ASSOCIATION DEFINED

The Purpose of an Association 

Association Defined

An "association" is defined as a "nonprofit corporation or unincorporated association created for the purpose of managing a common interest development." (Civ. Code § 4080.) It is a private organization managing a residential development. HOAs are generally associated with developments consisting of single family homes (SFH) on individual lots. The homes can either be detached, stand alone structures or they can be townhomes. Although the term is associated with single family homes, it is sometimes used generically to refer to all forms of residential associations.

How CIDs Are Created. "A common interest development (CID) is created with the recording of the declaration, and other required documents, and there is a conveyance of a separate interest coupled with an interest in the common area or membership in the association. Each owner in a condominium project is a member of the association." (Treo @ Kettner v. Sup. Ct.)

Primary Responsibility of an Association

The primary task of an association, through its board of directors, is to maintain, repair and replace the common areas, which protects the property values of its members. Even though homeowners associations are often viewed as quasi-governmental in nature, they are not pure democracies where members can vote on all issues. Instead, powers are delegated to elected representatives (the board of directors) with some powers are reserved to the membership. This is the model used throughout much of the world (see blue areas on adjacent map).

Managing the Development. Under the Davis-Stirling Act, a common interest development must be managed by an association. (Civ. Code § 4800.) Associations are variously referred to as:

• Common Interest Realty Associations (CIRA)
• Community Associations (CA)
• Homeowners Associations (HOA)
• Owners Associations (OA)
• Property Owners Associations (POA)
• Residential Community Associations (RCA)
• Condominium Association (CA)

Relation to Members. "The relationship between individual homeowners and the managing association of a common interest development is complex (Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, 266), and their respective rights depend upon the nature of the particular dispute.

• Landlords. In Duffey v. Superior Court (1992) 3 Cal.App.4th 425, 428-429, the court observed that associations were sometimes treated as landlords (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 499-501 [association could be held liable for rape and robbery of individual owner who was not allowed to install additional lighting at time of crime wave]).
   
• Mini-governments. Courts sometimes treat associations as "mini-governments" (Laguna Publishing Co. v. Golden Rain Foundation (1982) 131 Cal.App.3d 816, 844 [gated community could not discriminate among give-away newspapers]), sometimes as businesses (O'Connor v. Village Green Owners Assn. (1983) 33 Cal.3d 790, 796 [condominium project with age restrictions . . . was 'business' within the meaning of Unruh Civil Rights Act]).
   
• Corporations. Courts also view associations as corporations (Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 865-867 [board of directors' good faith refusal to take action against construction of house in arguable contravention of setback restrictions was protected by corporate business judgment rule])." (O'Toole v. Kingsbury Court.)

Associations are Quasi-Governmental

Privatizing Public Functions. In California, local municipalities have discovered they can privatize public functions by forcing developers to create common interest developments, knowing that associations will offer services normally provided by the city or county. This allows local governments to collect taxes from association members without providing public services that normally would have been covered by those taxes. That means community associations are subsidizing services governments provide to non-association housing.

Mini-Governments. Even though the primary purpose of an association is to manage and maintain the common areas, many see homeowner associations as mini-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.) They are viewed as "a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government." (Cohen v. Kite Hill Community Association (1983) 142 Cal.App.3d 642, 651.)

Homeowner associations "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.... 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. 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; internal cites and quotation marks omitted).

"Indeed, the homeowners associations function almost as a second municipal government, regulating many aspects of [the homeowners'] daily lives. [U]pon analysis of the association's functions, one clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government. As a mini-government, the association provides to its members, in almost every case, utility services, road maintenance, street and common area lighting, and refuse removal. In many cases, it also provides security services and various forms of communication within the community. There is, moreover, a clear analogy to the municipal police and public safety functions.... In short, homeowners associations, via their enforcement of the CC&Rs, provide many beneficial and desirable services that permit a common interest development to flourish." (Villa Milano Homeowners Ass'n v. Il Davorge (2000) 84 Cal. App.4th 819, 836; internal cites and quotation marks omitted).

Below is a comparison of the functions provided by cities and associations:

Associations Lack Governmental Immunities

A significant problem with treating associations as mini-governments is that governmental immunities are not extended to associations. As public entities, municipalities in California are not liable for a tortious injury caused by an act or omission of a public entity or public employee or any other person, except as otherwise provided by statute. (Gov. Code, § 815(a).) It means government officials enjoy immunity from liability in connection with the performance of their governmental acts. As such, statutory immunity can bar a litigant’s action against officials. No such blanket protections are extended to homeowner association boards. Associations are private organizations that derive their authority via bylaws and recorded CC&Rs. (Pinnacle Museum Tower v. Pinnacle Market Dev'l. (2012) 55 Cal.4th 223, 236-237.) In an unpublished decision, the California Court of Appeals noted that association meetings are not official proceedings:

[H]omeowners association meetings fall outside the scope of official proceedings for purposes of the anti-SLAPP statute. Talega reasoned that “nongovernmental proceedings must have a strong connection to governmental proceedings to qualify as ‘official.’ [A]lthough courts have recognized the similarities between a homeowners association and a local government, even going so far as to describe a homeowners association as a quasi-governmental entity, paralleling the powers and duties of a municipal government, a homeowners association is not performing or assisting in the performance of the actual government’s duties and their decisions are not reviewable by administrative mandate—characteristics of other entities found to hold official proceedings for purposes of the anti-SLAPP law. We agree with Talega that homeowners association board meetings are not “official proceedings” within the meaning of the anti-SLAPP law. (Cootes v. Wyman Property Management (2019); internal cites removed.)

At best, volunteer board members are protected against personal liability by the Business Judgment Rule but directors can be named individually as defendants and must suffer through litigation with an uncertain conclusion.

Board of Directors. Associations are governed through elected boards of directors who have general duties and authority to govern. (Civ. Code § 4080.) See Board Authority and Duties.

Membership Rights & REsponsibilities

See Membership Rights and Responsibilities. 

Dissolving an Association. See Dissolving an Association.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.