Successor in Interest
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SUCCESSOR IN INTEREST

QUESTION: My neighborhood has CC&Rs but the Declarant no longer exists and there is no public record of their ceding or transferring their rights to anyone. What does that mean for the declaration?

ANSWER: Your Declaration of Covenants Conditions & Restrictions (CC&Rs) should be fine as-is. Your CC&Rs were recorded by the Declarant when he created your development and their recordation brought your association into existence.

Successor in Interest. Your HOA is not the successor in interest to the developer. Instead, it is a separate entity with entirely different obligations, duties and goals that continues to exist even when your developer ceases to. You don't need the developer's powers, your association has its own powers via the CC&Rs, bylaws, Davis-Stirling Act and Corporations Code.

Quiet Title. It is possible, however, that the developer failed to transfer title to the common areas from his company to the association. That sometimes happens in planned developments and creates a problem. If that were to happen, your association would need to go into court on a quiet title action to have title transferred to the association.

Recommendation: When associations go through a transition from developer to homeowner control, they should use a checklist of records to make sure everything is transferred before the developer disappears into the night.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC