Background. Colony Hill is a planned development near San Diego in which defendant Masood Ghamaty bought a four-bedroom, three-bath house. Ghamaty moved into the house and rented the remaining rooms to six persons at various times for periods of between two months and two years.
Board Hearing. Owners voiced concerns to the board about parking issues, renters and a loud party at Ghamaty's home. They complained that Ghamaty ran a commercial enterprise prohibited by the CC&Rs. The board met with Ghamaty and demanded that he immediately return the property to a private single-family dwelling status. Ghamaty denied that he was violating the CC&Rs because he considered the renters his family. The association filed suit.
"Family" Defined. At trial Ghamaty relied on the San Diego Municipal Code's definition of "family" as:
unrelated persons who jointly occupy and have equal access to all areas of a dwelling unit and who function together as an integrated economic unit.
The court found that "family" could not reasonably be interpreted to include Ghamaty and his renters. Ghamaty provided no evidence he had any prior relationship with five of the renters, or that any of the renters had any prior relationship with each other. He produced no evidence he shared meals with or had any type of relationship with the renters.
Privacy Argument. Ghamaty argued that the permanent injunction issued by the trial court violated his right of privacy under the California Constitution, i.e., "the State may not utilize its power to interfere with a person's choice of cohabitants." The court noted that the Constitution restricts the State, not private developers. Moreover, a prior Supreme Court decision made it clear that CC&Rs have the power to limit activities in the confines of the home itself.
Decision. The court ruled that Ghamaty was engaged in commercial activity prohibited by the CC&Rs and the injunction was rationally related to the association's right to maintain its family character by prohibiting uses other than single-family dwelling purposes. (See Colony Hill v. Ghamaty.)
Occupancy Restrictions. Also see "Occupancy Restrictions."
Recommendation: The January 1, 2021 addition of Civil Code §4741 to the Davis-Stirling Act may have impacted the ruling in this case by contemplating owner occupied rentals in subsection (e). Boards of directors should consult legal counsel when drafting rental and leasing provisions.
ASSISTANCE: For related issues, see rental restrictions. To amend your CC&Rs, contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.