Declaration of Covenants, Conditions and Restrictions
A "Declaration of Covenants, Conditions and Restrictions" is referred to as "CC&Rs" or as a "Declaration." It is a recorded document that contains a legal description of the development and a statement that it is a community apartment project, condominium project, planned development, or stock cooperative. The declaration must additionally set forth the name of the association and the restrictions on the use or enjoyment of property. (Civ. Code § 4250.) Unlike bylaws, which address the governance of an association, CC&Rs describe property rights and obligations of the membership, such as (i) restrictions on the use of property, (ii) member and association maintenance duties, (iii) enforcement powers, (iv) lender protection provisions, (v) assessments obligations and lien/collection rights, (vi) duty to insure, and (vii) dispute resolution and attorneys' fees provisions.
"Covenants" are promises. In effect, a buyer in a common interest development promises to abide by the governing documents and pay his/her assessments. The buyer does not sign an agreement making a promise to abide by the documents; the promise is imposed on the buyer as an equitable servitude that runs with the property and is fully enforceable against the property owner. A positive covenant is a promise to do something, and a restrictive covenant is a promise not to do something.
"Conditions" in a contract or agreement can suspend, rescind, or modify an obligation. In other words, an event must take place before a party to a contract must perform its obligation. There are very few, if any, real conditions in a set of CC&Rs. Arguably, paying assessments is a condition of keeping one's house or condominium. Failure to pay them can result in losing ownership of the house or condo.
"Restrictions" are limitations imposed on owners on the use of their property. For example, restrictive covenants often limit the number and kinds of animals an owner may keep, the alterations they can make to their property, the number of vehicles they can park, etc. The purpose of the restrictions is to maintain property values and order among neighbors. They also confer rights on owners. For example, restrictions on the height of trees protect the views of owners. (Ekstrom v. Marquesa.) Other rights conferred include rights of ingress and egress and easements.
Categories of Restrictions. There are two categories of restrictions--those found in the CC&Rs (equitable servitudes) and those later adopted by an association's board of directors (rules & regulations). Restrictions found in the CC&Rs are "clothed with a very strong presumption of validity which arises from the fact that each individual unit owner purchases his unit knowing of and accepting the restrictions to be imposed," while rules and regulations are subjected to a reasonableness analysis. (Villa de Las Palmas v. Terifaj.)
Use Rights. Another aspect of CC&Rs is the creation of "use rights" in the negative. In other words, restrictions such as setback requirements, tree height limitations, open areas, etc., protect rights to views and privacy that benefit owners. Although not binding, a lower court decision agreed that CC&Rs conferred rights via the restrictions. (Pasternack vs. Fidelity National Title Insurance Company, Nov. 21, 2017, Case No: 30-2014-00742249-CU-IC-CJC.)
CC&Rs Are Equitable Servitudes
Under California law, the provisions in CC&Rs are equitable servitudes. (Promenade at Playa Vista HOA v. Western Pacific Housing.) "The covenants and restrictions in the declaration shall be enforceable equitable servitudes." (Civ. Code § 5975.) An "equitable servitude" creates an obligation or encumbrance on land that is enforceable in equity. Once recorded, it runs with the land and continues to burden/benefit successor owners of the land. It is enforceable by injunctive relief, i.e., it can be enforced without resorting to a breach of contract cause of action. (Franklin v. Marie Antoinette.)
Once the first buyer "accepts" the covenants, conditions, and restrictions recorded against a property by purchasing a unit, a common interest development is created (Civ. Code § 4200), and the CC&Rs become enforceable equitable servitudes, unless unreasonable and inure to the benefit of and bind all owners of separate interests in the development. (Civ. Code § 5975(a); see Bus. & Prof. Code, § 11018.5.(c).) (Pinnacle Museum v. Pinnacle Market.) The restrictions in a recorded declaration are enforceable as equitable servitued and bind all owners in a common interest development. (Civ. Code § 5975; Nahrstedt v. Lakeside Village.)
Courts sometimes treat CC&Rs as contracts, even though they are not. For example: Frances T. v. Village Green Owners Assn. treated CC&Rs as contract between condominium owners association and unit owner; Villa Milano treated CC&Rs as a contract between developer and a community association; Franklin v. Marie Antoinette Condominium Owners Assn. accepted parties' assumption that CC&Rs formed a contract between condominium owners and owners association; Pinnacle Museum Tower Assn. v. Pinnacle Market Development: although Nahrstedt spoke specifically in terms of land use restrictions, its analysis logically extends to all covenants in a declaration, which by statute are also enforceable as equitable servitudes unless unreasonable.
Proper Abbreviation. The appropriate way to abbreviate "Declaration of Covenants, Conditions and Restrictions" is CC&Rs, not CC&R's. See explanation.
Enforcement. “[T]here appears no question that, under the Davis-Stirling Act, each owner of a condominium unit either has expressly consented or is deemed by law to have agreed to the terms in a recorded declaration.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Dev'l (2012) 55 Cal.4th 223, 241.) See "Enforcement of CC&Rs."
CC&Rs Presumed Reasonable
An association's CC&Rs shall be enforceable equitable servitudes unless unreasonable. (Civ. Code § 5975.) Use restrictions in a recorded declaration are afforded a "presumption of validity" and enforced unless found unreasonable under a deferential standard. (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 372, 383.) Whether CC&Rs are reasonable is determined not by reference to facts specific to the objecting homeowner but by reference to the common interest development as a whole. Restrictions contained in CC&Rs are presumed reasonable and will be enforced unless the restriction:
- Is arbitrary,
- Imposes burdens on the property that substantially outweigh the restriction's benefits to the development's residents or
- Violates a fundamental public policy. (Nahrstedt v. Lakeside Village)
CC&R provisions are presumptively valid, and the burden of proving otherwise rests on the challenging owner. (Villa De Las Palmas v. Terifaj.) Also, because CC&Rs are recorded, members are deemed to have constructive notice of the restrictions whether or not they received them in escrow or whether or not they read them.
Recordation Gives Constructive Notice
CC&Rs may be amended and restated and are effective upon recordation. A recorded declaration of covenants, conditions, and restrictions (CC&Rs) serves as constructive notice of the restrictions contained in the document. Actual notice consists of express information of a fact. Constructive notice means notice given by the public records. With constructive notice, people are presumed to know the contents of recorded instruments.
Constructive notice is the equivalent of actual knowledge; i.e., knowledge of its contents is conclusively presumed. (Citizens for Covenant Compliance v. Anderson)
By statute, any instrument "affecting the title to ... real property may be recorded" by the "county recorder of the county in which the real property affected thereby is situated." (Gov. Code, § 27280, subd. (a); Civ. Code § 1169.) "Recording consists of copying the instrument in the record book and indexing it under the names of the parties. (See Govt. C. 27257, 27322 et seq.)" (4 Witkin, Summary of Cal. Law, supra, Real Property, § 200, p. 406.) Civil Code section 1213 provides that every "conveyance" of real property recorded as prescribed by law provides "constructive notice" of its contents to subsequent purchasers. The term "conveyance" is broadly defined to include "every instrument in writing ... by which the title to any real property may be affected ...." (Civ. Code, § 1215, italics added.) Constructive notice "is the equivalent of actual knowledge; i.e., knowledge of its contents is conclusively presumed." (4 Witkin, Summary of Cal. Law, supra, § 203, p. 408, italics in original.) CC&Rs, which affect title to real property, have long been recorded under these provisions. (See, e.g., Riley v. Bear Creek Planning Committee (1976) 17 Cal.3d 500, 504 . . .; Scaringe v. J. C. C. Enterprises, Inc., 205 Cal.App.3d at pp. 1540-1541, 1543-1544 . . .” Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 355.)
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with community association issues, subscribe to the Davis-Stirling Newsletter.