Common interest developments (CID) are also referred to as common interest communities (CIC) and common interest realty associations (CIRA). A CID is not an association. It is a type of development with common areas. An association, whether incorporated or unincorporated, is the entity that manages a CID. A CID consists of housing units, whereas association have members (homeowners) who elect a board of directors to manage the CID and its residents.
Legal Structure. The court in Mount Olympus POA v. Shpirt (1997) described the basic elements of a common interest development as follows:
For a development to fall within the governance of the [Davis-Stirling] Act, the statutory requirements are clear: (1) there must exist a common area owned either by the association or "by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area" (Civ. Code, §§1351, subd. (k)(1), 1374); (2) there must have been recorded "[a] declaration," "[a] condominium plan, if any exists," and "[a] final map or parcel map" (id., §1352); and (3) there must have been conveyed "a separate interest coupled with an interest in the common area or membership in the association"
Four Types of CIDs. As defined in Civil Code §4100, a Davis-Stirling CID may be any of the following:
Variety of Forms. CIDs come in many forms: retirement communities, recreational communities, highrises, equestrian communities, lake centered developments, golfing communities, artists lofts, etc. A CID can be a 2-unit development or a 20,000-unit development.
Time-Share Developments. A time-share development may or may not be a CID--it depends on how it was structured. In general, a time-share is a form of ownership in which each owner has an interval use, i.e., a right to use a unit for a specified number of weeks during a year. A time-share interest may be in a form of fee simple ownership or a lease granting the right to use a unit for a predetermined lease term.
Commercial & Industrial. Commercial and industrial developments can take any of the four residential forms described above. Instead of homeowners, they consist of business owners who use their commercial condos (coops, puds, etc.) for business purposes.
Mixed Use. If the commercial properties are put in the same development as residential units, it becomes a mixed-use development.
Management. Because it has common area and use restrictions, a Davis-Stirling CID must have an association manage it.
Use Restrictions. California's Supreme Court described the importance of CC&Rs as follows:
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. (Id. at 374.)
Retroactive Application of Act. The Davis-Stirling Act applies to all residential common interest developments in California, including those in existence prior to the Act.
[The Davis-Stirling] Act governs common interest developments that predate its enactment. (Nahrstedt v. Lakeside Village (1994) 8 Cal.4th 361, fn. 8.)
Although Villa De Las Palmas was created prior to the enactment of the Davis-Stirling Act, the Act applies to common interest developments in existence prior to its enactment. ( Villa De Las Palmas v. Terifaj (2004) 33 Cal.4th 73, 95, fn.2.)
The Davis-Stirling Act by its own terms applies to all common interest developments, even those that were created before the Act was adopted. (Bear Creek v. Edwards (2005) 130 Cal.App.4th 1470, 1480.)
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