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QUASI-GOVERNMENTAL

Privatizing Public Functions. In California, local municipalities have discovered they can "privatize" public functions by forcing developers to create common interest developments, knowing that associations will provide services normally provided by the city or county. This allows local governments to collect taxes from association members without providing public services, thereby subsidizing services to non-association housing.

Quasi-Governmental Entity. Many see homeowner associations as mini-governments regulating many aspects of the daily lives of their members. (Chantiles v. Lake Forest II Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 922.) They are viewed as "a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government." (Cohen v. Kite Hill Community Association (1983) 142 Cal.App.3d 642, 651.)

Homeowner associations "play an important role ... in public-service functions such as maintenance and repair of public areas and utilities, street and common area lighting, sanitation and the regulation and enforcement of zoning ordinances.... In almost every case, the association provides its members with utility services, road maintenance, street and common area lighting, and refuse removal.... All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors ... or other similar body clearly analogous to the governing body of a municipality. This delegation extends not only to the common areas, but also within the confines of the home itself.” (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 475; internal cites and quotation marks omitted).

"Indeed, the homeowners associations function almost as a second municipal government, regulating many aspects of [the homeowners'] daily lives. [U]pon analysis of the association's functions, one clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government. As a mini-government, the association provides to its members, in almost every case, utility services, road maintenance, street and common area lighting, and refuse removal. In many cases, it also provides security services and various forms of communication within the community. There is, moreover, a clear analogy to the municipal police and public safety functions.... In short, homeowners associations, via their enforcement of the CC&Rs, provide many beneficial and desirable services that permit a common interest development to flourish." (Villa Milano Homeowners Ass'n v. Il Davorge (2000) 84 Cal. App.4th 819, 836; internal cites and quotation marks omitted).

Below is a comparison of the functions provided by cities and associations:

COMPARISON CHART
  City               Association
  City Charter   CC&Rs
  City Council
     ·Brown Act
  Board of Directors
   ·Open Meeting Act    
  Mayor   President
  City Manager   Community Manager
  Citizens   Members
  Elections   Elections
  Taxes
     ·tax liens
  Assessments
   ·assessment liens
  Ordinances
     ·hearings
     ·fines
     ·jail
  Rules & Regulations
   ·hearings
   ·fines
   ·suspend privileges
  Police   Security
  Public Works   Maintenance Dept.
Parks & Recreation
     ·parks
     ·pools
     ·etc.
  Recreational Facilities
   ·parks
   ·pools
   ·etc.


Problems With the Analogy: While courts and the legislature sometimes view community associations variously as landlords, private businesss, or mini-governments (depending on the issue), they are most structured as private self-governing organizations. Even though associations are similar to governments, they are not and they lack the immunities enjoyed by governments. Their authority is contractual in nature via Bylaws and recorded CC&Rs. (Pinnacle Museum Tower v. Pinnacle Market Dev'l. (2012) 55 Cal.4th 223, 236-237.) In an unpublished decision, the California Court of Appeals noted that association meetings are not official proceedings:

[H]omeowners association meetings fall outside the scope of official proceedings” for purposes of the anti-SLAPP statute. Talega reasoned that “nongovernmental proceedings must have a strong connection to governmental proceedings to qualify as ‘official.’ ” “[A]lthough courts have recognized the similarities between a homeowners association and a local government, even going so far as to describe a homeowners association as a ‘quasi-governmental entity, paralleling the powers and duties of a municipal government’, a homeowners association is not performing or assisting in the performance of the actual government’s duties” and their decisions “are not reviewable by administrative mandate”—characteristics of other entities found to hold “official proceedings” for purposes of the anti-SLAPP law. We agree with Talega that homeowners association board meetings are not “official proceedings” within the meaning of the anti-SLAPP law. (cites removed; Cootes v. Wyman.)

Primary Duty of Boards. The primary task of an association, through its board of directors, is to maintain, repair and replace the common areas, which protects the property values of its members. Secondarily, boards adopt operating rules to protect members' quiet enjoyment of the common areas and their separate interests.

Limited Transparency. Because a board's primary duty is to protect the corporation and its assets, complete transparency with the membership is not feasible. There is some information that must be kept confidential, which is why the Davis-Stirling Act provides for executive session meetings that allow boards to review matters in confidence. For that reason, minutes of these meetings are not subject to review by members.

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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