Frequently Asked Questions

Defined Terms

Davis-Sterling Act Civil Code §1351.

As used in this title, the following terms have the following meanings:

(a) "Association" means a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development.

(b) "Common area" means the entire common interest development except the separate interests therein. The estate in the common area may be a fee, a life estate, an estate for years, or any combination of the foregoing. However, the common area for a planned development specified in paragraph (2) of subdivision (k) may consist of mutual or reciprocal easement rights appurtenant to the separate interests.

   (1) A community apartment project.
   (2) A condominium project.
   (3) A planned development.
   (4) A stock cooperative.

(d) "Community apartment project" means a development in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located thereon.

(e) "Condominium plan" means a plan consisting of

(1) a description or survey map of a condominium project, which shall refer to or show monumentation on the ground,

(2) a three-dimensional description of a condominium project, one or more dimensions of which may extend for an indefinite distance upwards or downwards, in sufficient detail to identify the common areas and each separate interest, and

(3) a certificate consenting to the recordation of the condominium plan pursuant to this title signed and acknowledged by the following:

(A) The record owner of fee title to that property included in the condominium project.

(B) In the case of a condominium project which will terminate upon the termination of an estate for years, the certificate shall be signed and acknowledged by all lessors and lessees of the estate for years.

(C) In the case of a condominium project subject to a life estate, the certificate shall be signed and acknowledged by all life tenants and remainder interests.

(D) The certificate shall also be signed and acknowledged by either the trustee or the beneficiary of each recorded deed of trust, and the mortgagee of each recorded mortgage encumbering the property.

Owners of mineral rights, easements, rights-of-way, and other nonpossessory interests do not need to sign the condominium plan. Further, in the event a conversion to condominiums of a community apartment project or stock cooperative has been approved by the required number of owners, trustees, beneficiaries, and mortgagees pursuant to Section 66452.10 of the Government Code, the certificate need only be signed by those owners, trustees, beneficiaries, and mortgagees approving the conversion. A condominium plan may be amended or revoked by a subsequently acknowledged recorded instrument executed by all the persons whose signatures would be required pursuant to this subdivision.

(f) A "condominium project" means a development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. The description of the unit may refer to

(1) boundaries described in the recorded final map, parcel map, or condominium plan,

(2) physical boundaries, either in existence, or to be constructed, such as walls, floors, and ceilings of a structure or any portion thereof,

(3) an entire structure containing one or more units, or

(4) any combination thereof.

The portion or portions of the real property held in undivided interest may be all of the real property, except for the separate interests, or may include a particular three-dimensional portion thereof, the boundaries of which are described on a recorded final map, parcel map, or condominium plan. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. An individual condominium within a condominium project may include, in addition, a separate interest in other portions of the real property.

(g) "Declarant" means the person or group of persons designated in the declaration as declarant, or if no declarant is designated, the person or group of persons who sign the original declaration or who succeed to special rights, preferences, or privileges designated in the declaration as belonging to the signator of the original declaration.

(h) "Declaration" means the document, however denominated, which contains the information required by Section 1353.

(i) "Exclusive use common area" means a portion of the common areas designated by the declaration for the exclusive use of one or more, but fewer than all, of the owners of the separate interests and which is or will be appurtenant to the separate interest or interests.

(1) Unless the declaration otherwise provides, any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios, exterior doors, doorframes, and hardware incident thereto, screens and windows or other fixtures designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common areas allocated exclusively to that separate interest.

(2) Notwithstanding the provisions of the declaration, internal and external telephone wiring designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common areas allocated exclusively to that separate interest.

(j) "Governing documents" means the declaration and any other documents, such as bylaws, operating rules of the association, articles of incorporation, or articles of association, which govern the operation of the common interest development or association.

(k) "Planned development" means a development (other than a community apartment project, a condominium project, or a stock cooperative) having either or both of the following features:

(1) The common area is owned either by an association or in common by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.

(2) A power exists in the association to enforce an obligation of an owner of a separate interest with respect to the beneficial use and enjoyment of the common area by means of an assessment which may become a lien upon the separate interests in accordance with Section 1367 or 1367.1.

(l) "Separate interest" has the following meanings:

(1) In a community apartment project, "separate interest" means the exclusive right to occupy an apartment, as specified in subdivision (d).

(2) In a condominium project, "separate interest" means an individual unit, as specified in subdivision (f).

(3) In a planned development, "separate interest" means a separately owned lot, parcel, area, or space.

(4) In a stock cooperative, "separate interest" means the exclusive right to occupy a portion of the real property, as specified in subdivision (m).

Unless the declaration or condominium plan, if any exists, otherwise provides, if walls, floors, or ceilings are designated as boundaries of a separate interest, the interior surfaces of the perimeter walls, floors, ceilings, windows, doors, and outlets located within the separate interest are part of the separate interest and any other portions of the walls, floors, or ceilings are part of the common areas. The estate in a separate interest may be a fee, a life estate, an estate for years, or any combination of the foregoing.

(m) "Stock cooperative" means a development in which a corporation is formed or availed of, primarily for the purpose of holding title to, either in fee simple or for a term of years, improved real property, and all or substantially all of the shareholders of the corporation receive a right of exclusive occupancy in a portion of the real property, title to which is held by the corporation. The owners' interest in the corporation, whether evidenced by a share of stock, a certificate of membership, or otherwise, shall be deemed to be an interest in a common interest development and a real estate development for purposes of subdivision (f) of Section 25100 of the Corporations Code. A "stock cooperative" includes a limited equity housing cooperative which is a stock cooperative that meets the criteria of Section 33007.5 of the Health and Safety Code.

Disclosure Checklist

Following is a summary of disclosure requirements. Please refer to the Davis-Sterling statutes for more complete information.

1 - 60 Days Before the Start of the Fiscal Year
Assessments & Foreclosure Policy . Distribute a "Notice Assessments and Foreclosure" using the language set out in the Civil Code.	Civil Code 1365.1
30 - 90 Days Before the Start of the Fiscal Year
Budget & Reserves. The budget must contain: • Estimated revenue and expenses on an accrual basis. • A summary of the reserves, a description of the procedures used to calculate reserves, any deficiencies in the reserves, and a reserve funding plan • A statement whether the board expects to levy any *specialassessments*.	Civil Code 1365 1365.2.5 1365.5
Lien & Collection Policy . Disclose the association's policies & practices in enforcing lien rights or other legal remedies for default in payment of assessments.	Civil Code 1365(e)
Secondary Address. Associations must notify owners of their right to submit a secondary address for purposes of collection notices.	Civil Code 1367.1(k)
Right to Annual Report. Associations must notify members of their right to receive a financial report.	Corp. Code 8321
Insurance. Summaries the association’s property, general liability, and earthquake and flood, and fidelity insurance policies, which state the insurer’s name, type of insurance, policy limits, and deductibles. You can distribute the policy declarations pages instead, if they contain the required information. A statement must be included in the disclosure in at least 10-point boldface type. The association must also notify members if policies are canceled and not immediately replaced.	Civil Code 1365(e)
30 - 60 Days Before the Start of the Fiscal Year
Regular assessments. If the regular assessments are to be increased, notice must be mailed to the owners 30 to 60 days before the increase takes effect.	Civil Code 1366(d)
1 - 120 Days After the Start of the Fiscal Year
Annual Financial Statement. Associations with a gross annual income of over $75,000 must conduct an annual review by a licensed California accountant and distribute the review.	Civil Code 1365(b)
Annually
Right to Minutes. Annually notify members of their right to receive draft or final minutes of open board meetings within 30 days of the meeting, and how and where those minutes may be obtained.	Civil Code 1363.05(d)(e)
Dispute Resolution . Distribute a description of the association's internal dispute resolution ("IDR") process for internally resolving disputes between the association and its members. Also distribute a summary of the code sections that encourages the use alternative dispute resolution ("ADR") methods such as arbitration or mediation before lawsuits are filed to enforce the governing documents.	Civil Code 1369.590 1369.850
Architectural Procedures. Disclose those things that require architectural approval and the procedures used for reviewing architectural applications.	Civil Code 1378
Security Issues. Annually include a statement that members are responsible for their own safety and security.Owners should take normal precautions such as locking doors, avoiding dangerous situations, installing alarms, etc.	recommended
Hazardous Materials. Notify members of known hazardous materials such as asbestos.	H&S Code 25915.2
Disclose As Needed
Board Meetings. Give 4-day notice of board meetings.For emergency meetings give as much notice as possible.Give notice by 1st class mail, personal delivery, or posting in public place.	Civil Code 1363.05(g)
Escrow Disclosures. Within 10 days of written request by seller, the association must provide, for a reasonable charge, copies of the governing documents, the most recent annual financial statement, current and unpaid assessments & fees, notices of unresolved violations for that property, and any approved assessments which have not yet been implemented.	Civil Code 1368(b) 1134
Fine Policy. Associations must give notice of any changes in their fine policy.	Civil Code 1363(g)
Unlawful Restrictions. Provide cover page for CC&Rs containing language prohibiting discriminatory restrictions. See statute for specific language and size of type-font.	Gov. Code 12956.1
Workplace Hazards. Notify employees of workplace hazards.	Labor Code 6401.7
Reserve Transfers for Litigation. Notify members in next available mailing of any transfers from reserves to pay for litigation.	Civil Code 1365.5(d)
Assessment Increases. Notify members, not less than 30 days nor more than 60 days prior to the increased assessment, of any special assessment or any increase in the regular assessments.	Civil Code 1366(c)
Construction Defects. Disclose (i) any agreements with the developer; (ii) any defects needing correction or replacement, (iii) an estimate of when defects will be corrected or replaced, and (iv) which defects will not be corrected or replaced. “Defects” includes damage resulting from the defects.	Civil Code 1375.1

Special Meetings of The Membership

Following is a summary of key points regarding special meetings of the membership. Check the Davis-Sterling statutes for details. Visit http://davis-stirling.com.

Who May Call a Meeting . As provided for in Corp. Code §7510(e) special meetings may be called for any lawful purpose by the following:

Directors . By the president or by vote of the board.
Petition . By petition of the membership signed by at least 5% of the members. The right to call a meeting by 5% of the membership cannot be changed or eliminated by contrary provisions in the bylaws.

Setting the Date. The date of the special meeting is set by the board and may not be less than 35 nor more than 90 days from receipt of request. Corp. Code §7511(c) The board has 20 days from receipt of the petition to set the date and give notice of the meeting. If the board does not do so, the persons calling the meeting may set the date and give notice. Corp. Code §7511(c) If the board fails to give notice, the petitioners may give notice which is not less than 10 nor more than 90 days before the date of the meeting, provided the notice is by first-class, registered, or certified mail. Corp. Code §7511(a)

Agenda. Notice of meetings shall specify those matters the board intends to present for action by the membership. Civil Code §1363.03(e) Business at the meeting is limited to noticed items only; no other business may be transacted. Corp. Code §7511(a)

Waiver of Notice. Attendance of a person at a meeting shall constitute a waiver of notice of and presence at the meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by this part to be included in the notice but not so included, if the objection is expressly made at the meeting. Corp. Code §7511(e)

Parliamentary Procedure. Membership meetings shall be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt. Civil Code §1363(d)

Neighbor Disputes

There was a time when boards were advised to stay out of neighbor to neighbor disputes. Unfortunately, the legislature and the courts have increasingly pushed associations into the role of resolving disputes internally. This seems to extend even to claims of harassment, threats, and physical altercations. There are four lines of reasoning for the board's duty to intervene.

Nuisance. Owners have a general right to peacefully enjoy their property. Because associations have the power to impose fines and suspend privileges, boards have a duty to intervene under the nuisance provisions of their CC&Rs to stop owners from disturbing the peace.

Health and Safety. In addition to nuisance restrictions, most documents contain general statements that the association's purpose is to provide for the health, safety and welfare of the membership. If an owner poses a threat to other members, the board may have a duty under these provisions to protect the membership from such threats.

Landlord Tenant Relationship. Under landlord-tenant law, landlords must protect members against foreseeable harm and provide for quiet enjoyment by curbing a tenant's disruptive conduct. California's Supreme Court has already compared associations to landlords and owners to tenants. That analogy will likely carry over to a board's duty to protect members from an abusive, harassing or threatening owner.

Fair Housing Act . Duties may also be imposed by federal law. In a Washington D.C. case, a female owner was harassed by her neighbor who allegedly shouted racial epithets and made sexual comments to her. The woman asked her condominium association to take action to stop the harassment. The association wrote letters to the neighbor but took no further action. The woman sued the association alleging violation of the Fair Housing Act because it failed to take action against her neighbor. When the federal district judge ruled that the association could be held liable for its inaction, the association settled the case by paying the owner $550,000 and buying her condo. Reeves & The Fair Housing Council of Greater Washington, Inc. v. Carrollsburg Condominium Owners Assoc. (D.D.C. 96-02495)

RECOMMENDATION . Boards should hold hearings with feuding neighbors and make it clear that any disruptive behavior such as loud stereos, banging on the walls, shouting matches in the common areas, etc. will result in fines and suspension of privileges (as provided for in the governing documents). If the board determines that an owner is a threat to other residents, the board may have a duty to take further action, such as seeking a restraining order. When faced with these kinds of situations, boards should seek legal counsel.

Holiday Decorations

Boards are allowed to decorate the common areas for religious holidays. The First Amendment "separation of church and state" does not apply to homeowners associations.

Associations should allow members to decorate their homes and balconies for the holidays. However, boards may adopt reasonable rules limiting:

when owners can start decorating,
the degree of decorating that can be done, and
how long decorations can remain up after the holiday has passed

Right to Display American Flag

Davis-Sterling Act Civil Code §1353.5 of the Davis-Sterling Act.

(a) Except as required for the protection of the public health or safety, no declaration or other governing document shall limit or prohibit, or be construed to limit or prohibit, the display of the flag of the United States by an owner on or in the owner's separate interest or within the owner's exclusive use common area, as defined in Section 1351.

(b) For purposes of this section, "display of the flag of the United States" means a flag of the United States made of fabric, cloth, or paper displayed from a staff or pole or in a window, and does not mean a depiction or emblem of the flag of the United States made of lights, paint, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component.

Right to Display Signs, Posters and Banners

Davis-Sterling Act Civil Code §1353.6.

(a) The governing documents, including the operating rules, may not prohibit posting or displaying of noncommercial signs, posters, flags, or banners on or in an owner's separate interest, except as required for the protection of public health or safety or if the posting or display would violate a local, state, or federal law.

(b) For purposes of this section, a noncommercial sign, poster, flag, or banner may be made of paper, cardboard, cloth, plastic, or fabric, and may be posted or displayed from the yard, window, door, balcony, or outside wall of the separate interest, but may not be made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or include the painting of architectural surfaces.

(c) An association may prohibit noncommercial signs and posters that are more than 9 square feet in size and noncommercial flags or banners that are more than 15 square feet in size.

Low Water-Using Plants

Davis-Sterling Act Civil Code §1353.8.

The architectural guidelines of a common interest development shall not prohibit or include conditions that have the effect of prohibiting the use of low water-using plants as a group.

Biennial Statements are required by the state of California.