Category Archives: Topic Index

Caregivers within Senior Communities

Civil Code Section 51.3 (and Section 51.11 for communities within Riverside County) provides senior communities located within California the authority to implement and enforce age-restrictions for their residents. (See “Senior Communities.”) Those restrictions must include a requirement that each unit be occupied by at least one “qualifying resident”—meaning a person 62 years of age or older, or 55 years of age or older depending on the category of the senior community. (Civ. Code §§ 51.3(b)(1), 51.11(b)(1).) However, Civil Code Sections 51.3 and 51.11 also allow for other categories of persons whom do not meet the standard of a “qualifying resident” to also reside in a unit with a qualifying resident. (Civ. Code §§ 51.3(c), 51.11(c).) One of those categories includes “permitted health care residents” (i.e., caregivers).

“Permitted Health Care Resident” Defined
A “permitted health care resident” is defined as a person hired to provide live-in, long term, or terminal health care to a qualifying resident, or a family member of the qualifying resident providing that care. (Civ. Code §§ 51.3(b)(7), 51.11(b)(7).) The care provided by a permitted health care resident must be “substantial in nature,” and also must provide either medical treatment or “assistance with necessary daily activities,” or both. (Civ. Code §§ 51.3(b)(7), 51.11(b)(7).) Notably, neither Section 51.3 nor 51.11 set forth any restrictions on the age of permitted health care residents.

Continuation of Occupancy in the Absence of Qualifying Resident
When a qualifying resident temporarily vacates a unit, the qualifying resident’s permitted health care resident has limited rights to continue his/her occupancy, residency or use of the unit if both of the following are applicable:

  • The qualifying resident’s absence was due to hospitalization or other necessary treatment, and the qualifying resident expects to return to the unit within ninety (90) days from the day the absence began; (Civ. Code §§ 51.3(b)(7)(A), 51.11(b)(7)(A)) and
  • The absent qualifying resident (or his/her agent) submits a written request to the association’s board of directors stating that the qualifying resident desires that the permitted health care resident be allowed to remain in order to be present in the unit when the qualifying resident returns. (Civ. Code §§ 51.3(b)(7)(B), 51.11(b)(7)(B).)

Discretionary Extension of Time
In addition to the foregoing, upon a written request from the qualifying resident (or his/her agent), the board has the discretion to allow a permitted health care resident to remain in the unit for any additional ninety (90) days from the day when the qualifying resident’s absence began, but only if it “appears that the [qualifying resident] will return within a period of time not to exceed an additional 90 days.” (Civ. Code §§ 51.3(b)(7), 51.11(b)(7).)

Compensation of Caregivers
The rights of a permitted health care resident to occupy the unit extends to periods of time when the permitted health care resident is providing care to a qualifying resident “for compensation.” Compensation does not solely include monetary payment, but may also include “provisions of lodging and food in exchange for care.” (Civ. Code § 51.3(j).)

Senior Communities

Senior communities (aka “active adult” communities) engage in a form of discrimination through the imposition of age restrictions for their communities. The legal authority for senior communities to do so is provided under both federal and state statutes.

Federal Statutes: FFHA & HOPA
The Federal Fair Housing Act prohibits discrimination in the sale, rental and financing of residential of dwellings based upon familial status. Its provisions generally bar restrictions in an association’s governing documents (i.e., its CC&Rs) that serve to exclude children from the association’s development. In 1988 Congress created an exemption to the provisions barring discrimination on the basis of familial status for those housing developments that qualified as housing for persons age 55 and older (senior communities). This exemption was then refined through the Housing for Older Persons Act of 1995 (HOPA). HOPA is administered through by Department of Housing and Urban Development (HUD).

Qualification Requirements
To qualify as a senior community, a housing development or homeowners association must satisfy the following requirements:

  • At least eighty percent (80%) of the occupied properties must have at least one occupant that is 55 years of age or older;
  • The association must publish and adhere to policies that demonstrate its intent to operate as a senior community for persons 55 years of age or older; and
  • The association must comply with age-verification procedures to ensure compliance with the age requirements.

Prior Failure to Comply with Age-Verification Requirements
If an association has consistently maintained the required 80% threshold but has previously failed to comply with HOPA’s age-verification requirements, that in itself will not disqualify the association from being afforded HOPA’s protections. (Balvage v. Ryderwood Improvement Services Assn. (9th Cir. 2011) 642 F.3d  765.)

California Statutes: Unruh & Civil Code § 51.3
California has provided protections against discrimination through the Unruh Civil Rights Act found at Civil Code Section 51. An exemption for senior citizen developments similar to that provided under HOPA is codified at Civil Code Section 51.3. Section 51.3 generally requires that an association’s CC&Rs set forth the limitations on age, where such limitations require that:

  • Each unit must be occupied by at least one (1) “senior citizen” or “qualifying resident,” and
  • Each other resident within a unit must be either a “qualified permanent resident,” a “permitted health care resident,” or another person whose occupancy is permitted under Civil Code Section 51.4(b). (Civ. Code § 51.3(c).)

“Senior Citizen” and “Qualifying Resident” Defined
Civil Code Section 51.3 defines a “qualifying resident” or “senior citizen” as a person 62 years of age or older, or 55 years of age or older depending on the category of the senior community. (Civ. Code § 51.3(b)(1).)

“Qualified Permanent Resident” Defined
Civil Code Section 51.3 defines  a “qualified permanent resident” as a person who meets both of the following requirements:

  • Was residing with the qualifying resident prior to the qualifying resident’s death, hospitalization or other prolonged absence, or prior to the dissolution of marriage with the qualifying resident; (Civ. Code § 51.3(b)(2)(A)) and
  • Was 45 years of age or older, or was a spouse, cohabitant or person providing primary physical or economic support to the qualifying resident. (Civ. Code § 51.4(b)(2)(B).)

A qualified permanent resident also includes a disabled person who is a child or grandchild of the qualifying resident or a qualified permanent resident who needs to live with the qualifying resident or qualified permanent resident because of the disabled person’s disability. (Civ. Code § 51.3(b)(3).)

“Permitted Health Care Resident” Defined
Civil Code Section 51.3 defines a “permitted health care resident” as a person hired to provide “substantial” live-in, long term, or terminal health care to a qualifying resident (i.e., a caregiver), or a family member of the qualifying resident providing that care. (Civ. Code § 51.3(b)(7).) Section 51.3 also provides some limited rights for permitted health care residents to continue residing in the unit in the absence of the qualifying resident. (Civ. Code § 51.3(b)(7); See also “Caregivers within Senior Communities.”)

Senior Communities within Riverside County: Civil Code § 51.11
The provisions of Civil Code Section 51.3 are essentially mirrored in Civil Code Section 51.11. Section 51.11 is applicable only to senior communities located within Riverside County. (Civ. Code § 51.11(j).)

Enforcement
Once a senior community has been established, its age restrictions are legally enforceable. (Huntington Landmark v. Ross (1989) 213 Cal.App.3d 1012.)

Related Links

HUD – Final Regulation Implementing HOPA

Alcohol or Drug Abuse Recovery or Treatment Facilities

Similar to “family day care homes” and “residential care facilities,” restrictions in an association’s governing documents (i.e., in its CC&Rs) that prohibit the non-residential uses of properties may not be used to prohibit a property from operating as a “alcoholism or drug abuse recovery or treatment facility” (i.e., a sober living home) that services six (6) or fewer persons:

“For the purposes of any contract, deed, or covenant for the transfer of real property executed on or after January 1, 1979, an alcoholism or drug abuse recovery or treatment facility which serves six or fewer persons shall be considered a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.” (H&S Code § 11834.25.)

Related Links

Sober Living Homes in your HOA?
-Published on HOA Lawyer Blog (March 30, 2016)

Residential Care Facilities

Similar to “family day care homes” and “alcohol or drug abuse recovery or treatment facilities” (i.e., sober living homes), restrictions in an association’s governing documents (i.e,. in its CC&Rs) that prohibit the non-residential uses of properties may not be used to prohibit a “residential care facility” that services six (6) or fewer persons:

“For the purposes of any contract, deed, or covenant for the transfer of real property executed on or after January 1, 1979, a residential facility which serves six or fewer persons shall be considered a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.” (H&S Code § 1566.5.)

“Residential Care Facility” Defined
A residential care facility is defined under the California Community Care Facilities Act as:

“…any family home, group care facility, or similar facility” determined by the Director of Social Services that provides  “for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.” (H&S Code § 1502(a)(1).)

The operation of such a facility is considered to be a “residential use of a property and a use of a property by a single family.” (H&S Code § 1566.5)

Family Day Care Homes

Many sets of association CC&Rs contain provisions that prohibit the commercial use of homes within the association’s development or any uses other than for a “single-family” dwelling.  The California Legislature has limited the extent to which such provisions may used by a HOA to prohibit an owner or a tenant from operating his residence as a “family day care home”:

“…It is the intent of the Legislature that family day care homes for children should be situated in normal residential surroundings so as to give children the home environment which is conducive to healthy and safe development. It is the public policy of this state to provide children in a family day care home the same home environment as provided in a traditional home setting. The Legislature declares this policy to be of statewide concern with the purpose of occupying the field to the exclusion of municipal zoning, building and fire codes and regulations governing the use or occupancy of family day care homes for children, except as specifically provided for in this chapter, and to prohibit any restrictions relating to the use of single-family residences for family day care homes for children except as provided by this chapter.” (H&S Code § 1597.40(a).)

The Legislature has declared family day care homes to be immune from restrictions relating to the use of homes for single-family purposes. (H&S Code § 1597.40(a).) The Legislature has also rendered void any restriction contained within an association’s governing documents that “restricts or prohibits directly, or indirectly limits, the acquisition, use, or occupancy of [a] property for a family day care home.” (H&S Code § 1957.40(c).)

Similar protections exist for the operation of “residential care facilities” and “alcohol or drug abuse recovery or treatment facilities” (i.e., sober living homes).

“Family Day Care Home” Defined
A “family day care home” is defined under Health & Safety Code Section 1596.78(a) as a home that:

  • Regularly provides care, protection and supervision for fourteen (14) or fewer children;
  • In the provider’s own home;
  • For periods of less than twenty-four (24) hours per day;
  • While the parents or guardians are away; and
  • Is either a “large family day care home” or a “small family day care home.”

Whether a family day care home is either a “large” or “small” family day care home is dependent upon the amount of children in the home that are being provided care, inclusive of those children under the age of 10 who reside at the home. (H&S Code § 1596.78(b)-(c).)

Licensing, Insurance & Operational Requirements

Licensing Requirements – the operator of a family day care home may be required to obtain proper licensing. The licensing requirements vary depending upon whether the family day care home is a “large” family day care home or a “small” family day care home. (H&S Code §§ 1597.44-46; 1597.4645.)

Insurance Requirements – the operator of a family day care home must maintain (1) liability insurance in the amount of at least $100,000 per occurrence and $300,000 aggregate, or a bond in the aggregate amount of $300,000; or (2) affidavits signed by each parent with a child enrolled in the family day care home that states that the parent knows that the day care home does not carry insurance or a bond. If there is insurance or a bond, a HOA may require that it be named as an additional insured, provided that the HOA pays any additional premium assessed for this coverage. (H&S Code §1597.531(b).)

Operational Requirements – the operator of a family day care home must comply with all regulations and operating procedures imposed on family day care homes by local and state laws. (See California’s “Manual of Policies and Procedures” for family day care homes.)

Family Day Care Homes within Age-Restricted (Senior) Developments
The provisions of the Health & Safety Code relating to family day care homes do not explicitly address whether they also apply to age-restricted (senior) developments.

Related Links

SB 234 Signed! Keeping the Kids Close to Home Act
-Published on HOA Lawyer Blog (October 2019)

Architectural Committee

An association’s governing documents may require association approval before a member may make a physical improvement or modification to the member’s property or to association common area. (Civ. Code § 4765(a); See also “Architectural Application & Approval Process.”) Such improvements and modifications are regulated by the association’s architectural standards. Administering the architectural standards and the application/approval process are tasks which are typically performed by the association’s architectural committee.

Depending upon the provisions of the association’s governing documents, the architectural committee may be referred to as any of the following:

  • “Architectural Committee”
  • “Architectural Control Committee”
  • “Architectural Review Committee”
  • “Art Jury”
  • “Design Review Committee”
  • “Environmental Control Committee”
  • “Landscape Review Committee”

Many sets of association CC&Rs contain provisions that mandate the formation of an architectural committee that is separate from the board of directors. Where such provisions are absent, the board may either serve as the architectural committee or delegate its architectural control powers to an architectural committee that is created by the board. (See “Delegating Duties & Authority.”)

Scope of Authority
The scope of authority exercised by an architectural committee is impacted by the type of common interest development that the association was formed to manage:

PUDs Condominiums
Landscaping improvements Balcony flooring surfaces, plants, and furniture
Lot setback requirements Hardwood and interior flooring installations
Structure and improvement design, placement, and height Plumbing and electrical modifications
Exterior finishes, paint colors, roofing materials Window tinting, design, and coverings
Fencing Satellite dish placement
Satellite dishes EV charging stations
Solar panels
EV charging stations

Code Compliance
An architectural committee’s approval powers extend to compliance with an association’s governing documents and do not serve as a substitute for any ancillary requirements imposed upon a member by local building codes or county ordinances. In most cases, a member’s proposed improvements or modifications will require separate approvals from the association’s architectural committee as well as local building/code enforcement entities.

Decision Requirements
Any decision regarding a member’s architectural application must:

If an application is disapproved (rejected), the written decision of the architectural committee must include both an explanation of why the application was disapproved and a description of the procedure through which the member may request reconsideration of the decision by the board. (Civ. Code § 4765(a)(4).)

Disapproval & Reconsideration (Appeal)
Where a member’s application is disapproved by an architectural committee, the member is generally entitled to reconsideration by the board at an open meeting of the board. (Civ. Code § 4765(a)(5).) However, if the initial disapproval of the application was made by the board “or a body that has the same membership as the board” at a duly held board meeting, no reconsideration is required. (Civ. Code § 4765(a)(5).)

Architectural Committee Meeting Minutes
Because architectural committees are typically comprised of volunteer association members and not members of the association’s board of directors, the meetings of an architectural committee are not “board meetings” subject to the requirements and restrictions contained in the Open Meeting Act. However, to the extent that an architectural committees has “decisionmaking authority,” Civil Code Section 5210 requires the architectural committee to keep and maintain minutes of its meetings, and to make such minutes available for inspection by the association’s members within certain timeframes. (See “Committee Meeting Minutes.”)

Satellite Dishes on Common Area Roofs

Homeowners and renters within associations have rights under state and federal statutes to install satellite dishes on their respective “separate interests” (their lots or units), as well as exclusive use common areas such as patios or balconies, notwithstanding restrictions in an association’s governing documents to the contrary. (See “Satellite Dishes (Generally).”) In the context of condominium developments, associations may reasonably restrict (and in some instances prohibit) homeowners and renters from installing satellite dishes on common area roofs.

Townhomes with Exclusive Use Roofs
If an association’s CC&Rs define the roofs of townhomes as exclusive use common area, owners and tenants have federally protected rights to install satellite dishes on their respective exclusive use roofs. (FCC Declaratory Ruling, 2003.)

General Common Area Roofs
Civil Code Section 4725(b)(2) references a restriction that requires approval before a satellite dish may be installed on the “separate interest” owned by another.  The term “separate interest” does not include association common area. (Civ. Code § 4095(a).) Civil Code Section 4725 therefore allows for an association to restrict or prohibit the installation of satellite dishes on common area roofs where the satellite dish would be visible from streets or other common areas. (Civ. Code § 4725(a); See also “Satellite Dishes (Generally).”)

Federal Preemption: Telecommunications Act and OTARD Rule
Parts of Civil Code Section 4725 have been preempted by the Telecommunications Act of 1996 (“TA”) (47 USC § §151-615b) and Over-the-Air Reception Devices Rule (“OTARD Rule”) (47 CFR §1.4000). The TA and OTARD Rule generally provide an association’s members and their tenants with federally protected rights to install satellite dishes on their separate interests (their lots or units) and exclusive use common areas (i.e., balconies, patios, etc.) notwithstanding the visibility restrictions contained in Section 4725. However, members and tenants do not have a federally protected right to install satellite dishes on common area components that are owned and maintained by the association (i.e., roofs, building exteriors, etc.)

“The [OTARD Rule] applies to antenna users who live in a multiple dwelling unit building, such as a condominium or apartment building, if the antenna user has an exclusive use area in which to install the antenna. ‘Exclusive use’ means an area of the property that only you, and persons you permit, may enter and use to the exclusion of other residents. For example, your condominium or apartment may include a balcony, terrace, deck or patio that only you can use, and the rule applies to these areas. The [OTARD Rule] does not apply to common areas, such as the roof, the hallways, the walkways or the exterior walls of a condominium or apartment building. Restrictions on antennas installed in these common areas are not covered by the [OTARD Rule]. For example, the [OTARD Rule] would not apply to restrictions that prevent drilling through the exterior wall of a condominium or rental unit and thus restrictions may prohibit installation that requires such drilling.” (FCC Information Sheet – OTARD Rule, Published Dec. 2007 (Emphasis added).)

Approval Requirement; Assumption of Maintenance Responsibilities; Indemnity & Reimbursement
Where an association permits, or is required to permit, the installation of a satellite dish on a common area roof or exclusive use roof, Civil Code Section 4725(b) allows for the association to impose “reasonable restrictions” that require the member or tenant to:

  • Obtain the association’s approval for the installation;
  • Assume the maintenance and repair responsibilities for the roofs or other building components that are impacted by the satellite dish’s installation, maintenance or use; and
  • Require the installer of the satellite dish to indemnify or reimburse the association or its members for loss or damage caused by the satellite dish’s installation, maintenance or use.

Related Links

FCC Guide to the OTARD Rule

Preemption of Restrictions on Placement of Direct Broadcast Satellite, Broadband Radio Service, and Television Broadcast Antennas.

Satellite Dishes (Generally)

State and Federal statutes limit the degree to which an association’s governing documents (i.e., its CC&Rs or architectural standards) may restrict or prohibit the installation of satellite dishes. The limitations placed upon an association in this respect are impacted by the type of common interest development—namely, whether the association’s development is comprised of single family homes or condominium units. (See also “Satellite Dishes on Common Area Roofs.”)

Civil Code Section 4725
Civil Code Section 4725 renders void and unenforceable any provision contained in an association’s governing documents that “effectively prohibits or restricts the installation or use of a video or television antenna, including a satellite dish, or that effectively prohibits or restricts the attachment of that antenna to a structure within the development where the antenna is not visible from any street or common area, except as otherwise prohibited or restricted by law…” (Civ. Code § 4725(a).) However, this limitation applies only to provisions which prohibit/restrict the installation of satellite dishes that have a “diameter or diagonal measurement of 36 inches or less.” (Civ. Code § 4725(a).)

Reasonable Restrictions Permitted
The rights afforded to an association’s members under Section 4725 are further subject to “reasonable restrictions” imposed by an association on the installation, maintenance or use of satellite dishes that have a diameter or diagonal measurement of 36 inches or less. (Civ. Code § 4725(b).) Reasonable restrictions include restrictions “that do not significantly increase the cost of the [satellite dish]…or significantly decrease its efficiency or performance,” and include restrictions that (a) require a member to obtain association approval for the satellite dish installation, (b) require the member to assume the maintenance obligations for any roofs or building components impacted by the satellite dish’s installation, maintenance or use, and (c) require the installers of a satellite dish to indemnify or reimburse the association or its members for loss or damage caused by the satellite dish’s installation, maintenance or use. (Civ. Code § 4725(b).)

Association Approval Requirement
Where an association requires a homeowner to obtain association approval for the installation or use of a satellite dish, that approval must be processed in the same manner as an application for approval of architectural modifications to the member’s property. (Civ. Code § 4725(c); See also “Architectural Application & Approval Process.”)

Federal Preemption: Telecommunications Act and OTARD Rule
Parts of Section 4725 have been preempted by the Telecommunications Act of 1996 (“TA”) (47 USC § §151-615b) and Over-the-Air Reception Devices Rule (“OTARD Rule”) (47 CFR §1.4000). The TA and OTARD Rule generally provide an association’s members and their tenants with federally protected rights to install satellite dishes on their separate interests (their lots or units) and exclusive use common areas (i.e., balconies, patios, etc.) notwithstanding the visibility restrictions contained in Section 4725. However, members and tenants do not have a federally protected right to install satellite dishes on common area components that are owned and maintained by the association (i.e., roofs, building exteriors, etc.). (See “Satellite Dishes on Common Area Roofs.”)

Enforcement of Section 4725
In an action to enforce compliance with Civil Code Section 4725, the prevailing party is entitled to an award of its attorney’s fees. (Civ. Code § 4725(d).)

Related Links

FCC Guide to the OTARD Rule

Preemption of Restrictions on Placement of Direct Broadcast Satellite, Broadband Radio Service, and Television Broadcast Antennas.

Renter Rights

Membership in the Association
Association membership status is coupled with having an ownership interest in a lot or condominium within the association’s development. (Civ. Code § 4160.) The majority of the rights granted to members under the association’s governing documents or the Davis-Stirling Act therefore do not extend to renters, nor may they be validly transferred to renters. The following table illustrates what membership rights may be transferred from an owner to a renter; information in the table is discussed further below.

Right Transferrable to Renter
Attend Board Meetings No
Attend Membership Meetings No
Dispute Resolution (IDR & ADR) No
Have Pets Possible
Inspect Association Records Possible
Serve on the Board Possible
Standing to Sue Association No
Use of Common Area Amenities Yes (typically mandatory)
Vote No

Rights Transferred to Renters

  • Use of Common Area Amenities – When owners lease their units to renters, they transfer their rights of use and enjoyment of the association’s common area amenities to their renters. Most sets of association governing documents contain provisions that require an owner to surrender those rights for so long as his property is being leased out to a renter. California courts have upheld the validity of such restrictions and the authority that associations have to enforce them. (Liebler v. Point Loma Tennis Club (1995) 40 Cal.App. 4th 1600, 1610.)
  • Inspect Association Records (*Possible) – Various association records must be made available for inspection by members within certain time periods. (Civ. Code § 5205; See also “Member Record Inspection Rights.”) Renters do not have the right to request records; however, if a member issues a valid request to inspect and copy specified association records, the member may also “designate another person” (i.e., a renter) “to inspect and copy the specified records on the member’s behalf.” (Civ. Code § 5205(b).)
  • Serve on the Board (*Possible) – Most sets of association governing documents allow only members of the association to serve on its board of directors. (See “Director Qualifications.”) Where such restrictions are absent from the governing documents, there may be circumstances where a renter may be eligible to serve as a director and ultimately be elected to the board.
  • Have Pets (*Possible) – Civil Code Section 4715 grants “owners” within an association the right to keep and maintain at least one (1) pet within their respective units. (See “Pet Restrictions.”) However, Section 4715 makes no mention of whether that right also extends to renters. The degree to which an association may legally prohibit renters’ pets is ambiguous.

Rights Which Are Not Transferred

  • Attend Board Meetings – Unless otherwise provided in an association’s governing documents, only members have the legal right to attend board meetings, as well as the right to address the board during open forum. (Civ. Code § 4925.)
  • Attend Membership Meetings – Membership meetings are limited to the association’s members. (Civ. Code § 5000.) A member may not have a tenant attend a membership meeting as the member’s proxy, as a proxy may only be given to another member. (Civ. Code § 5130(a)(1).)
  • Voting – A tenant may not be given the right to vote on behalf of a member, as proxies may only be given to other members of the association. (Civ. Code § 5130(a)(1).)
  • Dispute Resolution – The dispute resolution procedures (i.e., IDR and ADR) which may be employed by an association’s members do not extend to their renters. (Civ. Code §§ 5900(a), 5910, 5930(a).)
  • Standing to Sue Association – As provided for in Civil Code Section 5975, an association’s governing documents may be enforced by either the association or an “owner of a separate interest.” In Martin v. Bridgeport Community Association, the California Court of Appeal explicitly addressed this issue and held that renters do not have standing to sue an association for breach of its CC&Rs and violations of the Davis-Stirling Act, despite the fact that the owner had executed a power of attorney to his renters to handle matters relating to the owner’s property:

“…the right of enforcement is inextricable from ownership of real property…and thus, cannot be assigned absent a transfer of ownership of the parcel to which it applies…

…Not being owners and, therefore, having no authority to enforce the CC&Rs…[the renters] do not have standing to maintain the cause of action.” (Martin v. Bridgeport Community Assn. (2009) 173 Cal.App.4th 1024, 1036 and 1038.) 

Limitations on Rental Prohibitions

The California Legislature had enacted several pieces of legislation limiting the degree to which an HOA’s governing documents may be utilized to prohibit and restrict rental activities within the HOA’s development. That legislation served to (a) render unenforceable broad prohibitions on rentals within an HOA, (b) limit the the types of rental restrictions an HOA may adopt and enforce, and (c) insulate owners from having to comply with newly adopted rental restrictions that were not in effect at the time the owner acquired title to their property within the HOA’s development.

*Note – In reading the information below, it is important to note the Civil Code’s definition of an owner’s “separate interest.”  In a condominium project, the owner’s separate interest would be the owner’s condominium unit; in a planned development, the owner’s  separate interest would be the owner’s lot. For more information, see “Separate Interests” and Civil Code section 4185. 

Broad Rental Prohibitions are Not Enforceable
Civil Code section 4741 provides that an owner within an HOA is not subject to a provision of the HOA’s governing documents, or an amendment to the governing documents, that prohibits, has the effect of prohibiting, or unreasonably restricts the rental or leasing of any of the separate interests, accessory dwelling units (ADUs), or junior accessory dwelling units (JADUs) in the HOA to a renter, lessee or tenant. (Civ. Code § 4741(a).)

Prohibitions on the Rental of Individual Rooms for Owner-Occupied Units
In situations where an owner seeks to rental our a portion of their separate interest (e.g., an individual room in the home) to a renter, lessee or tenant, an HOA’s governing documents cannot prohibit such a rental provided that (a) the owner occupies the separate interest while a portion of it is being rented out, and (b) the portion being rented out is for a term of more than thirty (30) days. (Civ. Code § 4739.)

Restrictions Capping the Number of Rentals to 25% or More of the Separate Interests are Permitted
Civil Code section 4741 does allow for an HOA to place a ceiling (or ‘cap’) on the amount of rentals that may exist in the HOA at any one time to 25% (or more) of the separate interests:

“A common interest development shall not adopt or enforce a provision in a governing document or amendment to a governing document that restricts the rental or lease of separate interests within a common interest to less than 25 percent of the separate interests. Nothing in this subdivision prohibits a common interest development from adopting or enforcing a provision authorizing a higher percentage of separate interests to be rented or leased.” (Civ. Code § 4741(b).)

To illustrate: if an HOA has 100 separate interests, the HOA may adopt a restriction providing that once 25 separate interests are being rented out, no other separate interest may be rented until one of the 25 rented separate interests ceases to be rented out.  The same HOA would also be able to, if so desired, adopt a more relaxed restriction authorizing a higher percentage of rentals (e.g., a cap of 30 separate interests). However, the same HOA would not be able to adopt a more restrictive provision (e.g., a restriction imposing a cap of 15 separate interests, as such a restriction would be in violation of 25% threshold established under Civil Code section 4741(b) referenced above).

Prohibitions on Short-term Rentals are Permitted
Civil Code section 4741 also allows for an HOA to adopt and enforce a provision that “prohibits transient or short-term rental of a separate property interest for a period of 30 days or less.” (Civ. Code § 4741(c).)

*Note – The Legislature’s introduction of the unique term “separate property interest” in Civil Code section 4741(c) is considered by many HOA attorneys as a term which consolidates “separate interest” together with ADUs and JADUs; however, the proper interpretation of that language remains unsettled. 

ADUs and JADUs are not “Separate Interests”
For the purposes of applying Civil Code section 4741’s provisions, ADUs and JADUs “shall not be construed as a separate interest.” (Civ. Code § 4741(d).)

This language is significant in situations where an HOA has imposed an enforceable rental cap. To illustrate: if the 100 separate interest HOA referenced above with a 25% rental cap already has 25 separate interests being rented out, that cap would have no impact on an owner’s desire to now rent out the owner’s ADU or JADU, as the owner’s ADU or JADU cannot be considered a “separate interest” to which the rental cap applies. 

Separate Interest not “Rented” if Owner Occupies the Separate Interest, ADU, or JADU
For the purposes of applying Civil Code section 4741’s provisions, “a separate interest shall not be counted as occupied by a renter if the separate interest, or the accessory dwelling unit or junior accessory dwelling unit of the separate interest, is occupied by the owner.” (Civ. Code § 4741(e).)

This language is significant in situations where an HOA has a imposed an enforceable rental cap and/or an enforceable prohibition on short-term rentals. To illustrate: if the 100 separate interest HOA referenced above with a 25% rental cap already has 25 separate interests being rented out, the rental cap would be unenforceable against an owner who wants to now rent out the owner’s separate interest while residing within the owner’s ADU or JADU on the separate interest. To illustrate further: if the HOA also has a prohibition on short-term rentals, that owner would be able to rent out his separate interest for short-term rental purposes so long as the owner resides within the ADU or JADU on the separate interest. 

Newly Adopted Rental Prohibitions are Only Enforceable Against Future Owners
Civil Code section 4740 further limits the enforcement of HOA rental prohibitions beyond what is provided in Civil Code section 4741 discussed above.  Section 4740 provides that:

 “An owner of a separate interest in a common interest development shall not be subject to a provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of any of the separate interests in that common interest development to a renter, lessee, or tenant unless that governing document, or amendment thereto, was effective prior to the date the owner acquired title to his or her separate interest…” (Civ. Code § 4740(a).)

Thus, where an otherwise valid rental prohibition is incorporated into a HOA’s governing documents, that prohibition is only enforceable against an owner that bought into the HOA’s development after the rental prohibition became effective.  This was affirmed by the California Court of Appeals in Brown v. Montage at Mission Hills, Inc. (2021) 68 Cal.App.5th 124, where the court held that an existing owner within a HOA who was renting out her separate interest for short-term purposes was exempt from a new amendment to the HOA’s governing documents that prohibited short-term rentals.

Verification Requirement
Where an owner seeks to utilize the protections under Civil Code section 4740 and rent out their property, the owner is required to first provide the HOA with (1) verification of the date the owner acquired title to his property, and (2) the name and contact information of the prospective tenant or the tenant’s representative. (Civ. Code § 4740(c).)

Requirement to Remove Unlawful Rental Prohibitions from Governing Documents no later than July 1, 2022
Civil Code section 4741 further imposes a mandate on HOAs to amend their governing documents as necessary to remove any unlawful rental prohibitions no later than July 1, 2022.

No Membership Approval Required for Amendment
In situations where amending a governing document in this regard would typically require membership approval (e.g., where the CC&Rs need to be amended to remove unlawful rental prohibitions), Civil Code section 4741 allows for the board to amend and restate the CC&Rs without membership approval by utilizing a process identical to that which is required for amending operating rules. (Civ. Code § 4741(f).)

Penalties for Noncompliance
An HOA that willfully violates Section 4741 “shall be liable to the applicant or other party for actual damages, and shall pay a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1,000).” (Civ. Code § 4741(g).)

Requirement to Notify Association of  Occupancy and Rental Status
As part of the requirement under Civil Code section 4041 for each member to, on an annual basis, provide the association with information regarding the member’s preferred and alternative contact methods, each member must also inform the association whether the member’s property is owner-occupied or whether the member’s property is being rented out. (See “Annual Notice & Solicitation of Member Contact Information.”)

Disclosure of Rental Prohibition to Prospective Purchaser
If a provision of an association’s governing documents “prohibits the rental or leasing of any of the separate interests in the common interest development,” the owner of a property has a duty to disclose to its prospective purchaser the existence of the rental prohibition and provide a statement describing the prohibition. (Civ. Code § 4525(a)(9).)