Category Archives: Renters

Occupancy Restrictions

Overcrowding within residential community associations may result in various problems and nuisance issues that adversely affect the quiet enjoyment of the association’s residents. Associations do have some authority to impose reasonable, non-discriminatory restrictions on the occupancy of condominium units:

“The authority of a condominium association necessarily includes the power to issue reasonable regulations governing an owner’s use of his unit in order to prevent activities which might prove annoying to the general residents…Therefore, a reasonable restriction upon the occupancy of individually owned units of a condominium project is not beyond the scope of authority of the owner’s association.” (Ritchey v. Villa Nueva Condo. Assn. (1978) 81 Cal.App.3d 688, 698-699.)

Discriminatory Age-Based Restrictions
Federal and state statutes prohibit residential restrictions that discriminate on basis of race, religion, natural original, sex, ancestry, familial status, or disability. With the exception of senior communities, occupancy restrictions may not be used to discriminate against families with children, nor may they be used to limit residency to persons over a certain age. (O’Connor v. Village Green Owners Assn. (1983) 33 Cal.3d 790.) However, the Department of Housing and Urban Development (HUD) has stated that:

“…in appropriate circumstances, owners and managers may develop and implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the overall size of the dwelling unit. In this regard, it must be noted that, in connection with a complaint alleging discrimination on the basis of familial status, [HUD] will carefully examine any such nongovernmental restriction to determine whether it unreasonably operates to limit or exclude families with children.” (HUD – Occupancy Standards Statement of Policy.)

Occupancy Formulas
The California Health & Safety Code and the Federal Uniform Housing Code both contain provisions that restrict the number of persons residing within a unit by utilizing formulas based upon the square footage of bedroom sizes. Various cities and counties within California have issued their own occupancy standards/formulas. Additionally, the California Department of Fair Employment and Housing (DFEH) uses what is known as the “two plus one” formula, which permits two (2) people to occupy each bedroom, with one (1) additional person in the living spaces (i.e., five (5) people may reside in a two bedroom unit). The DFEH formula has not gained formal legal status at either the state or federal level.

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).)

Rental Restrictions (Generally)

HOAs with significant populations of renters may encounter problems that do not arise in developments that consist of primarily owner-occupied homes and condominiums. Those problems typically include higher amounts of assessment delinquencies, more rules violations, lower maintenance standards, more insurance claims, etc. HOAs seeking to avoid such problems often amend their governing documents (i.e., amend their CC&Rs) to impose reasonable rental restrictions within their developments. California courts have recognized a HOA’s authority to take such action as well as its general power to regulate rentals:

“Reasonable restrictions on alienation of condominiums are entirely consistent with Civil Code section 711 in which the California law on unlawful restraints on alienation has its origins. The day has long since passed when the rule in California was that all restraints on alienation were unlawful under the statute; it is now the settled law in this jurisdiction that only unreasonable restraints on alienation are invalid. (Laguna Royale Owners Assn. v. Darger (1981) 119 Cal.App.3d 670, 682.)

“The power to regulate pertains to a wide spectrum of activities, such as the volume of playing music, hours of social gatherings, use of patio furniture and barbecues, and rental of units.” (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, FN 6.)

“Here we hold, among other things, that homeowners associations may adopt reasonable rules and impose fees on members relating to short-term rentals of condominium units.” (Watts v. Oak Shores Community Assn. (2015) 235 Cal.App.4th 466, 468.)

Statutory Limitations on Rental Prohibitions within HOAs
The policy of the California Legislature in seeking to address the state’s housing and homelessness crisis has resulted in several changes to the law that significantly limit the degree to which an HOA may restrict the rights of its members to rent out their homes. For information addressing those limitations and the only rental prohibitions that may be lawfully enforced, see “Limitations on Rental Prohibitions.”