Epsten, APC

This is the generic term used to describe the types of developments that are subject to the Davis-Stirling Act, specifically condominium projects, planned developments, stock cooperatives and community apartment projects. This is defined in Civil Code section 4100. Requirements for establishing a common interest development are found in Civil Code section 4200, and there is a requirement that no common interest development can exist if it has no common area. (Civ. Code §4201)

Most associations have streets and common area parcels/lots that were deeded to them by the developer. In most cases, the mailing address for tax bills (if any) would go to the association c/o its management company. In some cases, the last known mailing address for those streets and common area parcels/lots is that of the developer. Unfortunately, the easiest way to verify the ownership and mailing address for each of the Association’s streets and common area parcels/lots is through a title company or through the law firm that has title plant access.

California Civil Code section 4775(a) provides that an owner is generally responsible for maintaining and repairing the components within his/her separate interest unless the CC&Rs provide for a different allocation of responsibility. Before any work is performed on a ceiling within a building constructed before 1979, that ceiling should be inspected by a licensed expert for asbestos-containing materials. If such materials are found, certain remediation and notification requirements may be triggered.

A community apartment project is one of the four types of CIDs that are considered common interest developments in Civil Code section 4100. This type of CID is unusual and quite rare. There are only a couple of them we have seen in La Jolla, although there are others elsewhere in California. They are often mislabeled “co-ops,” but they are different from stock cooperatives although they share some characteristics in common with both condominiums and stock cooperatives. In a typical community apartment project, an association owns no real property, but it is responsible for the operation and management of the development as in any other CID. The owners either have a percentage ownership or equal fractional ownership interest in the entire development, including the separate interests (i.e., apartments or interior airspaces). Owners do not own but rather have an exclusive right to occupy the unit. Some community apartment projects may not have separate CC&Rs but were created solely by covenants recorded in the original grant deeds to the first purchasers. See Civil Code section 4105.

In the context of community associations, a “covenant” refers to a provision within the CC&Rs, usually a restriction on the use of land or a requirement to belong to the association, and to pay assessments for the support of the association. These conditions are construed as promises by both the association and its members to abide by the CC&Rs. Traditionally enforcement of covenants was subject to diverse requirements in order to bind both parties to the covenant; accordingly, the Davis-Stirling Act says that the restrictions in CC&Rs are “equitable servitudes,” which are easier to enforce.

A censure is a statement of reprimand, criticism and/or disapproval of a director, often accompanied by a request from the board for a director’s resignation. In cases of director misconduct or dereliction of duty, a board might pass and record in the meeting minutes a motion of and reasons for censure. Such situations might include, but are not limited to, breaches of fiduciary duty, failure to comply with an association’s code of ethics, meeting disruptions and disclosure of confidential information learned in executive session. Censure is distinguished from removal by the board of one of its officers and does not constitute removal from the board.

A Community Service Organization is defined in Civil Code section 4110 as a nonprofit entity (not a CID) organized to provide services to residents of a CID or to the public, to the extent a CID’s common area or facilities are available to the public. The term is also used in Civil Code sections 4575, 4580, 5240, and 5580.

The association is generally not liable for criminal acts unless, because of prior incidents or other factors, it is reasonably foreseeable that similar future criminal acts might occur. In that case, the association must take reasonable steps to help prevent those future acts. Some cases have held, however, that an association’s duty to the residents is similar to that of a landlord, who owes a duty of reasonable care to protects its residents from the foreseeable risk of criminal activity (Frances T. v. Village Green Owners Association (1986) 42 Cal.3d 490, 229 Cal.Rptr. 456).

An association may not be aware of it but there are many pitfalls in not verifying the mailing address on public records, such as:

• The mailing address on the Secretary of State website
• The mailing address with the County’s Tax Assessor;
• The mailing address with the Franchise Tax Board; and
• The mailing address with the Post Office.

The association’s manager or its board (if self-managed) should check the Secretary of State website to insure that “Agent for Service of Process” lists the correct person and address, as the association’s named agent will get notices from the Secretary of State and the Franchise Tax Board intended for the Association, including the forms the Association will need to complete and return periodically to stay in good standing; also the County’s Tax Assessor will send out tax bills and notices of tax default to the association to the address listed on the Secretary of State’s website. Likewise, the agent named on the Secretary of State’s website may be the entity served with legal papers. If the association does not receive the legal papers, this could result in a significant default judgment being taken against the association. The named agent should not be a developer representative who is no longer involved or a management company that hasn’t managed the Association for several years. Therefore, the association’s manager or its board (if self-managed), should make sure to keep the mailing address update to date. This will insure the timely receipt of any notices from the Secretary of State, Franchise Tax Board, County Tax Assessor, and any other. [See Article, Corporate Status Counts!]

Where two or more parties (including a plaintiff) are liable for the damage or injury alleged in a lawsuit, the judge or jury will determine the comparative fault of the parties, expressed as a percentage. If a plaintiff is found to be partially at fault, then the amount of damages awarded is reduced by the percentage of the plaintiff’s comparative fault. If two or more defendants are found to be comparatively at fault, a plaintiff may recover the full amount of damages from either defendant. It is incumbent upon co-defendants to claim contribution from each other for the amount of damages paid in excess of their respective comparative fault. Defendants may also counter sue third parties for contribution if the third party bears some comparative fault.