Common Interest Communities Flashcards
A planned residential development in which all parcels are subject to land use restrictions and which is governed by a homeowners association
Common Interest Communities
Creates the homeowners association that will govern the CIC
Sets forth the powers of the homeowners association
Provides that the homeowners association will be governed by a board of directors
Imposes covenants, conditions, and restrictions (“CC&Rs”) on all parcels; the CC&Rs may be enforced as real covenants or equitable servitudes
Requires all homeowners to pay assessments (sometimes called HOA fees)
Provides that each homeowner has an undivided, fractional interest in the common areas and membership in the homeowners association
Declaration
A _______ is enforceable unless it is unreasonable
restriction
It is arbitrary, meaning it has no rational relationship to the protection, preservation, occupation, or purpose of the property
It violates a fundamental public policy
It imposes a burden on the use of the property that substantially outweighs the benefits of the restriction to the residents as a whole
A restriction is unreasonable if:
__________ are presumed to be valid – the burden is on the homeowner challenging the restriction
Restrictions
Promotes stability and predictability
Discourages lawsuits and alleviates the burden on the courts
Protects the homeowners from having to fund the defense of lawsuits seeking to strike down the restrictions
Protects the expectations of all homeowners
Promotes freedom of contract
Empowers boards of homeowners associations
Support for CC&R’s
Activity is confined to the interior of the unit
Enforcement addresses a nonexistent harm (the cats did not pose a disturbance or health risk to other residents)
Enforcement deprives the homeowner of her personal liberty to have a pet and deprives the homeowner of the value, companionship and benefits of having a pet
Enforcement is arbitrary since other animals are allowed that are more of a nuisance and/or more dangerous
Burden of the restriction substantially outweighs the benefit
The American dream: your home is your castle!
Drawbacks for CC&R’s
____________ of a real covenant or equitable servitude requires proof that existing violations are so great as to lead the average person to reasonably conclude that the restriction has been abandoned
Abandonment
The number, nature, and severity of existing violations
Prior acts of enforcement
Whether a substantial degree of the benefit of the servitude can still be realized
Factor that show abandonment include:
A covenant has been abandoned when the average person, upon inspection of a subdivision and knowing of the restrictions, observes sufficient violations so that he will logically infer that the property owners do not comply with, and do not enforce, the applicable covenant
The violations must be readily visible
If the average person would not realize that violations have occurred, there is no abandonment
The original purpose of the restrictive covenant has been materially altered or destroyed by changed conditions, and
A substantial benefit can no longer can be achieved by the enforcement of the restriction
In general, changes must have occurred within the subdivision or CIC
Changes in the surrounding properties that are outside of the subdivision will not usually be sufficient to constitute “changed conditions”
party arguing that a restrictive covenant should be terminated due to changed conditions must prove:
Abandonment Release/termination Merger Estoppel Condemnation Expiration by its terms Changed circumstances Equitable principles such as laches and unclean hands
Real Covenants & Equitable Servitudes may be terminated by
Did the board of directors act within the scope of authority granted to it under the community’s declaration?
Was the decision made reasonably or was it made in an arbitrary and capricious manner?
When reviewing a decision made by the board of directors of the homeowners association, courts usually follow a 2-step inquiry:
The validity of a newly enacted rule would be examined under a reasonableness standard
A newly-enacted rule would be upheld so long as it is reasonable
New Rules & Regulations
