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 [see "Rules of Contract Interpretation" below], 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.)
- Rules of statutory interpretation govern how to apply a statute incorporating another statute that changes over time. [cite]. This is analogous to the Latrobe Hills CC&R's, which incorporated a parcel map that changed over time. Christian v. Flora (2008) 164 Cal.App.4th 539, 551.
Court Interpretation. If there is no extrinsic evidence bearing on the interpretation of the CC&Rs, 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.) We do not defer to the Board’s interpretation of the CC&Rs. The interpretation of CC&Rs is a legal question to be decided by the courts, not the Board. “CC&R’s are interpreted according to the usual rules for the interpretation of contracts generally, with a view toward enforcing the reasonable intent of the parties. [Citations.]” (Harvey, supra, 162 Cal.App.4th at p. 817, 76 Cal.Rptr.3d 41.) “ ‘ “[N]ormally the meaning of contract language ... is a legal question.” [Citation.] “Where, as here, no conflicting parol evidence is introduced concerning the interpretation of the document, ‘construction of the instrument is a question of law, and the appellate court will independently construe the writing.’ " (Eith v. Ketelhut (2018) 31 Cal.App.5th 1.)
Rules of Contract Interpretation. Following are some relevant rules of contract interpretation that may be relevant when interpreting CC&Rs:
- All contracts, whether public or private, are to be interpreted by the same rules, except as otherwise provided by this Code. (Civ. Code §1635)
- A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful. (Civ. Code §1636)
- For the purpose of ascertaining the intention of the parties to a contract, if otherwise doubtful, the rules given in this Chapter are to be applied. (Civ. Code §1637)
- The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity. (Civ. Code §1638)
- When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this Title. (Civ. Code §1639)
- The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other. (Civ. Code §1641)
- A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties. (Civ. Code §1643)
- The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed. (Civ. Code §1644)
- Technical words are to be interpreted as usually understood by persons in the profession or business to which they relate, unless clearly used in a different sense. (Civ. Code §1645)
- A contract is to be interpreted according to the law and usage of the place where it is to be performed; or, if it does not indicate a place of performance, according to the law and usage of the place where it is made. (Civ. Code §1646)
- A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates. (Civ. Code §1647)
- However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract. (Civ. Code §1648)
- If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promissor believed, at the time of making it, that the promisee understood it. (Civ. Code §1649)
- Particular clauses of a contract are subordinate to its general intent. (Civ. Code §1650)
- Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract. (Civ. Code §1652)
- Words in a contract which are wholly inconsistent with its nature, or with the main intention of the parties, are to be rejected. (Civ. Code §1653)
- In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. (Civ. Code §1654)
- Stipulations which are necessary to make a contract reasonable, or conformable to usage, are implied, in respect to matters concerning which the contract manifests no contrary intention. (Civ. Code §1655)
- All things that in law or usage are considered as incidental to a contract, or as necessary to carry it into effect, are implied therefrom, unless some of them are expressly mentioned therein, when all other things of the same class are deemed to be excluded. (Civ. Code §1656)
If no time is specified for the performance of an act required to be performed, a reasonable time is allowed. If the act is in its nature capable of being done instantly--as, for example, if it consists in the payment of money only--it must be performed immediately upon the thing to be done being exactly ascertained. (Civ. Code §1657)
Recommendation: Since both statutory interpretation and and rules of contract interpretation are applied by the courts, boards should seek legal counsel whenever interpretation of CC&Rs or the law are at issue. Note: the above codes may not be the most recent version. Always check statutes for the latest version.
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