Section 367 of the Code of Civil Procedure requires that "[e]very action must be prosecuted in the name of the real party in interest. The person to be benefited by, or entitled to receive the benefits of, the suit is said to have "standing" to initiate legal action and to defend, settle, or intervene in litigation, arbitration, mediation, or administrative proceedings.
Associations. Where title to common areas are held by the association (usually planned developments), the association has standing in all legal matters as an owner. In associations where common areas are owned in common by the membership (condominiums), the association can maintain actions in its representative capacity on behalf of its members. “Associations have standing to initiate legal action and to defend, settle, or intervene in litigation, arbitration, mediation, or administrative proceedings on behalf of the membership.” (Civ. Code §5980; also see: Duffey v. Superior Court; Del Mar Beach v. Imperial Contracting.) Authorizing language giving associations standing to act for their members is also found in an association's CC&Rs and bylaws.
Through their boards of directors, associations can initiate and defend legal actions in matters that include the following:
- Enforcement of the governing documents;
- Damage to the common areas; including third parties, such as Realtors (Glen Oaks v. Re Max)
- Damage to the separate interests which the association is obligated to maintain or repair;
- Damage to a separate interest that arises out of, or is integrally related to, damage to the common area or a separate interest that the association is obligated to maintain or repair;
- Construction defects (Civil Code §945, which applies to construction defect actions also provides, “. . . Associations shall have standing to enforce the provisions, standards, rights, and obligations set forth in this title.” see also: Windham v. Superior Court; Del Mar Beach Club v. Imperial Contracting.)
- General interest issues:
- "the HOA has standing to sue as a representative of the individual homeowners. Code of Civil Procedure section 382 provides in part that "when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all." (Market Lofts v. 9th Street Market Lofts);
- "an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." (Quail Lakes v Kozina.)
- "[e]ven in the absence of injury to itself, an association may have standing solely as the representative of its members." (cite.) "[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." (Whispering Palms v. Newport Pacific.)
- Petitions to amend CC&Rs ( Civ. Code §4275; Corp. Code §7515; Greenback Townhomes v. Rizan.)
In Association's Name. A civil action can only be maintained by a legal entity. (Oliver v. Swiss Club Tell (1963) 222 Cal.App.2d 528, 537.) Accordingly, any lawsuit brought by a board of directors must be brought in the name of the association, not the board of directors. An association is a legal entity that acts through its board of directors. However, a board is not a legal entity that is capable of bringing suit in the board's name. (Irish Beach Board v. Farrell (2009); an unpublished decision). Boards should be aware that even though corporations can bring and defend against lawsuits, suspended corporations cannot.
Members. Association members can also bring legal action against other members who violate the CC&Rs. (Civ. Code §5975(a).) If necessary, they can file an action against the association for its failure to carry out its duties under the CC&Rs. (Posey v. Leavitt, “Under well-accepted principles of condominium law, a homeowner can sue the association for damages and an injunction to compel the association to enforce the provisions of the declaration.”). Depending on the matter, homeowners can bring enforcement actions in small claims court or superior court.
Non-Members. Tenants and prior owners do not have standing to litigate issues involving the governing documents. An owner's right to enforce the governing documents and the Davis-Stirling Act is “inextricable” from their ownership of their property and cannot be assigned to non-owners without also transferring ownership of the property. (Martin v. Bridgeport Community Association; Farber v. Bay View Terrace.)
Additional Case Law. See "Legal Standing" in our section on Case Law for additional cases.
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