Adams Stirling PLC


America's first common interest developments?
Cliff dwellings built between 600 and 1300 A.D. by the Anasazi Indians (from Navajo word meaning "the ancient ones")

2-Minute video

Early 1900s: TRUST APARTMENTS. Some of the earliest forms of community living were created in the form of a trust. The trust property was the building and land, the trustee was a bank or financial institution that handled collections and bill-paying for a fee, and the occupants of the building were the trust beneficiaries. Instead of buying their apartment, they would buy into the trust and receive in exchange a contract giving them the right to occupy the apartment for as long as they remained trust beneficiaries.

1900 to 1945: COOPERATIVE APARTMENTS (CO-OPS). As some experimented with trusts, other developers used the corporate model, i.e., a corporation owned the entire property and issued shares of stock to buyers. Stockholders leased their units. Financing was difficult because lenders could not hold the property as security for the loan. Some lenders would hold the stock certificates as security, but frequently the purchasers had to pay cash.

1917 OAKLAND, CALIFORNIA: The first common interest development (CID) west of the Mississippi is founded in Oakland, California. In June of 1917, Mr. Wickham Havens, then President of the Lakeshore Highlands Company, filed the first of several subdivision maps for a residential development to be built within a laurel lined canyon and hillside area, formally known as Indian Gulch. The Lakeshore Homes Association was incorporated on October 4, 1917.  "The whole intent and purpose in creating and structuring the Lakeshore Homes Association was to place in the hands of the residents and property owners themselves, the complete supervision and control of the various questions affecting the general welfare of the neighborhood."

1928: NEW JERSEY. Radburn, a garden city in New Jersey, is developed. It is a combination of separate homes, condominiums and townhouses. Its CC&Rs provide for assessments and architectural and landscaping controls.

1936: LOS ANGELES CALIFORNIA. On May 14, 1936, the Palos Verdes Corporation created one of the first phased planned developments in California. The Rolling Hills Community Association, a gated community with private roads and bridle trails, began with an initial development of homes on 5-acre parcels zoned for horses. An additional 56 tracts of homes were annexed into the association through 1969 when the development was completed.

1945 to 1965: COMMUNITY APARTMENTS (Own-Your-Owns). After World War II common ownership of property changed to a form known as Community Apartments, also known as "Own-Your-Own Units." Instead of a corporation owning the entire project, buyers owned the entire project as tenants in common (both units and common areas). Financing was still difficult because lenders could not secure their loans with an individual unit.

1961 to Present: CONDOMINIUMS. Because of financing problems, common ownership changed in the 1960s to condominiums where buyers actually owned the airspace of a particular unit which permitted lenders to secure loans with real property which could be foreclosed in the event of a default. Owners hold title to the air space of their unit with an undivided percentage interest in the common areas as tenants in common with other owners. When Congress passed the National Housing Act of 1961 making federal mortgage insurance available to condominiums, the construction of condominiums surged.

CIDs grew in popularity with developers because they could increase density by building more homes on a parcel of land. In addition, they could include amenities to attract buyers, such as clubhouses, pools, and gyms. Initially, associations were unincorporated and governed by an elected board of governors. Eventually, all new associations were set up as nonprofit mutual benefit corporations with elected boards of directors responsible for maintaining the common areas, collecting assessments, and enforcing the governing documents.

In September 1963, California adopted a condominium bill that gave the the Commissioner of Corporations jurisdiction over condominiums. (Cal. Stat. 1963 ch. 850, §§ 1-5 at 2090.) In 1965 jurisdiction over condominiums was vested in the Division of Real Estate. (Cal. Stat. 1965, ch. 988, §§1-9 at 2610.) Because of the rapidly growing CID industry, California passed the "Davis-Stirling Act" (Civ. Code §§ 1350-1378) in 1985 under the authorship of Assemblyman Larry Stirling. The number of changes and additions to the Act from year to year were so numerous that California's Law Revision Commission rewrote and renumbered the Act (Civ. Code §§ 4000-6150), which took effect January 1, 2014. (See History of the Davis-Stirling Act.)

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

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