By David A. Kline, Esq.
September 2, 2019, marks the twenty fifth anniversary of the California Supreme Court’s decision in Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal. 4th 361 (Nahrstedt), the seminal case in California common interest development law.
You might remember Nahrstedt as the “cat case.” Nahrstedt involved a challenge to a pet prohibition in a condominium community’s CC&Rs. The homeowner asserted that the association’s pet restriction was unreasonable and could not be enforced against her three indoor cats because they caused no noise and did not create a nuisance. The court of appeals agreed with her. But, the Supreme Court disagreed for a number of reasons that have affected the reasoning of many court cases since then.
In this article, we will reexamine the reasoning in Nahrstedt, explore its influence on other cases, and consider how it might be expanded in the future.
The Court in Nahrstedt explained:
[U]nder subdivision (a) of [Civil Code] section 1354 [currently codified as 5975] the use restrictions for a common interest development that are set forth in the recorded declaration are “enforceable equitable servitudes, unless unreasonable.” In other words, such restrictions should be enforced unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit.
This reasoning was extended in Sui v. Price (2011) 196 Ca. App. 4th 933 to apply the same test for reasonableness of an association’s operating rule that authorized the towing of inoperable vehicles. In Dolan-King v. Rancho Santa Fe Association (2000) Cal.Rptr.2d 280, the court relied on this same language to uphold an association’s architectural guidelines that were more specific than the general language in its CC&Rs.
The Court in Nahrstedt said, “[T]he reasonableness or unreasonableness of a condominium use restriction that the Legislature has made subject to section 1354 is to be determined not by reference to facts that are specific to the objecting homeowner, but by reference to the common interest development as a whole.” In other words, it did not matter that her indoor cats did not bother anyone. Their mere presence violated the CC&Rs and the restriction in the CC&Rs was reasonable as applied to the entire community.
That language was cited in Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600, a case involving a non-resident owner’s right to use the recreational facilities. In the Liebler case, the CC&Rs prohibited any severance of the right to use the recreational facilities from the right to use a unit. The court held that the restriction requiring owners to give up their right to use the recreational facilities and assign the right to their tenants is reasonable when applied to the development as a whole.
That language was also cited in Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156. In that case, the court rejected an owner’s challenge to the reasonableness of the “single-family residential” use restriction in the CC&Rs when used to prohibit him from renting rooms out in his home to multiple residents under separate rental agreements.
Nahrstedt also held:
[W]hen … a restriction is contained in the declaration of the common interest development and is recorded with the county recorder, the restriction is presumed to be reasonable and will be enforced uniformly against all residents of the common interest development unless the restriction is arbitrary, imposes burdens on the use of lands it affects that substantially outweigh the restriction’s benefits to the development’s residents, or violates a fundamental public policy.
The court in Cebular v. Copper Arms Homeowners Association (2006) 47 Cal.Rptr.3d 666, relied on this language to uphold a CC&R provision providing for unequal, weighted voting rights and assessment amounts based on the size of the unit airspace owned by an owner.
The court’s decision in Nahrstedt has a big impact on community associations and how they are governed. Often, when representing a faceless corporation seemingly ruthlessly enforcing its CC&Rs against a sympathetic resident, it can be difficult to find words that will elegantly express why the association’s argument deserves attention. Friends and family sometimes ask me, “how could you remove a child from senior housing when the court granted custody to his grandmother to remove him from his drug-addicted parents?” or “how could you foreclose on a homeowner struggling to make ends meet?” I tell them what the Supreme Court said in Nahrstedt – “Our social fabric is founded on the stability of expectation and obligation that arises from the consistent enforcement of the terms of deeds, contracts, wills, statutes, and other writings. To allow one person to escape obligations under a written instrument upsets the expectations of all the other parties governed by that instrument … that the instrument will be uniformly and predictably enforced.”
Sometimes, when I struggle to find an argument to benefit my client and I can’t think of anything better than, “it just isn’t fair,” I re-read Nahrstedt and find a nugget of wisdom. I am reminded of one association’s onerous restriction in the CC&Rs requiring membership approval and lender approval for any changes to the landscaping design of the community. When our client wanted to convert to drought tolerant landscaping during the statewide drought, we relied on Nahrstedt to argue that the restriction violates a fundamental public policy in support of water conservation.
How might courts rely upon Nahrstedt in the future?