A license is an authorization given by the owner of land to another to perform an act or acts on the owner’s property. The owner’s permission may be expressed or implied. The license is a personal privilege; it is not an interest or right in the land. Generally, licenses are revocable at will by the land owner. The classic license is personal to the license holder and cannot be transferred, assigned, conveyed, or inherited. Written license agreements frequently blur the line between easements and licenses.

Lump Sum (Fixed Price) Contracts

When the contract price is stated as a lump sum, the contract is referred to as a fixed price contract. Under a fixed price contract, the contractor bears all of the risks associated with the actual cost of completing the project. If the actual construction costs exceed the fixed price, the contractor is responsible for such excess costs and is obligated to complete the work for the fixed price. On the other hand, if the actual construction costs are less than anticipated, the contractor is entitled to the entire fixed price amount. The cost savings accrue to the contractor, increasing the contractor’s profit on the project.

Late Fees

Assessments are generally considered delinquent 15 days after they become due. Once an assessment is delinquent, an association may impose a late fee of $10.00 or up to 10% of the delinquent assessment, unless otherwise stated in the CC&Rs. Since assessment payments are generally applied to the oldest assessment due, late fees may accrue on an owner’s assessment account until the account is paid in full


Laws is a generic term that encompasses virtually all types of local, state and federal legislation that has been enacted by the relevant representative body and signed by the chief executive or other authorized executive officer of the governmental unit. The term also applies to regulations that have been enacted by local, state and federal agencies that have non-elected officials appointed to enforce and implement legislative enactments proving the adoption of regulations. Finally, laws also encompass the holdings in court decisions and their interpretation of constitutional, legislative and administrative enactments.

Leasing Restrictions

Generally, restrictions in an association’s governing documents limiting an owner’s right to lease a residence. The restrictions may be as to the length of the lease, the number of persons residing in the dwelling, the age of those entitled to reside in a dwelling, how many dwellings within a community may be leased at a given time, or other limitations. California law recognizes the right of owners within a common interest development to choose to regulate the right to lease, within specified parameters.

Legal Fees

Pursuant to Civil Code section 5975, the prevailing party in a legal action to enforce the governing documents shall be awarded reasonable attorney’s fees and costs. What is deemed “reasonable” is left to the discretion of the court upon a motion by the prevailing party.

Liability, Limiting

More and more contracts, especially those of design professionals, contain language that tries to limit the liability of the service vendor. These enforceable provisions should be deleted whenever possible, as they serve to transfer the risk of loss to the association rather than the service vendor. Service vendors should remain responsible for any damage or loss their work causes.

License Status of Contractors

The California Contractors State Licensing Board (“CSLB”) issues and regulates contractor’s licenses. A contractor’s license can be suspended or revoked by the CSLB. An association should always verify that the contractor is properly licensed (and insured) before entering into a contract or using the contractor’s services. The CSLB website provides a license status check for consumers. See Contractors and Unlicensed Contractors.