Homeowners’ associations today function in many respects as small municipal governments regulating many aspects of the daily lives of their members. Chantiles v. Lake Forest II Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 922. Associations are in effect "a quasi-government entity paralleling in almost every case the powers, duties, and responsib8ilities of a municipal government." (Cohen v. Kite Hill Community Association (1983) 142 Cal.App.3d 642, 651.)

Services Provided. They play an “important role ... in public-service functions such as maintenance and repair of public areas and utilities, street and common area lighting, sanitation and the regulation and enforcement of zoning ordinances....” (Cohen at 650.) In almost every case, the association provides its members with “utility services, road maintenance, street and common area lighting, and refuse removal.... All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors ... or other similar body clearly analogous to the governing body of a municipality.” (Cohen at 651.) “This delegation extends not only to the common areas, but also within ‘the confines of the home itself.’” (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 475.)

Deferral to Boards. With respect to judicial review of controversies between a homeowners’ association and one of its members over regulatory matters, there are well-defined standards to be applied. Generally speaking, courts will uphold a decision made by the governing board of a homeowners’ association so long as it represents a good faith effort to further the purposes of the common interest development, is consistent with the development's governing documents, and complies with public policy. (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 374.)

Stated somewhat differently, so long as a homeowners’ association acts upon reasonable investigation, in good faith, and in a manner the association reasonably believes to be in the best interests of the association and its members, its decision will be upheld. (Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, 265; Nahrstedt, 8 Cal.4th at 374; Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 979 (“[C]ourts should defer to the discretionary decisions of duly constituted community associations . . . where those decisions are made within the scope of their authority under relevant statutes, covenants, and restrictions, upon reasonable investigation, in good faith, and in a manner in the best interests of the Association and its members.”); Hannula v. Hacienda Homes (1949) 34 Cal.2d 447 (A refusal to approve plans must be a reasonable determination made in good faith").)

Burden of Proof. The burden of proof is on an objecting homeowner to show that an association’s decision is arbitrary, imposes burdens on the use of lands it affects that substantially outweigh the restriction's benefits to the development's residents, or violates a fundamental public policy." (Nahrstedt, 8 Cal.4th at 361, 386; Cohen, 142 Cal.App.3d at 642, 651-654.) In this regard, "courts do not conduct a case-by-case analysis of the restrictions to determine the effect on an individual homeowner; [instead they] consider the reasonableness of the restrictions by looking at the goals and concerns of the entire development." (Dolan-King, 81 Cal.App.4th at 965, 975.)

Rules & Regulations. Although rules and regulations enacted by the board of a homeowners’ association are not recorded, they are entitled to similar judicial deference. “[W]here a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise.” (Lamden, 21 Cal.4th at 249, 265.)

An association has a corollary, fiduciary relationship with its members. (Cohen, 142 Cal.App.3d at 642, 650–651.) Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1558.) Its actions must be undertaken in good faith, with regard for the best interests of the community association and its members, seeking professional advice where necessary. (Berryman at 1558.)