What is a Declaration of Covenants, Conditions and Restrictions (referred to as a "Declaration" or "CC&Rs")?
Davis-Stirling Definition. The Davis-Stirling Act has a definition for CC&Rs that is not very helpful. It defines a "Declaration" as a document that contains the information required by Sections 4250 and 4255. (Civ. Code §4135.) Section 4250 states that a declaration must contain a legal description of the common interest development, and a statement that the common interest development is a community apartment project, condominium project, planned development, stock cooperative, and must additionally set forth the name of the association and the restrictions on the use or enjoyment of property. (Civ. Code §4250.) Section 4255 deals with airport noise. (Civ. Code §4255.)
Broader Definition. Unlike bylaws, which address the governance of an association, CC&Rs describe the rights and obligations of the membership as they relate to other members and the association as a whole, and of the association to its members. CC&Rs generally cover: (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 actually raise his/her hand or 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 owner of the property. 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, or rescind, or modify an obligation. In other words, an event must take place before a party to a contract must perform their obligation. There are very few if any real conditions in a set of CC&Rs. Arguably, paying assessments is a condition to keeping one's house or condominium. Failure to pay them can result in the loss of 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 as well as order among neighbors. They also have the effect of conferring rights on owners. For example, restrictions on the height of trees protect views for 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.)
Enforceability. The California Supreme Court reviewed the history of enforceability of CC&Rs as equitable servitudes, concluding that “there 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.)
Use restrictions are an inherent part of any common interest development and are crucial to the stable, planned environment of any shared ownership arrangement. (Nahrstedt v. Lakeside Village (1994) 8 Cal.4th 361, 372.)
[S]ubordination of individual property rights to the collective judgment of the owners association together with restrictions on the use of real property comprise the chief attributes of owning property in a common interest development. ... "[I]nherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he [or she] might otherwise enjoy in separate, privately owned property. (Nahrstedt at 374.)
Who Can Enforce. CC&Rs are created by the developer and recorded against all units/lots in the development. They are restrictions on the use of land and may be enforced in equity, i.e., justice administered according to fairness. (Civ. Code §5975.) Provided the violation falls within the statute of limitations, associations and individual owners each have the right to enforce CC&Rs. Both can go into court for injunctive relief. Because CC&Rs are recorded, they "run with the land" and bind all successive owners of a condominium or lot against with the restrictive covenants were recorded. (Nahrstedt.) Restrictions that do not meet the requirements of covenants running with the land may be enforceable as equitable servitudes provided the person bound by the restrictions had notice of their existence. (Riley v. Bear Creek.) See "Duty to Enforce" for more information.
Deemed a Contract. Although CC&Rs are equitable servitudes and not a contract, i.e., there is no (i) negotiation between the association and a buyer over the restrictions and duties imposed on owners, (ii) no offer and acceptance, (iii) no agreement between the association and a buyer regarding respective rights and duties (iv) no promise to perform, and (v) no valuable consideration exchanged between the association and a buyer, courts have nonetheless characterized CC&Rs as a contract for limited purposes. (Frances T. v. Village Green.)
Enforcement Discretion. Boards have a certain amount of discretion when it comes to enforcement decisions related to CC&R violations.
Recordation. CC&Rs may be amended and restated and are effective upon recordation.
Proper Abbreviation. The proper way to abbreviate "Declaration of Covenants, Conditions and Restrictions" is CC&Rs not CC&R's. See explanation.
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