DRE Limitation. Virtually all CC&Rs have a one-year limitation on contracts entered into by the association. This limitation is required by the Department of Real Estate (Cal. Admin. Code, Title. 10, ยง2792.21) to prevent the developer from obligating the association to long-term contracts that may favor the developer but harm the association.
Transfer from Developer. Once the developer has turned over control of the association to the membership, the CC&Rs may be amended to eliminate the restriction altogether or to change it to 3 or 5 year contract limitations depending on the type of vendor. This allows the association to negotiate more favorable contracts for elevator maintenance, cable TV service, etc.
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