Category Archives: Topic Index

Architectural Standards

Architectural standards (aka “architectural guidelines, “design standards,” etc.) set forth an association’s policies and procedures regulating a homeowner’s ability to make architectural improvements and modifications to the homeowner’s separate interest, as well as to common area and exclusive use common area. Architectural standards are operating rules which may impose additional architectural restrictions beyond those contained in an association’s CC&Rs, provided that there is empowering language in the CC&Rs to that effect. (Bear Creek Planning Committee v. Ferwerda (2011) 193 Cal.App.4th 1178.) An architectural standard may not be used to circumvent a contradictory provision contained in the CC&Rs (Ekstrom v. Marquesa at Monarch Beach HOA (2008) 168 Cal.App.4th 1111), but may be used to clarify ambiguous CC&R provisions. (Rancho Santa Fe Assn. v. Dolan-King (2004) 115 Cal.App.4th 28.)

Architectural standards often regulate exterior design elements such as paint colors, exterior finishes, and landscaping materials. Architectural standards often establish the procedure through which a homeowner may obtain the association’s approval for desired architectural improvements and modifications. (See “Architectural Application & Approval Process.”)

An association’s authority to establish and enforce architectural standards is premised upon the impact that aesthetics have on the property values of the association’s members:

“Maintaining a consistent and harmonious neighborhood, one that is architecturally and artistically pleasing, confers a benefit on the homeowners by maintaining the value of their properties.” (Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 976.)

Preserving “the aesthetic quality and property values within the community” is recognized by courts as an “important function” of an association. (Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 648.)

Adoption & Amendment
Architectural standards are a component of an association’s operating rules that are adopted and amended by the board of directors. (Civ. Code § 4355(a)(2),(6).) The board must therefore comply with the procedural requirements under Civil Code Section 4360 when adopting or amending architectural standards (i.e., providing the membership with thirty (30) days notice of a proposed change to the architectural standards). (See “Adopting & Amending Operating Rules.”)

Administered by Architectural Committee
The responsibility for administering an association’s architectural standards (i.e., reviewing a member’s architectural application) is often delegated to an “architectural committee” that is separate from the board. Modern sets of governing documents contain provisions requiring an architectural committee and further regulating its duties and responsibilities. (See “Architectural Committee” and “Architectural Application & Approval Process.”)

Allocation of Assessments

The ways in which assessments are allocated to an association’s members will be dictated by the governing documents that were initially created by the association’s “Declarant.” An association’s declaration (“CC&Rs”) will typically allocate assessments in any of the following methods:

Uniform Assessments. (*Most Common) The association’s members pay the same amount of assessments regardless of the dimensions of their respective “separate interests” (their respective units or lots).

Pro Rata Assessments. Assessments are allocated to each separate interest on a percentage basis, often by the square footage of each separate interest. Allocation methods utilizing such disproportionate payment schedules have been upheld by California Courts as reasonable and not in violation public policy. (Cebular v. Cooper Arms (2006) 142 Cal.App.4th 106, 121.)

Variable or “Blended” Assessments. This allocation method purports to provide a structure where larger separate interests pay more for association services that benefit them to a greater extent than smaller separate interests. Assessments are therefore allocated using a uniform rate for certain budgetary items and a percentage rate for other budgetary items.

Hierarchy of Governing Documents

An association’s governing documents include various sets of documents (i.e., declaration (“CC&Rs”), bylaws, operating rules, etc.) that control the operation of the association and the common interest development (CID) it was formed to manage. Certain governing documents have authority over others.

Civil Code Section 4205 sets forth the hierarchy of authority as:

The Law, except where the statute defers to language in the governing documents (see “Rules of Interpretation”);
Declaration (CC&Rs)
Articles of Incorporation
Bylaws
Operating Rules (Rules & Regulations)

Rules of interpretation may assist in resolving conflicts between provisions contained within the same governing document.

Emergency Assessments

Large assessment increases and special assessments often require membership approval in accordance with Civil Code section 5605. (See also “Limitations on Assessment Increases.”) However, those membership approval requirements do not apply to situations where the assessment increase or special assessment is needed for an “emergency situation,” which includes any of the following:

Court Order – An extraordinary expense required by an order of a court; (Civ. Code § 5610(a).)
Personal Health or Safety Threat – An extraordinary expense necessary to operate, repair or maintain the development or any part of it for which the association is responsible where a threat to personal health or safety on the property is discovered; (Civ. Code § 5610(b).)
Hazardous Condition or Circumstance – An extraordinary expense necessary to operate, repair or maintain the development or any part of it for which the association is responsible where a hazardous condition or circumstance on the property is discovered; (Civ. Code § 5610(b).)
Unforeseen Expense – An extraordinary expense necessary to repair or maintain the development or any part of it for which the association is responsible, where such expense “could not have been reasonably foreseen by the board in preparing and distributing the annual budget report under Section 5300.” (Civ. Code § 5610(c).)

Unforeseen Expense; Board Resolution Requirement
Where a board seeks to impose an emergency assessment for an unforeseen expense pursuant to Civil Code section 5610(c), the board must first “pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process.” (Civ. Code § 5610(c).) The resolution must be distributed to the members with the notice of assessment required by Civil Code section 5615. (Civ. Code § 5610(c).)

Member Right to Dispute Charges

Each member of an association has a duty to pay assessments levied by the association. A member may not refuse to pay assessments because the member vacates possession of his property, does not use the association’s common areas, and/or has a dispute with the association. (Cerro del Alcala Homeowners Assn. v. Burns (1985) 169 Cal.App.3d Supp. 1, Supp. 4-5; Park Place Estates Homeowners Assn. v. Naber (1994) 29 Cal.App.4th 427, 432; See also “Duty to Pay Assessments.”) However, a member does have the right to dispute any assessment, fine, penalty, late charge, or collection cost by paying the disputed amount under protest. (Civ. Code § 5658.)

Notice of Right to Dispute Charges
Associations must provide annual notice to each member of the procedure for disputing any charge. (Civ. Code § 5730(a).) That notice must be contained in the association’s annual policy statement prepared pursuant to Civil Code Section 5310 that is sent to each member by individual delivery.

Pay Disputed Sums Under Protest
A member may dispute any charge by paying the disputed sums under protest and (1) commencing an action against the association in small claims court (provided that the amount is less than $10,000 (see Code of Civ. Proc. § 116.221.)), or (2) pursuing alternative dispute resolution (ADR) as defined under Civil Code Section 5925. (Civ. Code § 5658(a).) A member may also utilize any internal dispute resolution (IDR) mechanisms employed by the association. (See Civ. Code § 5900 et. seq.)

Interest, Collection Costs, and Other Costs Incurred
A member is “not liable for charges, interest and costs of collection, if it is established that [a disputed assessment] was paid properly on time.” (Civ. Code § 5730(a).) If an assessment was paid properly on time, the association must promptly reverse all late charges, fees, interest, attorney’s fees, costs of collection, and lien recording/release fees, as well as pay all costs related to any IDR or ADR utilized in connection with the disputed assessment. (Civ. Code § 5685(c).)

Duty to Pay Assessments

“A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if any, and interest, if any… shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied.” (Civ. Code § 5650(a).) Civil Code Section 5650 makes this debt the personal obligation of the owner at the time the assessment is levied, regardless of whether it may ultimately “become a lien against the [owner’s property] under the circumstances as provided in [Section 5650].” (Cerro del Alcala Homeowners Assn. v. Burns (1985) 169 Cal.App.3d Supp. 1, Supp. 5.)

Payment Duty not Dependent upon Possession of Property
Where a member merely abandons or vacates possession of his property within the association’s development, it does not operate to relieve or reduce the member’s obligation to pay assessments to the association:

“Although respondent ceased to enjoy the possession of his property, he continued to enjoy other aspects of ownership until the very moment of recordation of the trustee’s deed which effected a transfer of the property. As the record owner of the property, respondent continued to benefit from the homeowners association’s ongoing schedule of maintenance and repairs to the common areas. In addition, respondent benefited from the protection of a policy of general liability insurance maintained by the homeowners association. Also, at all times prior to the transfer of title, respondent was entitled to lease, encumber, assign, exchange or sell the property as well as reoccupy the unit at no expense. Thus, it is clear that respondent did not cease to enjoy the benefits of the estate by voluntarily vacating the premises.” (Cerro del Alcala Homeowners Assn. v. Burns (1985) 169 Cal.App.3d Supp. 1, Supp. 4-5.)

No Defense or “Offset” to Payment Duty
Members may not withhold or deduct a portion of their assessment payments because they have a grievance or dispute with the association, or because they do not use the association’s common areas or recreational facilities:

“Because homeowners associations would cease to exist without regular payment of assessment fees, the Legislature has created procedures for associations to quickly and efficiently seek relief against a nonpaying owner. Permitting an owner to broadly assert the homeowners association’s conduct as a defense or ‘setoff’ to such enforcement action would seriously undermine these rules.” (Park Place Estates Homeowners Assn. v. Naber (1994) 29 Cal.App.4th 427, 432.)

“A system that would tolerate a [condominium] owner’s refusal to pay an assessment because the unit owner asserts a grievance … would threaten the financial integrity of the entire condominium operation.” (Id. at FN 5.)

However, a member does have the right to dispute any assessment, penalty, interest charge, late fee, collection cost or monetary penalty (fine) by paying the disputed amount under protest and “pursuing dispute resolution pursuant to Article 3 (commencing with Section 5925) of Chapter 10,” as well as commencing an action in small claims court. (Civ. Code § 5658; See also “Member Right to Dispute Charges.”)

Limitations on Assessment Increases

An association’s duty to levy assessments sufficient to perform its obligations may require the association’s board to increase the level of regular assessments or to levy one or more special assessments. Notwithstanding more restrictive limitations placed on the board’s ability to do so by the governing documents, the board may take the following actions without membership approval (Civ. Code § 5605(b).):

Increase Regular Assessments up to 20% – Impose a regular assessment up to twenty percent (20%) greater than the regular assessment for the association’s preceding fiscal year; and/or
Impose a Special Assessment up to 5% – Impose special assessments up to five percent (5%) (aggregate) of the budgeted gross expenses of the association for that fiscal year.

Exception: Emergency Assessments
These limitations do not serve to limit “assessment increases necessary for emergency situations.” (Civ. Code § 5610; See also “Emergency Assessments.”)

Notice Requirement
An association is required to provide its members with individual notice of any increase in the regular or special assessments not less than thirty (30) days nor more than sixty (60) days prior to the increased assessment becoming due. (Civ. Code § 5615.) When an emergency assessment is levied for an unforeseen extraordinary expense pursuant to Civil Code Section 5610(c), the notice of assessment must also include a copy of the resolution passed by the board explaining the justification for levying the emergency assessment. (Civ. Code § 5610(c); See also “Emergency Assessments.”)

Annual Budget Report Requirements
The board may not increase the level of regular assessments unless it has complied with various requirements under Civil Code Section 5300 pertaining to the association’s annual budget report:

“Annual increases in regular assessments for any fiscal year shall not be imposed unless the board has complied with paragraphs (1), (2), (4), (5), (6), (7), and (8) of subdivision (b) of Section 5300 with respect to that fiscal year, or has obtained the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election.” (Civ. Code § 5605(a).)

Membership Approval Requirements; Quorum Set by Statute
Membership approval may be required in connection with a proposed assessment increase (i.e., where a proposed special assessment is in excess of five percent (5%) of the association’s budgeted gross expenses for that fiscal year). In such cases, Civil Code Section 5605(c) sets the applicable quorum requirement as more than fifty percent (50%) of the members, regardless of anything to the contrary in an association’s governing documents. The proposed assessment increase may be approved by a majority of the members voting at an election where such a quorum has been established. (Civ. Code § 5605; Civ. Code § 4070.) The election must be held by secret ballot. (Civ. Code § 5100.)

Duty to Levy Assessments

An association has the affirmative obligation to “levy regular and special assessments sufficient to perform its obligations under the governing documents and [the Davis-Stirling Act].” (Civ. Code § 5600.)

Limitations on Assessment Increases
An association’s ability to increase the amount of regular assessments or to levy special assessments is subject to certain limitations under Civil Code Section 5605(b). (See “Limitations on Assessment Increases.”) Those limitations do not extend to “assessment increases necessary for emergency situations.” (Civ. Code § 5610; See also “Emergency Assessments.”)

Reimbursement & Compliance Assessments
An association may be required by its governing documents to levy a “reimbursement” or “compliance” assessment against a member for damage that member caused to association common area. (See “Reimbursement & Compliance Assessments.”)

Rules of Interpretation

Rules of interpretation are important to address issues arising from vague language within an association’s governing documents, or from language within the governing documents that conflicts with the Davis-Stirling Act (“Act”) or the California Corporations Code.

Statutory Language Defers
If any statute uses language to the effect of “unless otherwise provided in the declaration or bylaws…” (i.e., Civ. Code § 4365(e).), the statute is meant to defer to the language in those governing documents of an association.

Statutory Language Controls
If any statute uses language to the effect of “notwithstanding any provision of the governing documents to the contrary…” (i.e., Civ. Code § 4230(a).) or “no governing documents shall prohibit….” (i.e., Civ. Code § 4705(a).), the language within the statute is controlling and overrides any contradictory language in an association’s governing documents.

Statutory Language is Silent
Provisions of the Act may be silent on whether they are intended to control or to defer to the language in an association’s governing documents. Those provisions may nevertheless control where they use the term “shall,” as that term is a word of command and “must be given a compulsory meaning.” (People v. O’Rourke (1932) 124 Cal.App. 752, 759.) For example, Civil Code Section 4910(a) states that “the board shall not take action on any item of business outside of a board meeting.” This language is controlling and would override any contradictory language in an association’s governing documents.

Conflicts Between Governing Documents
There may be conflicting language between an association’s governing documents (i.e., conflicts between the language in the declaration and the language in the bylaws). Those conflicts may be resolved through the application of the hierarchy of governing documents. (See “Hierarchy of Governing Documents” and Civ. Code § 4205.)

Interpretation of Declaration (“CC&Rs”)
California courts have established the following principles with respect to interpreting CC&Rs:

“The same rules that apply to interpretation of contracts apply to the interpretation of [CC&Rs].” (Chee v. Amanda Golt (2006) 143 Cal.App.4th 1360, 1377).

CC&Rs which are “enacted for the mutual benefit of [the] homeowners, are to be interpreted so as to give effect to the main purpose of the contract… and where a contract is susceptible of two interpretations, the courts shall give it such a construction as will make it lawful, operative, definite, reasonable and capable of being carried into effect… [and] avoid an interpretation which will make [the CC&Rs] extraordinary, harsh, unjust, inequitable or which would result in absurdity.” (Battram v. Emerald Bay (1984) 157 Cal.App.3d 1184, 1189.)

“Where two provisions appear to cover the same matter, and are inconsistent, the more specific provision controls over the general provision.” (Starlight Ridge South Homeowners Assn. v. Hunter-Bloor (2009) 177 Cal.App.4th 440, 447; Code Civ. Proc. § 1859.)

“We consider the [CC&Rs] as a whole and construe the language in context, rather than interpret a provision in isolation.” (Starlight Ridge South Homeowners Assn. v. Hunter-Bloor (2009) 177 Cal.App.4th 440, 447.)

Tract Map

The Tract Map (or “Subdivision Map”) is filed by the “Declarant” (typically the CID’s developer) prior to the construction of a Planned Unit Development (“PUD”) (typically, single family home projects). The Tract Map illustrates the dimensions, boundaries and locations of the separate interests (the “lots,” “parcels” or “spaces”) and the common areas.

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