BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 853
SENATOR TOM TORLAKSON, CHAIRMAN AUTHOR: Kehoe
VERSION:
3/29/2005
Analysis by: Mark Stivers FISCAL: No
SUBJECT:
Architectural review in common interest developments
DESCRIPTION:
This bill would clarify that any decision of an architectural
review entity within a common interest development shall be
consistent with all state laws, including building codes or
other applicable laws governing land use or public safety.
ANALYSIS:
A common-interest development (CID) is a form of real estate
where each homeowner has an exclusive interest in a unit or lot
and a shared or undivided interest in common area property.
Condominiums, planned unit developments, stock cooperatives, and
community apartments all fall under the umbrella of common
interest developments. The Davis-Stirling Common Interest
Development Act provides the legal framework under which
homeowner associations operate in common interest developments.
In addition to the requirements of the Act, each CID is governed
by a homeowner association according to the recorded
declarations, bylaws, and operating rules of the association.
In general, homeowner associations have wide discretion to
regulate the appearance of individual interests and the conduct
of its members. Under current law, the declarations of an
association are enforceable as equitable servitudes "unless
unreasonable." In Nahrstedt v. Lakeside Village Condominium
Assoc., Inc ., 8 Cal. 4th 361 (1994), the California Supreme
Court opined that the "unless unreasonable" standard means that
"restrictions should be enforced unless they are wholly
arbitrary, violate a public policy, or impose a burden on the
use of affected land that far outweighs any benefit."
When reviewing architectural review matters, a homeowners
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association must provide a fair, reasonable and expeditious
procedure and make decisions in good faith. In addition,
decisions must be consistent with "any governing provision of
law," including the accessibility requirements of fair housing
laws.
This bill would clarify that the architectural review decisions
of a CID must be consistent with all provisions of law,
notwithstanding contrary provisions of the CID's own governing
documents. The bill would further clarify that such decisions
must be consistent with laws governing building codes, land use,
or public safety. The bill also would update references to
obsolete code sections.
COMMENTS:
1.Purpose of the bill . The California Law Revision Commission
has sponsored SB 853 in order to avoid disputes and
uncertainty that can result when an association's
architectural restrictions conflict with land use or public
safety law. For example, fire safety law may require that
vegetation be cleared within a certain distance of structures
in fire-prone areas. This requirement might conflict with an
association landscaping restriction. In such a case, the
association may be unsure whether its restriction is preempted
and may feel duty-bound to enforce its restriction until a
court rules on the enforceability of the restriction. This
uncertainty can lead to unnecessary litigation and expense and
may result in perpetuation of an unlawful and unsafe
condition. According to the commission, an association
architectural restriction should be preempted by governing
land use and public safety law as a matter of policy.
2.Overriding governing documents . The Nahrstedt decision
clearly establishes that CID restrictions are unenforceable if
they violate public policy. Because public policies are
expressed through laws and regulations, CID restrictions, or
in this case decisions of an architectural review commission,
may not violate federal, state, or local laws or regulations.
CID board members are volunteers who generally don't have much
experience with the statutes and related court decisions.
Clarity in the statutes helps avoid illegal decisions by a
board and potential litigation. In listing specific types of
SB 853 (KEHOE) Page 3
laws that may not be violated and clarifying that laws and
regulations trump an association's governing documents, this
bill does not substantively change current law but does
provided more explicit direction to laypersons charged with
implementing the statutes.
3.Updating cross-references . Former Code of Civil Procedure
Section 383 provided that a CID homeowners' association can
sue on behalf of its members in certain specified actions. It
also provided special rules relating to comparative fault in
such a suit. In 2004, Section 383 was repealed and the
substance moved to the Davis-Stirling Act. This bill updates
statutory cross-references to reflect the relocation.
4.Author's amendments . The author intends to offer a technical
amendment in committee to replace the phrase "shall be
consistent" with "may not violate" as it relates to
architectural review decisions complying with land use or
public safety laws.
5.Referral back to Rules . The Senate Rules Committee referred
this bill to the Transportation and Housing Committee and then
back to Rules for further review. If the committee is
inclined to approve the bill, the proper motion would be do
pass and re-refer to Rules.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
March 30, 2005.)
SUPPORT: California Law Revision Commission (sponsor)
OPPOSED: None received.