of Delinquent Assessment (Assessment Lien).”) However, a “monetary penalty” (i.e., a fine) “imposed by the association as a disciplinary measure for failure of a member to comply with the governing documents…may not be characterized nor treated in the governing documents as an assessment that may become a lien against the member’s separate interest enforceable by the sale of the interest” through nonjudicial foreclosure. (Civ. Code § 5725(b).)

Discriminatory Restrictions in Governing Documents

In the context of housing and residential use, Section 12955 of the Government Code makes it unlawful to discriminate against individuals because of race, religion, sex, gender, national origin, familial status, or disability. Section 12955 additionally defines discrimination to include the existence of a restrictive covenant that makes housing opportunities unavailable to persons because of their race, religion, sex, gender, national origin, familial status, etc. (Gov. Code § 12955(l).)

Civil Code Section 4225 explicitly addresses discriminatory restrictions in the context of association governing documents. It prohibits the CC&Rs or other governing documents of an association from containing restrictive covenants that violate Section 12955. (Civ. Code § 4225(a).)

Duty to Delete Discriminatory Restrictions
If an unlawful restrictive covenant is contained within the provisions of an association’s governing documents (i.e., in its CC&Rs), the association’s board of directors has the affirmative obligation to amend the governing documents for the purpose of removing the unlawful restrictive covenant:

“(b) Notwithstanding any other provision of law or provision of the governing documents, the board, without approval of the members, shall amend any declaration or other governing document that includes a restrictive covenant prohibited by this section to delete the restrictive covenant, and shall restate the declaration or other governing document without the restrictive covenant but with no other change to the declaration or governing document.” (Civ. Code § 4225(b).)

Amending CC&Rs to Delete Discriminatory Restrictions – If the CC&Rs are amended to delete a discriminatory restriction, the amended and restated CC&Rs must be recorded in each county in which the association’s development is located. (Civ. Code § 4225(c).)

Amending Articles to Delete Discriminatory Restrictions – If the articles of incorporation are amended to delete a discriminatory restriction, the board must file a certificate of amendment with the Secretary of State pursuant to Section 7814 of the Corporations Code. (Civ. Code § 4225(c).)

Failure to Remove Discriminatory Restrictions
If a written request is delivered to an association requesting that a discriminatory restriction be deleted in accordance with Civil Code Section 4225(a), the association has thirty (30) days after receipt of the request to delete the discriminatory restriction. (Civ. Code § 4225(d).) If the association fails to remove the discriminatory restriction within that time period, the Department of Fair Employment and Housing, a city or a county in which the association is located, or any person may bring an action (i.e., a lawsuit) against the association for injunctive relief to compel the association to delete the discriminatory restriction. (Civ. Code § 4225(d).) The Court may award attorney’s fees to the prevailing party in such an action. (Civ. Code § 4225(d).)

Disclaimer of Unlawful Restrictive Covenants
Section 12956.1 of the Government Code additionally requires the following notice to be included on the cover page of an association’s CC&Rs as to the how discriminatory restrictions contained in the CC&Rs would be in violation of Section 12955:

 “If this document contains any restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to Section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.”

The notice must be printed in at least 14-point boldface type. (Gov. Code § 12956.1(b).)

Criminal Liability for Racially Restrictive Covenant – Any person who records a document for the express purpose of adding a racially restrictive covenant is guilty of a misdemeanor.  (Gov. Code § 12956.1(c).)