Evolution of CIDS
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EVOLUTION OF CIDs

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')

 

Other early native American condominium-like structures.

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.

1928: FIRST COMMUNITY ASSOCIATION. 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.

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.

1970s to Present: PLANNED DEVELOPMENTS. A variation on condominiums began to emerge in the 1970s which permitted individual ownership of homes and lots. The common areas are owned in common or are deeded to the corporation.

1985 Davis-Stirling Act. Because of the rapidly growing industry of common interest developments, California passed the 'Davis-Stirling Act' under the authorship of Assemblyman Larry Stirling.

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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