Although CC&Rs are presumed reasonable, they sometimes have internal conflicts (provisions say opposite things) or conflicts between documents (CC&Rs say one thing and the bylaws another) or conflicts between an association's documents and the Davis-Stirling Act or the Corporations Code. When that occurs, associations should seek legal counsel. In most instances, the following rules of interpretation will apply.
Statute Overrides. If the statute uses words such as "notwithstanding any provision of the governing documents to the contrary" or any similar language, the statute overrides the association's CC&Rs. For example, Civil Code §5605(b) starts with "Notwithstanding more restrictive limitations placed on the board by the governing documents . . . " and then goes on to set a 20% limit on raising regular dues and a 5% limit on special assessments. This means that if your CC&Rs have a 10% cap on regular dues and a 3% cap on special assessments, they were nullified by statute and the higher limits of 20% and 5% now prevail. Another example is found in Civil Code §4715(a):
No governing documents shall prohibit the owner of a separate interest within a common interest development from keeping at least one pet . . .
Statute Defers. If the statute uses words such as "Unless the declaration otherwise provides . . . " or similar language, the CC&Rs will prevail. For example, Civil Code §4500 states:
Unless the declaration otherwise provides . . . the common area is owned as tenants in common, in equal shares, one for each separate interest.
Frequently, highrise condominiums will assign ownership interest (and the payment of dues) according to the square footage of the unit. If the CC&Rs were silent on the issue, then this statute would assign ownership in equal shares. Another example is found in Civil Code §5500(a):
Unless the governing documents impose more stringent standards, the board shall do all of the following: . . .
Statute is Silent. Frequently, the Davis-Stirling Act is silent on which controls, the statute or the CC&Rs, and you must decide from the general language of the statute which controls. For instance, Civil Code §4800 does not contain any of the language described above, nonetheless, it clearly controls because of its use of the word "shall":
A common interest development shall be managed by an association that may be incorporated or unincorporated. The association may be referred to as an owners' association or a community association.
Hierarchy of Documents. In addition to conflicts between governing documents and various statutes, there may be conflicts within and between an association's governing documents. Such conflicts are often resolved by the relative priority or hierarchy of the documents.
Rules of Interpretation. There are a number of cases that address the interpretation of CC&Rs:
- The interpretation of a written instrument, even though it involves what might properly be called questions of fact is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. (PV Little Italy, LLC v. MetroWork Condominium Assn., (2012) 210 Cal. App. 4th 132, 144.)
- CC&Rs are interpreted according to the usual rules for the interpretation of contracts, with a view toward enforcing the reasonable intent of the parties. (Nahrstedt v. Lakeside Village (1994) 8 Cal.4th 361, 380-381.) The intent of the parties and the object of the deed or restriction should govern, giving the instrument a just and fair interpretation. (Chee v. Amanda Goldt (2006) 143 Cal. App. 4th 1360, 1377.)
- Courts interpret words in their ordinary and popular sense unless a contrary intent is shown. (Harvey v. The Landing HOA (2008) 162 Cal.App.4th 809, 817; Franklin v. Marie Antoinette (1993) 19 Cal.App.4th 824, 829.)
- CC&Rs are enacted for the mutual benefit of all members of an association and are to be interpreted so as to give effect to the main purpose of the CC&Rs and avoid an interpretation which will make the CC&Rs extraordinary, harsh, unjust, inequitable or which would result in absurdity. (Battram v. Emerald Bay (1984) 157 Cal.App.3d 1184, 1189.)
- Courts must consider the CC&Rs as a whole and construe the language in context rather than interpret a provision in isolation. If the contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs. (Starlight Ridge v. Hunter-Bloor (2009) 177 Cal.App.4th 440, 447.)
- Where two inconsistent provisions govern the same matter, the more specific provision controls over the general provision. (Code Civ. Proc. §1859; Starlight Ridge v. Hunter-Bloor.)
Court Interpretation. If there is no extrinsic evidence bearing on the interpretation of the CCRs, it becomes one solely of law (Estate of Dodge (1971) 6 Cal.3d 311, 318) and is therefore properly determined by the court on summary judgment. (Milton v. Hudson Sales Corp. (1957) 152 Cal.App.2d 418, 433.)
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.