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Forming California Common Interest Developments

Guide your client successfully through all considerations and necessary steps for creating a valid common interest development in California.

Guide your client successfully through all considerations and necessary steps for creating a valid common interest development in California.

  • Updated forms and expert drafting tips for governing documents
  • Strategies for projects governed by the 2014 Commercial & Industrial CID Act
  • Commercial and mixed-use condominiums
  • Obtaining CalBRE approval for common interest subdivision sales
  • Lender requirements for Fannie Mae, Freddie Mac, and VA
  • Condominium conversions; time-share plans
  • Master planned communities
OnLAW RE94610

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Guide your client successfully through all considerations and necessary steps for creating a valid common interest development in California.

  • Updated forms and expert drafting tips for governing documents
  • Strategies for projects governed by the 2014 Commercial & Industrial CID Act
  • Commercial and mixed-use condominiums
  • Obtaining CalBRE approval for common interest subdivision sales
  • Lender requirements for Fannie Mae, Freddie Mac, and VA
  • Condominium conversions; time-share plans
  • Master planned communities

1

Nature and Characteristics of Common Interest Developments

Richard C. Smith

  • I.  INTRODUCTION
    • A.  Scope of Book  1.1
    • B.  Lawyer’s Role
      • 1.  Factors Determining Role  1.2
      • 2.  Representing the Developer  1.3
        • a.  Basic Information Needed About Project  1.4
        • b.  Preparation of Governing Documents  1.5
      • 3.  Ethical Considerations
        • a.  Conflicts of Interest  1.6
        • b.  Fair Allocation of Common Expenses in Mixed-Use Development  1.7
        • c.  Circumvention of Development Conditions  1.8
      • 4.  Terminology  1.9
        • a.  Association  1.10
        • b.  Common Area  1.11
        • c.  Common Interest Development  1.12
        • d.  Community Apartment Project  1.13
        • e.  Condominium  1.14
        • f.  Condominium Plan  1.15
        • g.  Condominium Project  1.16
        • h.  Declaration  1.17
        • i.  Exclusive Use Common Area  1.18
        • j.  Governing Documents  1.19
        • k.  Planned Development  1.20
        • l.  Separate Interest  1.21
        • m.  Stock Cooperative  1.22
  • II.  NATURE OF COMMON INTEREST DEVELOPMENTS
    • A.  Early Statutory History  1.23
    • B.  History of Davis-Stirling Common Interest Development Act  1.24
    • C.  Regulations  1.25
      • 1.  Local Regulations
        • a.  Land Use Regulation of Development  1.26
        • b.  Local Regulatory Accommodation: Land Use Flexibility  1.27
      • 2.  State Statutes  1.28
      • 3.  Federal Requirements
        • a.  Condominium and Cooperative Abuse Relief Act (CCARA)
          • (1)  Applicability and Enforceability of Act  1.29
          • (2)  Right to Terminate Contracts  1.30
          • (3)  Right to Terminate Leases  1.31
        • b.  Interstate Land Sales Full Disclosure Act  1.32
    • D.  Shared Characteristics
      • 1.  Common Areas
        • a.  Statutory Definitions  1.33
          • (1)  Community Apartment Project and Stock Cooperative  1.34
          • (2)  Planned Development  1.35
            • (a)  Mutual or Reciprocal Rights  1.36
            • (b)  History of Mutual or Reciprocal Easement Rights  1.37
            • (c)  Problems Created by Phrase “Mutual or Reciprocal”  1.38
          • (3)  Condominium Project  1.39
        • b.  Exclusive Use Common Areas  1.40
          • (1)  Creation of Exclusive Use Common Areas  1.41
          • (2)  Designation of Exclusive Use Common Area  1.42
        • c.  Centralized Management
          • (1)  Management by Association  1.43
          • (2)  Managing Agent  1.44
      • 2.  Assessments  1.45
      • 3.  Covenants and Restrictions  1.46
  • III.  CONDOMINIUM PROJECTS
    • A.  Condominium  1.47
    • B.  Condominium Project  1.48
    • C.  Elements of Condominium Projects  1.49
      • 1.  Undivided Interest in Common in a Portion of Real Property (Common Area)  1.50
      • 2.  Separate Interest in Space Called a “Unit”  1.51
        • a.  Characterization of Interior Surfaces and Interior Improvements  1.52
        • b.  Individually Owned Spatial Elements  1.53
    • D.  Hybrid Condominium Projects  1.54
      • 1.  Airspace Subdivisions  1.55
      • 2.  Airspace Phasing of Single-Lot and “Dirtless” Condominium Projects  1.56
        • a.  Airspace Phasing  1.57
        • b.  “Dirtless” or “Cloud” Condominium Projects  1.58
    • E.  Statutory Requirements
      • 1.  Establishment of Condominium Project  1.59
        • a.  Record a Declaration  1.60
        • b.  Record a Condominium Plan  1.61
          • (1)  Contents of Condominium Plan  1.62
          • (2)  Recordation  1.63
        • c.  Record a Final Subdivision Map or Parcel Map  1.64
        • d.  Convey at Least One Condominium  1.65
      • 2.  Nature of Interests Conveyed
        • a.  Undivided Interest in Common  1.66
        • b.  Separate Interest in Space  1.67
        • c.  Permitted Estates  1.68
        • d.  Nonexclusive Rights in Common Area  1.69
        • e.  Owner’s Right to Improve or Alter Separate Interest  1.70
          • (1)  Right to Decorate Interior  1.71
          • (2)  Modifications to Accommodate Disabled Persons  1.72
  • IV.  PLANNED DEVELOPMENTS
    • A.  Historical Background  1.73
    • B.  Definition; Statutory Criteria  1.74
    • C.  Establishment  1.75
    • D.  Association  1.76
  • V.  OTHER COMMON INTEREST SUBDIVISIONS
    • A.  Stock Cooperatives  1.77
    • B.  Limited Equity Housing Cooperatives  1.78
    • C.  Community Apartment Projects  1.79
      • 1.  Conversion to Condominium Projects  1.80
      • 2.  Contrast Informal Tenancy in Common Arrangement  1.81
    • D.  Commercial and Industrial Condominium Projects and Planned Developments  1.82

2

Subdivision Map Act and Condominium Plans

Jeffrey G. Wagner

  • I.  INTRODUCTION  2.1
  • II.  SUBDIVISION MAP ACT
    • A.  Scope of Map Act  2.2
      • 1.  Definition of Subdivision  2.3
        • a.  Scope of Applicability to Stock Cooperatives  2.4
        • b.  Applicability to Informal Community Apartment Projects  2.5
      • 2.  Map Act Conversion Exemptions (Stock Cooperatives and Community Apartment Projects)  2.6
    • B.  Condominiums
      • 1.  Condominium Map Waiver (Single Lot Condominium Projects)  2.7
      • 2.  Conversion of Apartments to Condominiums  2.8
      • 3.  Establishing Rental Condominiums  2.9
        • a.  Approvals Required  2.10
        • b.  Notices to Tenants Under Govt C §66459  2.11
          • (1)  Right of First Refusal  2.12
          • (2)  Troubling Aspects of Govt C §66459  2.13
          • (3)  Form: Govt C §66459 Notice to Tenants  2.14
    • C.  Planned Development Mapping Considerations  2.15
      • 1.  Multiple Common Lots  2.16
      • 2.  Consistency of Declaration of Restrictions With Map  2.17
  • III.  CONDOMINIUM PLANS
    • A.  Basic Requirements  2.18
      • 1.  Unit Description  2.19
      • 2.  Recordation Requirements  2.20
      • 3.  Certification Requirements  2.21
      • 4.  Common Area Description  2.22
      • 5.  Attorney and Title Company Review  2.23
      • 6.  Exclusive Use Common Areas  2.24
        • a.  Methods of Assigning Exclusive Use Common Areas  2.25
        • b.  Antennas and Satellite Dishes  2.26
      • 7.  Amending Condominium Plan  2.27
    • B.  Conflicts Between Plan and What Was Built  2.28
    • C.  Condominium Plans and Map Act  2.29
      • 1.  Plan Is Not Recorded With Map  2.30
      • 2.  Plan Is Recorded With Map  2.31
    • D.  Types of Condominium Plans  2.32
      • 1.  Traditional Condominium Plans  2.33
      • 2.  Dirtless Condominiums  2.34
        • a.  Advantages of Dirtless Condominiums  2.35
        • b.  Phased Projects  2.36
        • c.  Compliance With Subdivision Map Act  2.37
      • 3.  Site or Envelope Condominiums  2.38
      • 4.  Module Developments  2.39

3

State Regulation of Common Interest Subdivision Sales

David E. Bruce

  • I.  PURPOSE AND COVERAGE OF SUBDIVIDED LANDS LAW
    • A.  Subdivision Regulation  3.1
    • B.  Legislative History
      • 1.  Before Davis-Stirling Common Interest Development Act  3.2
      • 2.  Davis-Stirling Common Interest Development Act  3.3
    • C.  Coverage of Subdivided Lands Law; Exempted Subdivisions
      • 1.  Standard Subdivisions  3.4
      • 2.  Common Interest Subdivisions  3.5
      • 3.  Exemptions From Coverage
        • a.  Commercial and Industrial Subdivisions  3.6
        • b.  Public Agencies  3.7
        • c.  Sales to Subdividers  3.8
        • d.  Other Exemptions  3.9
      • 4.  Out-of-State Subdivisions  3.10
    • D.  Environmental Impact Evaluation  3.11
  • II.  APPLICATION FOR PUBLIC REPORT
    • A.  Purposes of Public Report  3.12
    • B.  Notice of Intention  3.13
      • 1.  Forms Needed  3.14
      • 2.  Preparation of Application  3.15
      • 3.  Phased Applications  3.16
    • C.  Who May Obtain Public Report  3.17
    • D.  Basic Procedural Information
      • 1.  Application Terminology  3.18
      • 2.  Master Planned Communities  3.19
      • 3.  Separate Reports Required  3.20
      • 4.  Filing Fees  3.21
    • E.  Application Process
      • 1.  What Constitutes “Substantially Complete” Application  3.22
      • 2.  Processing; Time Limits  3.23
      • 3.  Preliminary Public Report  3.24
        • a.  Actions Permitted by Preliminary Public Report  3.25
        • b.  Application for Preliminary Public Report  3.26
      • 4.  Conditional Public Report
        • a.  Actions Permitted by Conditional Public Report  3.27
        • b.  Application for Conditional Public Report  3.28
      • 5.  Duplicate Budget Package  3.29
      • 6.  Master Management Document Review  3.30
  • III.  EVALUATION OF APPLICATION: DRE REVIEW PROCEDURES  3.31
    • A.  Analysis of Governing Instruments  3.32
    • B.  Budget Analysis  3.33
  • IV.  EVALUATION OF APPLICATION: SUBSTANTIVE REQUIREMENTS  3.34
    • A.  Purchase Money and Deposit Protection
      • 1.  Statutory Restrictions  3.35
      • 2.  DRE Regulation of Reservation Deposits Under Preliminary Report  3.36
      • 3.  Under Blanket Encumbrance
        • a.  Definitions  3.37
        • b.  Alternative Purchaser Protection Devices  3.38
          • (1)  Impounding  3.39
            • (a)  Disbursements  3.40
            • (b)  Escrow Depositories; Escrow Instructions  3.41
          • (2)  Title Held in Trust  3.42
          • (3)  Bonding  3.43
      • 4.  No Blanket Encumbrance  3.44
        • a.  Impounding
          • (1)  All Lots  3.45
          • (2)  Improved Residential Lots  3.46
        • b.  Association Master Bond  3.47
        • c.  Security for Completion of Improvements  3.48
      • 5.  Real Property Sales Contracts (CC §2985)  3.49
    • B.  Completion of Improvements
      • 1.  General Requirements  3.50
      • 2.  Offsite Improvements  3.51
        • a.  Adequacy of Offsite Improvements and Services  3.52
        • b.  Regulation of Mutual Water Companies  3.53
          • (1)  Transfer to DRE Control  3.54
          • (2)  Certification  3.55
        • c.  Ensuring Completion  3.56
          • (1)  Master Geographic Letters  3.57
          • (2)  Types of Security for Completion  3.58
          • (3)  Special District, Entity, Taxing Area, or Assessment District  3.59
      • 3.  Onsite Improvements  3.60
        • a.  Bonding  3.61
        • b.  Impounding  3.62
        • c.  Impounding and Bonding Combined  3.63
        • d.  Other Security Arrangements  3.64
        • e.  Conversion Projects  3.65
    • C.  Annexation
      • 1.  Need for Phased Development  3.66
      • 2.  DRE Requirements  3.67
      • 3.  Deannexation of a Phase  3.68
    • D.  Homeowners Association
      • 1.  Budget
        • a.  DRE Requirements
          • (1)  Accurate Estimate of Costs  3.69
          • (2)  Reserves  3.70
          • (3)  Phased Projects  3.71
          • (4)  Subdivisions Real Estate Specialist Review; Approval of Budget  3.72
        • b.  Operating Cost Manual  3.73
      • 2.  Special Arrangements for Maintenance of Facilities
        • a.  Adequate Security Arrangement Requirements  3.74
        • b.  Subsidization of Common Area Maintenance  3.75
        • c.  Start-up Funds  3.76
      • 3.  Inactive Associations  3.77
      • 4.  Ensuring Enforceability of Declaration of Restrictions
        • a.  Enforcement Against Subsequent Purchasers  3.78
        • b.  Subordination of Liens to Declaration of Restrictions  3.79
        • c.  Subordination of Lien for Assessments to Lien of Purchase Money Lender  3.80
      • 5.  Governing Instruments  3.81
      • 6.  Association Common Areas, Including Ownership and Transfer  3.82
        • a.  Delayed Transfer or Alternative Arrangement  3.83
        • b.  Phased Apartment Conversion  3.84
        • c.  Developer’s Reservation of Rights  3.85
      • 7.  Assessments and Liens  3.86
      • 8.  Allocation of Assessments
        • a.  Regular Assessments  3.87
          • (1)  Circumstances Justifying Weighted Assessment  3.88
          • (2)  Permissible Delay of Assessments  3.89
        • b.  Special Assessments  3.90
        • c.  Cost Center  3.91
          • (1)  Cost Center Budgets  3.92
          • (2)  Governing Instruments for Cost Centers  3.93
          • (3)  Benefits of Cost Center Versus Sub-Association  3.94
        • d.  Power to Increase Regular or Special Assessments  3.95
        • e.  Commencement of Assessments  3.96
        • f.  Subordination of Assessments to Purchase Money Liens  3.97
      • 9.  Association Meetings  3.98
      • 10.  Voting Rights
        • a.  Members’ Voting Rights  3.99
          • (1)  Two-Class Voting Structure  3.100
          • (2)  Termination of Two-Class Voting Structure  3.101
        • b.  Delegate Voting  3.102
      • 11.  Governing Body
        • a.  Election  3.103
        • b.  Meetings  3.104
        • c.  Common Interest Development Open Meeting Act  3.105
        • d.  Powers and Limitations
          • (1)  Enumerated General Powers  3.106
          • (2)  Limitations on General Powers  3.107
          • (3)  Use of Reserve Account  3.108
          • (4)  Liability of Directors; Insurance  3.109
      • 12.  Review of Accounts
        • a.  Monthly Review of Financial Accounts  3.110
        • b.  Study of Reserve Account  3.111
      • 13.  Inspection and Copying of Books and Records  3.112
      • 14.  Amending Governing Instruments
        • a.  Amending Declaration of Restrictions  3.113
        • b.  Amending Articles of Incorporation and Bylaws  3.114
        • c.  Amending Governing Instruments With Two-Class Voting Structure  3.115
      • 15.  Disciplining Members  3.116
      • 16.  Annexation of Additional Property  3.117
      • 17.  Architectural Control  3.118
      • 18.  Distribution of Proceeds on Condemnation or Destruction of Condominium Common Area  3.119
    • E.  Other Governmental Requirements
      • 1.  Nonprofit Mutual Benefit Corporation Law  3.120
      • 2.  Dispute Resolution  3.121
      • 3.  Local Government  3.122
    • F.  Senior Citizen Developments  3.123
    • G.  Warranties and Guaranties in Offering
      • 1.  Statutory Requirements; DRE Policy  3.124
      • 2.  Creative Financing Programs  3.125
  • V.  ISSUANCE OF PUBLIC REPORT
    • A.  Conditions of Issuance  3.126
    • B.  Content of Report  3.127
      • 1.  Special Notes  3.128
      • 2.  Natural Hazard Area Disclosure  3.129
    • C.  Use of Public Report  3.130
    • D.  Denial of Public Report  3.131
      • 1.  Administrative Appeal of Denial  3.132
      • 2.  Commissioner’s Decision  3.133
      • 3.  Judicial Appeal  3.134
  • VI.  AMENDING PUBLIC REPORT
    • A.  Material Change in Offering  3.135
      • 1.  Scope of Subdivider’s Duty to Notify  3.136
      • 2.  Consequences of Failure to Notify of Material Change  3.137
      • 3.  DRE’s Actions on Notification  3.138
      • 4.  Lender Exemption From Requirement to Obtain Amended Public Report  3.139
    • B.  Application for Amended Public Report  3.140
    • C.  Special Procedures
      • 1.  Expedited Processing; RE Form 635A  3.141
      • 2.  Budget Change; RE Form 618H  3.142
    • D.  Interim Public Report  3.143
    • E.  Material Changes in Governing Instruments
      • 1.  Legal Requirements  3.144
      • 2.  Procedure  3.145
        • a.  Application for Consent to Change  3.146
        • b.  Objections to Consent; Informal Hearing  3.147
    • F.  Renewal of Public Report  3.148
  • VII.  VIOLATIONS AND ENFORCEMENT
    • A.  Consequences of Violations of Subdivided Lands Law  3.149
    • B.  DRE Procedure in Handling Violations  3.150
    • C.  Remedies Under Subdivided Lands Law
      • 1.  Desist and Refrain Order  3.151
      • 2.  Hearing  3.152
      • 3.  Criminal Penalties
        • a.  Punishable Violations of Act  3.153
        • b.  Advertising Violations  3.154
      • 4.  Purchaser’s Right to Rescind  3.155
      • 5.  Statutes of Limitations  3.156
  • VIII.  CHECKLISTS OF DOCUMENTS REQUIRED FOR FINAL PUBLIC REPORT
    • A.  Checklist: Condominiums, Planned Developments, Community Apartment Projects, and Undivided Interest Subdivisions  3.157
    • B.  Checklist: Stock Cooperatives and Limited Equity Housing Developments  3.158
    • C.  Checklist: Standard Subdivisions  3.159

4

Condominium Conversions

F. Scott Jackson

  • I.  INTRODUCTION  4.1
  • II.  PRELIMINARY CONSIDERATIONS
    • A.  Definition of Conversion  4.2
    • B.  Principal Factors Determining Decision to Convert  4.3
      • 1.  Qualification as Vested Project
        • a.  Obtaining Permits and Approvals  4.4
        • b.  Checklist: Analyzing Whether Conversion Has Vested  4.5
      • 2.  Local Regulation
        • a.  Justification  4.6
        • b.  Scope of Authority  4.7
        • c.  Particular Local Approaches  4.8
      • 3.  Purchase Considerations
        • a.  Sale Contingencies  4.9
        • b.  Seller and Lender Cooperation  4.10
      • 4.  Tenant Cooperation  4.11
      • 5.  Advantages and Disadvantages of Conversion
        • a.  Maximization of Profits  4.12
        • b.  Impact of Rent Control Ordinances  4.13
        • c.  Home Ownership  4.14
        • d.  Tax Treatment  4.15
  • III.  PLANNING THE CONVERSION
    • A.  Need for Professional Team  4.16
    • B.  Phasing  4.17
    • C.  Considerations in Purchasing Existing Buildings for Conversion
      • 1.  Physical Suitability for Conversion; Status of Existing Tenancies  4.18
      • 2.  Builder’s Right to Repair Law (CC §§895–945.5)  4.19
      • 3.  Checklist: Procedures for Conversion  4.20
  • IV.  SUBDIVISION MAP ACT REQUIREMENTS
    • A.  Applicability of Act to Conversions  4.21
      • 1.  Conversion Map Requirements  4.22
      • 2.  Tenant Protections  4.23
    • B.  Local Government Authority Under the Act
      • 1.  Relationship to Local Zoning Power  4.24
      • 2.  Local Implementation of Act; Restrictions
        • a.  Map Required  4.25
        • b.  Exactions, Dedications, Conditions  4.26
        • c.  Restrictions on Local Government  4.27
    • C.  Tenant Protections Under Map Act
      • 1.  Notice Requirements
        • a.  Notice to Current Tenants
          • (1)  Converter’s Notices  4.28
          • (2)  Local Government’s Notices  4.29
        • b.  Notice to Prospective Tenants  4.30
        • c.  Timing of 180-Day Notice of Intent to Convert; 60-Day Notice of Intent to Convert  4.31
        • d.  Form: 180-Day Notice of Intent to Convert  4.32
        • e.  Form: Notice of Final Map Approval  4.33
      • 2.  Exclusive Right of Purchase  4.34
        • a.  Form: Notice of Application for Public Report  4.35
        • b.  Form: 90-Day Notice of Exclusive Right to Purchase  4.36
        • c.  Waivers of Right to Purchase  4.37
        • d.  Form: Waiver of Right to Purchase  4.38
        • e.  Problem Areas
          • (1)  Combining Units  4.39
          • (2)  Eliminating or Dividing Units  4.40
          • (3)  Use Restrictions  4.41
          • (4)  Change in Terms of Offer  4.42
      • 3.  Miscellaneous Tenant Considerations
        • a.  Provisions in Existing Leases  4.43
        • b.  Tenant Discounts  4.44
        • c.  Former Tenants  4.45
  • V.  CALIFORNIA ENVIRONMENTAL QUALITY ACT  4.46
  • VI.  CONVERSION REGULATION BY CALIFORNIA COASTAL COMMISSION  4.47
  • VII.  NEW CONSTRUCTION AND SHELVED ENTITLED PROJECTS  4.48
    • A.  Public Report Issues  4.49
    • B.  Legal Management Documents  4.50
    • C.  Form: Prospective Tenant Notices  4.51
    • D.  Builder’s Right to Repair Law  4.52
  • VIII.  DRE CONVERSION REGULATIONS
    • A.  Application for Public Report  4.53
    • B.  Inspection Reports  4.54
    • C.  Special Document Provisions
      • 1.  Sales Documents  4.55
      • 2.  Project Documents; Condominium Plan  4.56
      • 3.  Form: Request for Exemption From Separate Assessment  4.56A
      • 4.  Establishing Rental Condominiums  4.57
        • a.  Approvals Required  4.58
        • b.  Notices to Tenants (Govt C §66459)  4.59
          • (1)  Right of First Refusal  4.60
          • (2)  Troubling Aspects of Govt C §66459  4.61
          • (3)  Form: Govt C §66459 Notice to Tenants  4.62
  • IX.  CONVERSION OF STOCK COOPERATIVES AND COMMUNITY APARTMENT PROJECTS
    • A.  Subdivision Map Act  4.63
    • B.  Favorable Vote of Lenders Required  4.64
    • C.  Financing Stock Cooperatives and Community Apartment Projects  4.65
    • D.  Local Government Authority Under the Act  4.66
    • E.  DRE Jurisdiction  4.67

5

Time-Share Plans

John Rogers Burk

D. Scott Turner

  • I.  TIME-SHARES IN CALIFORNIA
    • A.  Short History of Time-Share Regulation in California  5.1
    • B.  Definition of Time-Share Plan  5.2
    • C.  Which Time-Share Plans Are Subject to the 2004 Act?  5.3
  • II.  REGULATION OF TIME-SHARE PLANS
    • A.  Vacation Ownership and Time-Share Act of 2004  5.4
      • 1.  Undivided Interest Subdivisions  5.5
      • 2.  Sales of Fewer Than 12 Time-Share Interests  5.6
      • 3.  Commercial Subdivision Exemption  5.7
      • 4.  Purchaser Protections
        • a.  Notice of Material Change in Offering  5.8
        • b.  Purchase Money Protection  5.9
        • c.  Completion Assurances  5.10
      • 5.  Public Reports
        • a.  Final Public Report  5.11
        • b.  Preliminary Public Report  5.12
        • c.  Conditional Public Report  5.13
      • 6.  Bulk Sales Programs  5.14
      • 7.  Resale Programs  5.15
        • a.  Developer Resale Programs  5.16
        • b.  Lender Resale Programs  5.17
        • c.  Broker Resale Programs  5.18
      • 8.  Offsite Recreational Amenities  5.19
        • a.  Ownership of Offsite Amenities  5.20
        • b.  Term of Usage  5.21
        • c.  Assurances of Completion  5.22
    • B.  Subdivision Map Act  5.23
    • C.  Time-Share Plans Outside California  5.24
    • D.  Interstate Land Sales Full Disclosure Act  5.25
    • E.  Davis-Stirling Common Interest Development Act  5.26
    • F.  Consumer Protection Laws
      • 1.  Sales of “Goods and Services”  5.27
      • 2.  Fraud   5.27A
  • III.  SECURITIES LAW CONSIDERATIONS  5.28
    • A.  California Securities Law  5.29
      • 1.  Classification as Investment Contract  5.30
      • 2.  Risk Capital Test Under California Securities Law  5.31
    • B.  Federal Securities Law
      • 1.  Definition of Security  5.32
      • 2.  Howey/Forman Test; Elements  5.33
        • a.  Purchaser’s Use of Interest Acquired  5.34
        • b.  What Constitutes “Profits”  5.35
        • c.  Return Generated Solely by Others’ Efforts  5.36
      • 3.  No-Action Letters  5.37
      • 4.  Risk Capital Test Under Federal Securities Law  5.38
      • 5.  Practical Advice for Time-Share Developers
        • a.  Avoid Rental Pools; Emphasize Personal Use  5.39
        • b.  Structure as Nonprofit Corporation  5.40
  • IV.  REAL PROPERTY TAXATION OF TIME-SHARE SUBDIVISION INTERESTS  5.41
  • V.  POINTS-BASED TIME-SHARE INTERESTS  5.42
    • A.  Structuring as Nondeeded Time-Share Interest  5.43
    • B.  Point Valuation  5.44
    • C.  Managing Quantity of Issued Points  5.45
    • D.  Financing Issues  5.46
  • VI.  SINGLE-SITE VERSUS MULTISITE TIME-SHARE SUBDIVISIONS  5.47
  • VII.  EXCHANGE PROGRAMS, INCIDENTAL BENEFITS, AND SHORT-TERM PRODUCTS  5.48
  • VIII.  KEY TIME-SHARE GOVERNING DOCUMENTS  5.49
    • A.  Declaration of Time-Share Plan  5.50
    • B.  Bylaws  5.51
    • C.  Rules and Regulations  5.52
    • D.  Conveyance of Time-Share Interests
      • 1.  Grant Deed  5.53
        • a.  Form: Legal Description for Time-Share Condominium Based on Eight Units on a Single Lot  5.54
        • b.  Form: Legal Description for Undivided Interest Time-Share Based on Eight Units on a Single Lot  5.55
      • 2.  Special Purpose Entity (SPE)  5.56
      • 3.  Converting to a Special Purpose Entity  5.56A
      • 4.  Trust  5.57
    • E.  Furniture, Fixtures, and Equipment  5.58
    • F.  Association Management Agreement  5.59
    • G.  Purchase and Sale Agreement and Escrow Instructions  5.60
    • H.  Subsidy Agreements  5.61
  • IX.  MODERN TIME-SHARE ISSUES
    • A.  Accounting  5.62
    • B.  Income Taxes  5.63
    • C.  Bankruptcy  5.64
    • D.  Features of a Time-Share Interest  5.65
    • E.  Trusts and Inheritances  5.66

6

Financing Sales of Units in Common Interest Developments

Helene Z. Fransz

  • I.  INTRODUCTION
    • A.  Scope of Chapter  6.1
    • B.  Lender Terminology  6.2
      • 1.  Project Categories  6.3
      • 2.  Types of Loans  6.4
      • 3.  Other Common Terms  6.5
    • C.  Financing Features of Common Interest Developments
      • 1.  Condominium Projects  6.6
      • 2.  Planned Developments  6.7
      • 3.  Other Common Interest Developments  6.8
  • II.  PROJECT LENDER REQUIREMENTS THAT AFFECT SALE AND FINANCING OF INDIVIDUAL UNITS
    • A.  Basic Considerations  6.9
    • B.  Specific Requirements and Procedures: Condominium Projects  6.10
    • C.  Planned Developments  6.11
  • III.  PERMANENT FINANCING FOR INDIVIDUAL UNITS
    • A.  Lender’s Security
      • 1.  Planned Developments  6.12
      • 2.  Condominiums  6.13
      • 3.  Stock Cooperatives and Community Apartment Projects  6.14
    • B.  Types of Individual Unit Lenders
      • 1.  Conventional Portfolio Lender  6.15
      • 2.  Conventional “Pass-Through” Lender  6.16
      • 3.  “Government” Lender  6.17
    • C.  Secondary Market Investors  6.18
  • IV.  LENDER AND SECONDARY MARKET STANDARD LOAN DOCUMENTS  6.19
    • A.  Conventional Lender’s Special Commitment Conditions  6.20
    • B.  Management Documents  6.21
      • 1.  Homeowners Association  6.22
      • 2.  Assessments  6.23
      • 3.  Insurance and Destruction  6.24
      • 4.  Condemnation  6.25
      • 5.  Term  6.26
      • 6.  Mortgagee Protection  6.27
      • 7.  Amendments  6.28
      • 8.  Annexation  6.29
    • C.  Requirements of Federal National Mortgage Association (FNMA or Fannie Mae)  6.30
      • 1.  Eligible and Ineligible Projects  6.31
      • 2.  Exceptions and Waivers  6.32
      • 3.  Mortgage Delivery and Recordkeeping  6.33
      • 4.  Limited Project Review Option  6.34
        • a.  Limited Review Requirements  6.35
        • b.  Additional Limited Review Requirements for Attached Condominiums  6.36
        • c.  CPM Expedited Review for Attached Condominiums [Deleted]  6.37
      • 5.  FHA-Approved Condominium Projects  6.38
      • 6.  Lender Full Review for Condominium Projects  6.39
        • a.  General Requirements for All Condominium Projects  6.40
        • b.  Additional Requirements for Attached Condominium Projects  6.41
        • c.  Additional Requirements for Condominium Projects of Two to Four Units  6.42
      • 7.  Fannie Mae PUD Project Classifications and Eligibility Requirements  6.43
      • 8.  Fannie Mae Cooperative Project Classifications and Eligibility Requirements  6.44
      • 9.  Environmental Hazard Assessments  6.45
        • a.  Phase 1 Assessments  6.46
        • b.  Phase 2 Assessments  6.47
      • 10.  Fannie Mae Legal Requirements  6.48
        • a.  Condominiums
          • (1)  Checklist: Condominium Legal Requirements  6.49
          • (2)  Waivers of Certain Legal Requirements  6.50
          • (3)  Low- and Moderate-Income Resale Restrictions  6.51
        • b.  Cooperatives  6.52
        • c.  Attorney Opinions  6.53
    • D.  Requirements of Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac)  6.54
      • 1.  Project Classifications  6.55
        • a.  New Condominium Projects  6.56
        • b.  Established Condominium Projects  6.57
        • c.  Detached Condominium Projects  6.58
        • d.  2- to 4-Unit Condominium Projects  6.59
        • e.  Condominium Projects with Live-Work Units  6.60
        • f.  Condominium Projects with Mixed Uses  6.61
      • 2.  Ineligible Projects  6.62
      • 3.  FHLMC Warranty Requirements
        • a.  Warranties for Planned Unit Developments  6.63
        • b.  Warranties for Condominiums
          • (1)  General Condominium Project Eligibility  6.64
          • (2)  Additional Warranties for New Condominium Projects  6.65
          • (3)  Warranties for Established Condominium Projects  6.66
          • (4)  Warranties for 2- to 4-Unit Condominium Projects  6.67
          • (5)  Warranties for Detached Condominium Projects  6.68
        • c.  Waiver of Warranties  6.69
      • 4.  Earthquake Insurance   6.70
        • a.  Coverage Requirement [Deleted]  6.71
        • b.  Deductible Prefunding Requirement; Waivers [Deleted]  6.72
        • c.  Alternative Insurance Coverage [Deleted]  6.73
    • E.  Federal Housing Administration (FHA) and Veterans Affairs (VA) Policies, Procedures, and Requirements
      • 1.  Availability of FHA and VA Financing  6.74
      • 2.  Planned Unit Developments  6.75
      • 3.  Reciprocity  6.76
      • 4.  FHA Requirements  6.77
        • a.  Attorney Certifications No Longer Required  6.78
        • b.  Lender Review and Certification Requirements  6.79
      • 5.  Form: Lender Certification  6.80
      • 6.  VA Requirements
        • a.  General Requirements  6.81
          • (1)  Construction Requirements  6.82
          • (2)  Presale Requirements  6.83
          • (3)  Professional Management; Property Tax Assessment  6.84
        • b.  Information Brochure  6.85
        • c.  Legal Documents for Condominium Associations
          • (1)  Articles of Incorporation  6.86
          • (2)  Bylaws  6.87
          • (3)  Declaration of Restrictions  6.88
        • d.  Attorney Opinions  6.89
  • V.  LENDERS’ TITLE INSURANCE REQUIREMENTS  6.90

7

Declaration of Covenants, Conditions, and Restrictions

Richard C. Smith

  • I.  INTRODUCTION  7.1
    • A.  Scope of Chapter  7.2
    • B.  Recordation; Equitable Servitudes  7.3
  • II.  INTRODUCTORY CLAUSES
    • A.  Form Provision: Initial Statement  7.4
    • B.  Recitals
      • 1.  Form Provision: Condominium Declaration  7.5
      • 2.  Form Provision: Planned Development Declaration  7.6
    • C.  Form Provision: Declarant’s Statement  7.7
  • III.  DEFINITIONS
    • A.  Importance  7.8
    • B.  Form Provision: “Annexation Area”  7.9
    • C.  Form Provision: “Architectural Committee”  7.10
    • D.  Form Provision: “Articles”  7.11
    • E.  Form Provision: “Association”  7.12
    • F.  Form Provision: “Association Rules”  7.13
    • G.  Form Provision: “Board of Directors”  7.14
    • H.  Form Provision: “Bylaws”  7.15
    • I.  Form Provision: “City/County”  7.16
    • J.  “Common Area” Provisions
      • 1.  Form Provision: Common Area in Single-Phase Condominium Projects  7.17
      • 2.  Form Provision: Common Area in Multiphase Condominium Projects  7.18
      • 3.  Form Provision: Common Area in Planned Developments  7.19
    • K.  Form Provision: “Common Area Maintenance Standards”  7.20
    • L.  Form Provision: “Common Walls”; “Common Roofs” (Planned Developments)  7.21
    • M.  Form Provision: “Condominium”  7.22
    • N.  Form Provision: “Condominium Plan”  7.23
    • O.  Form Provision: “Declarant”  7.24
    • P.  Form Provision: “Declaration”  7.25
    • Q.  “Development” Provisions
      • 1.  Form Provision: In Single-Phase Projects  7.26
      • 2.  Form Provision: In Multiphase Projects  7.27
    • R.  Form Provision: “Exclusive Use Common Area”  7.28
    • S.  Form Provision: “Governing Documents”  7.29
    • T.  Form Provision: “Lot” (Planned Development)  7.30
    • U.  Form Provision: “Member”  7.31
    • V.  Form Provision: “Mortgage” and “Mortgagee”  7.32
    • W.  Form Provision: “Owner”  7.33
    • X.  Form Provision: “Owner Maintenance Standards” (Condominium Project)  7.34
    • Y.  Form Provision: “Party Wall” (Planned Development)  7.35
    • Z.  Form Provision: “Phase” (Multiphase Condominium Project)  7.36
    • AA.  Form Provision: “Phase Common Area” (Multiphase Condominium Project)  7.37
    • AB.  Form Provision: “Property”  7.38
    • AC.  Form Provision: “Subdivision Map”  7.39
    • AD.  Form Provision: “Supplement” (Multiphase Condominium Project)  7.40
    • AE.  Form Provision: “Unit” (Condominium Project)  7.41
  • IV.  CLAUSES DESCRIBING COMMON INTERESTS, PROPERTY RIGHTS, RIGHTS OF ENJOYMENT, AND EASEMENTS
    • A.  Form Provision: Ownership of Condominium (Condominium Project)  7.42
    • B.  Nonexclusive Rights Provisions
      • 1.  Form Provision: Owners’ Nonexclusive Easements and Rights; Association Rights  7.43
      • 2.  Form Provision: Entry or Use Rights  7.44
    • C.  Exclusive Use Rights; Exclusive Use Common Areas
      • 1.  Approaches to Drafting  7.45
      • 2.  Examples: Provisions for Parking Spaces, Patio Areas, and Other Exclusive Use Common Areas  7.46
        • a.  Form Provision: Parking Spaces  7.47
        • b.  Form Provision: Driveways and Walkways  7.48
        • c.  Form Provision: Patios or Balconies  7.49
        • d.  Form Provision: Backyard Areas (Condominium Project)  7.50
    • D.  Provisions Addressing Minor Encroachments
      • 1.  Form Provision: Minor Encroachments (Condominium Project)  7.51
      • 2.  Form Provision: Minor Encroachments (Planned Development)  7.52
      • 3.  Form Provision: Right of Association to Make Common Area Boundary Line Adjustments (Specialized Provision—Golf Course)  7.53
    • E.  Owner and Third Party Easements Granted by Declarant or by Association
      • 1.  Right to Grant Easements  7.54
      • 2.  Provisions Granting Particular Easements
        • a.  Form Provision: Authority Over Common Area  7.55
        • b.  Form Provision: Emergency Access and Right-of-Way  7.56
        • c.  Form Provision: Common Wall, Common Roof, Party Wall Easements (Planned Development)  7.57
        • d.  Form Provision: Retention Basin Easement (Planned Development)  7.58
        • e.  Form Provision: Drainage Easements (Planned Development)  7.59
        • f.  Form Provision: Rain Gutter and Downspout Easements (Planned Development)  7.60
        • g.  Form Provision: Retaining Wall Easement (Planned Development)  7.61
        • h.  Form Provision: Other Easements (Planned Development)  7.62
        • i.  Form Provision: Association Easement for Performance of Duties  7.63
    • F.  Owner’s Rights to Delegate Use and Enjoyment
      • 1.  Tenants; Contract Purchasers  7.64
        • a.  Nonresident Owners’ Use of Recreational Facilities  7.65
        • b.  Action Against Defaulting Tenant or Contract Purchase  7.66
      • 2.  Form Provision: Provisions Restricting Delegation of Use  7.67
  • V.  COVENANTS, CONDITIONS, AND USE RESTRICTIONS
    • A.  Purpose and Enforceability  7.68
      • 1.  CC §5975 Reasonableness Test  7.69
      • 2.  Availability of Waiver or Estoppel  7.70
    • B.  Provisions Establishing Particular Covenants, Conditions, and Restrictions
      • 1.  Form Provision: Residential Use  7.71
      • 2.  Form Provision: Leasing and Transient Occupancy  7.72
      • 3.  Form Provision: Restricted Access (Specialized Provision—Golf Course)  7.73
      • 4.  Maintenance
        • a.  Owner Responsibility in Condominium Project  7.74
          • (1)  Form Provision: Utilities, Equipment, Systems, and Fixtures  7.75
          • (2)  Form Provision: Structural Alterations and Improvements  7.76
          • (3)  Form Provision: Repair, Replacement, Reconstruction of Appliances, Fixtures, Equipment, or Interior Improvements  7.77
          • (4)  Form Provision: Interior of Unit  7.78
        • b.  Form Provision: Owner Responsibility (Planned Development)  7.79
        • c.  Form Provision: Required Landscaping of Yard Areas; Owners’ Maintenance Obligations  7.80
        • d.  Form Provision: Association Maintenance  7.81
        • e.  Form Provision: Common Area  7.82
        • f.  Form Provision: Oil Drilling  7.83
        • g.  Form Provision: Offensive Conduct; Nuisance  7.84
      • 5.  Provisions on Motor Vehicles, Parking, and Garages
        • a.  Form Provision: In General  7.85
        • b.  Form Provision: Vehicle Definitions  7.86
        • c.  Form Provision: Parking  7.87
        • d.  Form Provision: Use of Garages and Assigned Parking Spaces  7.88
        • e.  Form Provision: Repairs  7.89
        • f.  Form Provision: Guest Parking Spaces  7.90
        • g.  Form Provision: Use by Declarant  7.91
      • 6.  Form Provision: Signs  7.92
      • 7.  Form Provision: Antennas and External Fixtures  7.93
        • a.  State Regulation  7.94
        • b.  Federal Regulation  7.95
      • 8.  Form Provision: Gas or Liquid Storage  7.96
      • 9.  Form Provision: Plant Diseases and Insects  7.97
      • 10.  Form Provision: Animals  7.98
      • 11.  Form Provision: Trash Disposal  7.99
      • 12.  Form Provision: Outside Laundering and Drying  7.100
      • 13.  Form Provision: Common Area Trees  7.101
      • 14.  Form Provision: Division of Lots (Planned Development)  7.102
      • 15.  Form Provision: Compliance With Law and Association’s Insurance Requirements  7.103
      • 16.  Owner’s Obligation for Taxes
        • a.  Segregated Real Property Taxes  7.104
        • b.  Form Provision: Unsegregated Real Property Taxes  7.105
    • C.  Form Provision: Exceptions  7.106
    • D.  Senior Citizen Housing Restrictions  7.107
      • 1.  State Law
        • a.  Accommodatory Design and Use Requirements  7.108
        • b.  Senior Citizen Resident Requirement  7.109
        • c.  Other Qualified Residents  7.110
        • d.  Temporary Residents  7.111
      • 2.  Federal Law—Age Restrictions  7.112
        • a.  Age Exemptions  7.113
        • b.  Preemption of State Law  7.114
      • 3.  Form Provision: Senior Citizen Development Declaration Provisions  7.115
    • E.  Form Provision: Savings Clause—Future Construction  7.116
    • F.  Form Provision: Indemnification for Negligence or Misconduct  7.117
    • G.  Form Provision: Enforcement by Suit  7.118
  • VI.  POWERS AND DUTIES OF ASSOCIATION
    • A.  Powers
      • 1.  General Statement of Powers  7.119
      • 2.  Form Provision: Assessment Rights  7.120
      • 3.  Form Provision: Recorded Statement of Information on Association  7.121
      • 4.  Form Provision: Right to Delegate Powers and Duties; Professional Management; Requirements Applicable to Professional Managing Agent  7.122
      • 5.  Form Provision: Association Contracts  7.123
      • 6.  Form Provision: Establishing Rules Regulating Use of Common Area  7.124
      • 7.  Association’s Enforcement Powers  7.125
        • a.  Requirements for Levying Monetary Penalties  7.126
        • b.  Disciplining Members  7.127
        • c.  Attorney Fees  7.128
        • d.  Form Provision: Right of Enforcement  7.129
      • 8.  Notices Regarding Litigation with Declarant or Other Builders
        • a.  Form Provision: Notice to Owners  7.130
        • b.  Form Provision: Notice to Builders  7.131
    • B.  Form Provision: Duties  7.132
      • 1.  Management and Maintenance  7.133
        • a.  Form Provision: Maintenance, Repair, and Management of Common Area  7.134
        • b.  Form Provision: Allocation of Costs of Common Area Maintenance  7.135
        • c.  Form Provision: Repair of Common Area Damaged by Wood-Destroying Pests or Organisms  7.136
        • d.  Form Provision: Central Air Conditioning and Heating Systems  7.137
        • e.  Form Provision: Landscaping and Exteriors  7.138
        • f.  Form Provision: Fences Surrounding Patio Areas  7.139
        • g.  Form Provision: Personal Property  7.140
      • 2.  Form Provision: Contracting for Goods and Services  7.141
      • 3.  Form Provision: Payment of Taxes and Assessments  7.142
      • 4.  Form Provision: Furnishing Water and Other Utilities  7.143
      • 5.  Form Provision: Budgets and Financial Reporting  7.144
      • 6.  Form Provision: Securing Insurance Coverage  7.145
      • 7.  Bonded Obligations
        • a.  Form Provision: Enforcement of Bonded Obligations  7.146
        • b.  Form Provision: Exoneration of Bonds  7.147
      • 8.  Form Provision: Other Duties  7.148
  • VII.  LIMITATIONS ON POWERS AND LIABILITY OF BOARD OR ASSOCIATION
    • A.  Form Provision: Limitations on Powers of Board or Association  7.149
    • B.  Limitations on Personal Liability
      • 1.  Form Provision: Exculpatory Provisions Applicable to Directors, Officers, and Other Association Representatives  7.150
      • 2.  Form Provision: Common Area Liability  7.151
      • 3.  Form Provision: No Effect on Liability of Association  7.152
  • VIII.  ORGANIZATION OF ASSOCIATION
    • A.  Form Provision: Meetings of Owners; Specially Elected Director  7.153
    • B.  Form Provision: Association’s Access to Association Books and Records  7.154
  • IX.  ACCESS RIGHTS TO ASSOCIATION BOOKS, RECORDS, AND MINUTES
    • A.  Form Provision: Access to Copies of Governing Documents and Financial Statements  7.155
    • B.  Form Provision: Inspection Rights of Owners  7.156
    • C.  Form Provision: Inspection Procedure  7.157
    • D.  Form Provision: Directors’ Inspection Rights  7.158
    • E.  Form Provision: Owners’ Access to Minutes  7.159
  • X.  MEMBERSHIP AND VOTING RIGHTS  7.160
    • A.  Membership
      • 1.  Form Provision: Qualifications  7.161
      • 2.  Form Provision: Members’ Rights and Duties  7.162
      • 3.  Form Provision: Transfer of Membership  7.163
    • B.  Voting Rights
      • 1.  Form Provision: Majority Approval Required  7.164
      • 2.  Two-Class Voting Systems
        • a.  Weighted Versus Equal Votes  7.165
        • b.  Provisions Classifying Voters and Quantifying Votes
          • (1)  Form Provision: Two-Class System: Weighted Votes  7.166
          • (2)  Form Provision: Two-Class System: Equal Votes  7.167
      • 3.  Form Provision: Joint Ownership Votes  7.168
      • 4.  Form Provision: Cumulative Voting  7.169
      • 5.  Form Provision: Voting Procedures  7.170
      • 6.  Form Provision: Commencement of Voting Rights  7.171
  • XI.  ASSESSMENTS; BUDGET; RESERVES
    • A.  Requirement that Association Levy Assessments  7.172
      • 1.  Types of Assessments: Regular and Special  7.173
      • 2.  Assessment Subsidization Agreements  7.174
      • 3.  Form Provision: Agreement to Pay Assessments  7.175
      • 4.  Form Provision: Agreement to Contribute to Working Capital Reserves  7.176
      • 5.  Form Provision: Declarant’s Limited Exemption From Assessment During Construction  7.177
      • 6.  Form Provision: Assessments as Personal Obligation of Owner  7.178
      • 7.  Form Provision: Use of Assessments  7.179
    • B.  Budget; Establishing Assessments  7.180
      • 1.  Form Provision: Annual Budget Report  7.181
      • 2.  Form Provision: Establishing Regular Assessments  7.182
      • 3.  Form Provision: Distribution of Budget Report and Statement of Policies  7.183
    • C.  Reserves  7.184
      • 1.  Form Provision: Accounting Treatment  7.185
      • 2.  Form Provision: Limitations on Use of Reserves and on Assigning or Pledging Assessment Obligations  7.186
    • D.  Special Assessments
      • 1.  Form Provision: Determination of Amount  7.187
      • 2.  Form Provision: Limitations  7.188
    • E.  Allocation of Assessments; Assessment Periods
      • 1.  Form Provision: Uniform Rate of Assessment for Regular and Special Assessments  7.189
      • 2.  Form Provision: Association Fiscal Year; Notice and Assessment Installment Due Dates  7.190
    • F.  Enforcement of Assessments
      • 1.  Enforcement of Assessment Liens  7.191
      • 2.  Form Provision: Delinquent Assessments  7.192
      • 3.  Form Provision: Collection and Enforcement  7.193
      • 4.  Form Provision: Notice to Owner  7.194
      • 5.  Form Provision: Creation of Lien  7.195
      • 6.  Form Provision: Alternative Dispute Resolution  7.196
      • 7.  Form Provision: Foreclosure  7.197
      • 8.  Form Provision: Waiver of Homestead Protections  7.198
  • XII.  FINANCIAL REPORTS
    • A.  Form Provision: Annual Report  7.199
    • B.  Form Provision: Monthly Reviews  7.200
    • C.  Form Provision: Reserve Account Study and Review  7.201
    • D.  Form Provision: Mortgagee’s Right to Request Audited Financial Statements  7.202
  • XIII.  INSURANCE
    • A.  Insurance Requirements  7.203
    • B.  Insurance for Condominiums  7.204
    • C.  Planned Developments  7.205
    • D.  Form Insurance Provisions
      • 1.  Form Provision: Liability Insurance  7.206
      • 2.  Property Insurance
        • a.  Association Blanket Coverage Insurance
          • (1)  Form Provision: Fire and Related Perils Insurance  7.207
          • (2)  Form Provision: Earthquake Damage Insurance  7.208
          • (3)  Form Provision: Flood and Other Insurance; Fidelity Bonds  7.209
          • (4)  Form Provision: Provision Appointing Trustee  7.210
          • (5)  Alternative and Optional Insurance Provisions  7.211
        • b.  Individual Fire Insurance Provisions
          • (1)  Form Provision: Individual Fire Insurance Limited: Condominium Projects  7.212
          • (2)  Form Provision: Individual Fire Insurance Required: Planned Developments  7.213
          • (3)  Form Provision: Individual Fire Insurance Limited: Planned Developments  7.214
      • 3.  Form Provision: Provision to Adjust Losses  7.215
      • 4.  Form Provision: Distribution to Mortgagees  7.216
      • 5.  Form Provision: Director and Officer Liability Insurance  7.217
      • 6.  Form Provision: Owner’s Liability Insurance  7.218
      • 7.  Form Provision: Summary of Insurance  7.219
      • 8.  Form Provision: Notice of Changes  7.220
    • E.  Form Provision: Assumption of Risk of Injury or Property Damage (Specialized Provision—Golf Course)  7.221
  • XIV.  DAMAGE OR DESTRUCTION OF IMPROVEMENTS
    • A.  Department of Real Estate Regulations  7.222
    • B.  Partition of Condominium Projects  7.223
    • C.  Single-Structure Condominium Project  7.224
    • D.  Planned Development Projects (With and Without Blanket Insurance)  7.225
    • E.  Destruction in Multistructure Condominiums and Planned Developments  7.226
    • F.  Summary of Form Provisions  7.227
      • 1.  Form Provision: Destruction: Proceeds Exceed 85 Percent of Reconstruction Costs  7.228
      • 2.  Form Provision: Destruction: Proceeds Less Than 85 Percent of Reconstruction Costs  7.229
      • 3.  Form Provision: Recordation of Certificate of Intention to Rebuild [Deleted]  7.230
      • 4.  Form Provision: Repair or Reconstruction Assessment (Condominium Project)  7.231
      • 5.  Form Provision: Repair or Reconstruction Assessment (Planned Development)  7.232
      • 6.  Form Provision: Repair or Reconstruction Contract  7.233
      • 7.  Form Provision: Repair, Replacement, and Reconstruction of Appliances, Fixtures, Equipment, or Interior Improvements (Condominium Project or Planned Development With Blanket Insurance)  7.234
      • 8.  Form Provision: Availability of Insurance Proceeds  7.235
      • 9.  Form Provision: Repair or Reconstruction by Owner Affecting Structure  7.236
      • 10.  Form Provision: Alteration of Unit Boundaries (Condominium Project)  7.237
      • 11.  Form Provision: Minor Repair and Reconstruction  7.238
      • 12.  Election Not to Rebuild
        • a.  Use and Disposition of Insurance Proceeds in Condominiums
          • (1)  Form Provision: Purchase of Condominiums With Uninhabitable Units Authorized  7.239
          • (2)  Form Provision: Rebuilding and Purchase of Condominiums Not Authorized  7.240
        • b.  Form Provision: Use and Disposition of Insurance Proceeds (Planned Development)  7.241
      • 13.  Form Provision: Fair Market Value as Appraisal Standard  7.242
    • G.  Form Provision: Destruction (Single-Structure Project)  7.243
  • XV.  CONDEMNATION
    • A.  Procedures in Condemnation in Condominium Project  7.244
      • 1.  Form Provision: Sale by Unanimous Consent or Taking (Condominium Project)  7.245
      • 2.  Form Provision: Revival of Right to Partition (Condominium Project)  7.246
      • 3.  Form Provision: Total Sale or Taking or Partial Taking Followed by Partition (Condominium Project)  7.247
      • 4.  Form Provision: Partial Sale or Taking Without Partition (Condominium Project)  7.248
      • 5.  Form Provision: Fair Market Value as Appraisal Standard (Condominium Project)  7.249
    • B.  Procedures in Condemnation in Planned Developments
      • 1.  Form Provision: Sale by Consent  7.250
      • 2.  Form Provision: Distribution of Sale Proceeds or Condemnation Award  7.251
  • XVI.  PARTITION OF CONDOMINIUM PROJECTS
    • A.  Circumstances Warranting Partition of Common Area  7.252
    • B.  Provisions Relating to Partition of Common Area
      • 1.  Form Provision: Suspension  7.253
      • 2.  Form Provision: Distribution of Proceeds  7.254
      • 3.  Form Provision: Power of Attorney  7.255
    • C.  Nonseverability of Component Interests in Condominium
      • 1.  Form Provision: Provision to Prohibit Severance  7.256
      • 2.  Form Provision: Conveyance Includes All Interests  7.257
  • XVII.  PROTECTION OF MORTGAGEES
    • A.  Institutional and Secondary Market Lender Requirements  7.258
    • B.  Provisions to Satisfy Lender Requirements
      • 1.  Form Provision: Mortgage Permitted  7.259
      • 2.  Form Provision: Subordination  7.260
      • 3.  Form Provision: Mortgagee Consent to Amendment of Project Documents or Other Actions (Attached Condominiums)  7.261
      • 4.  Mortgagee Consent Required Only for Project Document Amendments That Are Materially Adverse to First Mortgagees  7.262
      • 5.  Form Provision: Mortgagee’s Right to Examine Books and Records  7.263
      • 6.  Form Provision: Priority in Distribution of Insurance and Condemnation Proceeds  7.264
      • 7.  Form Provision: Status of Amenities [Deleted]  7.265
      • 8.  Form Provision: Notice Requirements  7.266
      • 9.  Form Provision: Payments by Mortgagees  7.267
      • 10.  Effect of Breach of Declaration on Mortgagee
        • a.  Form Provision: Lien Not Invalidated  7.268
        • b.  Form Provision: Mortgagee Need Not Cure Breach  7.269
      • 11.  Form Provision: Status of Loan to Facilitate Resale  7.270
      • 12.  Form Provision: Right to Appear at Meetings  7.271
      • 13.  Form Provision: Right to Furnish Information  7.272
      • 14.  Form Provision: Right of First Refusal Inapplicable to Mortgagee  7.273
      • 15.  Form Provision: Limitation on Term of Management Contract  7.274
      • 16.  Form Provision: Mortgagee Protections Control If Conflict With Other Provisions  7.275
    • C.  Federal Housing Administration Requirements  7.276
    • D.  Veterans Affairs Requirements  7.277
  • XVIII.  ARCHITECTURAL CONTROL  7.278
    • A.  Form Provision: Provision for Architectural Approvals  7.279
    • B.  Form Provision: Appointment of Architectural Committee  7.280
  • XIX.  TERM OF DECLARATION
    • A.  Fixed Term  7.281
      • 1.  Rule Against Perpetuities  7.282
      • 2.  Restraint on Alienation  7.283
      • 3.  Extending Fixed Term  7.284
    • B.  Term Provisions
      • 1.  Form Provision: No Fixed Term  7.285
      • 2.  Form Provision: Fixed Term  7.286
  • XX.  AMENDMENT OF DECLARATION
    • A.  Form Amendment Provisions
      • 1.  Form Provision: Amendment Before Close of First Sale  7.287
      • 2.  Form Provision: Amendment After Close of First Sale  7.288
      • 3.  Form Provision: Compliance With Bus & P C §11018.7  7.289
      • 4.  Form Provision: Amendments to Conform With Mortgagee Requirements  7.290
      • 5.  Form Provision: Amendment to Delete Construction or Marketing Provisions After Completion by Declarant  7.291
    • B.  Amendment by Court Order  7.292
  • XXI.  CONSTRUCTION OF ADDITIONAL IMPROVEMENTS AND ANNEXATION OF ADDITIONAL PROPERTY IN MULTIPHASE CONDOMINIUM PROJECT
    • A.  Construction of Additional Improvements
      • 1.  Form Provision: Right to Construct Additional Improvements  7.293
      • 2.  Form Provision: Easements  7.294
      • 3.  Form Provision: Owner and Association Cooperation  7.295
      • 4.  Form Provision: Liability Insurance  7.296
      • 5.  Form Provision: Condominium Plans  7.297
      • 6.  Form Provision: Real Property Taxes  7.298
    • B.  Annexation
      • 1.  Form Provision: Right to Annex Additional Phases  7.299
      • 2.  Form Provision: Recording of Supplement  7.300
      • 3.  Form Provision: Effect of Annexation  7.301
    • C.  Form Provision: Commencement of Assessments  7.302
    • D.  Form Provision: Payment of Reserves on Annexation of Lots or Condominiums Held for Rental  7.303
    • E.  Form Provision: Reservation of Easements and Rights of Use  7.304
    • F.  Form Provision: Annexation Other Than Under Plan of Annexation  7.305
  • XXII.  ALTERNATIVE DISPUTE RESOLUTION
    • A.  Procedures  7.306
    • B.  Form Provision: Facing Page Notice  7.307
  • XXIII.  GENERAL PROVISIONS  7.308
    • A.  Form Provision: Headings  7.309
    • B.  Form Provision: Severability of Provisions  7.310
    • C.  Form Provision: Cumulative Remedies  7.311
    • D.  Form Provision: Violations as Nuisance  7.312
    • E.  Form Provision: No Discriminatory Restrictions  7.313
    • F.  Form Provision: Power of Attorney  7.314
    • G.  Form Provision: Liberal Construction  7.315
    • H.  Form Provision: Notification of Sale; Notices  7.316
    • I.  Form Provision: Delivery of Notice by Association  7.317
    • J.  Form Provision: Number; Gender  7.318
    • K.  Form Provision: Incorporation of Exhibits  7.319
    • L.  Form Provision: Easements Reserved and Granted  7.320
    • M.  Form Provision: Binding Effect  7.321

8

The Transition Period: Forming the Association, Transferring Control to Homeowners, and Addressing Construction Defects (SB 800)

Jeffrey G. Wagner

  • I.  SCOPE OF CHAPTER  8.1
  • II.  FORMATION OF ASSOCIATION
    • A.  Preincorporation Steps
      • 1.  Incorporated or Unincorporated Association  8.2
      • 2.  Reserving Corporate Name  8.3
      • 3.  Filing Articles of Incorporation  8.4
    • B.  Postincorporation Steps
      • 1.  Naming Initial Directors and Officers  8.5
      • 2.  Filing for Federal Tax Identification Number  8.6
      • 3.  Filing for Franchise Tax Board Homeowners Association Exemption (FTB 3500)  8.7
      • 4.  Filing Statement of Information (Form SI-100)  8.8
      • 5.  Filing Statement by Common Interest Development (Form SI-CID)  8.9
  • III.  COMMENCEMENT OF ASSOCIATION OPERATIONS
    • A.  Commencement Date  8.10
    • B.  Procurement of Insurance and Transfer of Contracts  8.11
    • C.  Commencement of Assessments  8.12
      • 1.  Opening Bank Accounts  8.13
      • 2.  Subsidizing Assessments  8.14
        • a.  Cash Subsidies  8.15
        • b.  Maintenance Subsidies  8.16
        • c.  DRE Approval of Subsidies; Posting Collateral  8.17
      • 3.  Assessment Exemptions  8.18
      • 4.  Transfer of Common Area Facilities  8.19
      • 5.  Selection of Initial Property Manager  8.20
  • IV.  CONTROL OF ASSOCIATION  8.21
    • A.  Methods of Control
      • 1.  Class Memberships  8.22
        • a.  Single-Phase Projects  8.23
        • b.  Multiphase Projects  8.24
      • 2.  Architectural Committee Control  8.25
    • B.  Factors to Consider in Retaining Control
      • 1.  Fiduciary Duties and Conflicts of Interest  8.26
        • a.  Judicial Scrutiny of Developer-Controlled Boards  8.27
        • b.  Length of Developer’s Control  8.28
      • 2.  Early Relinquishment of Control  8.29
      • 3.  Notice of Delinquent Assessments  8.29A
  • V.  CONSTRUCTION DEFECT CLAIMS AND BUILDER’S RIGHT TO REPAIR LAW (SB 800)
    • A.  Overview  8.30
    • B.  Functionality Standards  8.31
      • 1.  The Aas Case and Property Damage  8.32
      • 2.  Time Periods to File a Claim  8.33
        • a.  Impact on Builders Control of Association Board of Directors  8.34
        • b.  Tolling of Statute of Limitation  8.35
    • C.  Enhanced Protection Agreements  8.36
    • D.  Builder Definition and Liability  8.37
    • E.  Contractor, Supplier, Manufacturer, and Design Professional Liability  8.38
    • F.  Limited Fit and Finish Warranty  8.39
    • G.  Manufactured Product Exemption  8.40
    • H.  Nonadversarial Prelitigation Procedures  8.41
      • 1.  Notice of Claim  8.42
      • 2.  Inspection Rights  8.43
      • 3.  Document Production  8.44
      • 4.  Builder’s Offer to Repair Procedure
        • a.  Builder Makes Written Repair Offer  8.45
        • b.  Homeowner Authorizes Repair or Requests Alternative Contractors  8.46
        • c.  Builder’s Offer to Mediate; Mediation Procedures  8.47
        • d.  Builder’s Right to Repair  8.48
        • e.  Builder’s Failure to Repair or to Comply With Procedures; Homeowner’s Rights  8.49
      • 5.  Prohibition Against Release and Waiver  8.50
      • 6.  Relationship With Calderon Process (CC §6000)  8.51
    • I.  Alternative Prelitigation Procedure  8.52
    • J.  Binding Adversarial Procedures  8.53
      • 1.  Enforceability of Binding Adversarial Procedures  8.54
        • a.  Supreme Court Decision in Pinnacle Museum Tower Ass’n  8.54A
        • b.  Appellate Cases Decided Before Pinnacle Museum Tower Ass’n  8.54B
      • 2.  Applicability of Alternative Dispute Resolution Procedures to Subsequent Buyers  8.55
      • 3.  Form Provision: Transfer Builder’s Right to Repair Law Claim Authority to Nondeveloper Board Members  8.56
      • 4.  Form Provision: Claims Procedure Exhibit to Declaration  8.57
    • K.  Exclusive Remedy  8.58
    • L.  Recoverable Damages  8.59
    • M.  Affirmative Defenses  8.60
    • N.  Maintenance Recommendations  8.61
    • O.  Document Retention and Retrieval  8.62
    • P.  Summary of Builder’s Right to Repair Law’s Recording and Notice Requirements  8.63

9

Commercial and Mixed-Use Common Interest Developments

F. Scott Jackson

  • I.  SCOPE OF CHAPTER  9.1
  • II.  APPLICABLE LAWS
    • A.  Subdivision Map Act  9.2
    • B.  Local Zoning Ordinances  9.3
    • C.  Governance Under Commercial and Industrial Common Interest Development Act  9.4
    • D.  Strategic Considerations in Structuring a Commercial Project as a Common Interest Subdivision Subject to Commercial CID Act  9.4A
    • E.  Subdivided Lands Law  9.5
    • F.  Interstate Land Sales Full Disclosure Act [Deleted]  9.6
  • III.  DRAFTING THE GOVERNING DOCUMENTS
    • A.  Customizing Documents  9.7
    • B.  How to Describe Separate Interests  9.8
      • 1.  Fixed-Unit Approach (Condominiums)  9.9
      • 2.  Flexible-Unit Approach (Condominiums)  9.10
    • C.  The Hallway Dilemma  9.11
      • 1.  Convertible Association Property  9.12
      • 2.  Conveyance to Owners  9.13
    • D.  Condominium Plan Amendments  9.14
    • E.  Drafting Tips for Declaration and Bylaws  9.15
      • 1.  General Considerations  9.16
      • 2.  Mechanical Drafting Tips  9.17
        • a.  Review of Plans; Common Area Responsibilities  9.18
        • b.  Timing for Recordation of Declaration  9.19
        • c.  Registration of Project Name  9.20
      • 3.  Parking Restrictions  9.21
      • 4.  Use Restrictions  9.22
      • 5.  Control of the Association  9.23
      • 6.  Architectural and Construction Controls  9.24
      • 7.  Assessments
        • a.  Annual Assessments; Common Area Maintenance Charges (CAMs)  9.25
        • b.  Special Assessments  9.26
        • c.  Special Benefit Areas  9.26A
      • 8.  Quorum and Amendment Requirements  9.27
      • 9.  Board of Directors
        • a.  Number of Directors  9.28
        • b.  Terms of Office  9.29
        • c.  Proportionate Representation  9.30
        • d.  Representative Members  9.31
        • e.  Alternate Directors  9.32
    • F.  Dispute Resolution  9.32A
      • 1.  Alternative Dispute Resolution Procedures  9.32B
      • 2.  Notice of Actions Against Common Interest Development Builders and Developers  9.32C
  • IV.  PURCHASE AND SALE AGREEMENT
    • A.  General Considerations  9.33
    • B.  Interior Improvements  9.34
    • C.  Avoiding Misrepresentations  9.35
    • D.  Business of Occupants  9.36
  • V.  MIXED-USE DEVELOPMENTS  9.37
    • A.  Governance Structures  9.38
    • B.  Users’ Conflicting Interests  9.39
    • C.  Users’ Shared Interests  9.40
    • D.  Disclosure Statement  9.41
    • E.  Condominium Plan Amendments in Mixed-Use Projects  9.42
  • VI.  TAX CONSIDERATIONS AS NONPROFIT CORPORATION  9.43

10

Master Planned Communities

Helene Z. Fransz

  • I.  UNIQUENESS OF MASTER PLANNED COMMUNITIES  10.1
  • II.  TERMINOLOGY  10.2
    • A.  Statutory Terms  10.3
      • 1.  Terms Distinguishing Master Community From Smaller Elements
        • a.  Association; Sub-association  10.4
        • b.  Common Area  10.5
        • c.  Covered Property; Neighborhood  10.6
        • d.  Developer or Master Declarant; Builder  10.7
        • e.  Declaration  10.8
        • f.  Governing Documents  10.9
        • g.  Rules and Regulations; Community Guidelines  10.10
        • h.  Separate Interest  10.11
      • 2.  Terms That Apply to Both Master Community and Smaller Elements  10.12
    • B.  Additional Terms  10.13
      • 1.  Terms Distinguishing Master Community From Smaller Elements
        • a.  Assessments  10.14
        • b.  Aesthetic or Architectural Review Committees  10.15
        • c.  Design Standards  10.16
        • d.  Master Maintenance Guidelines  10.17
      • 2.  Terms That Apply Only to Master Community
        • a.  Cost Center  10.18
        • b.  Delegate; Neighborhood Representative  10.19
        • c.  Development Declaration  10.20
  • III.  APPLICABLE LAW  10.21
  • IV.  DEPARTMENT OF REAL ESTATE (DRE) REQUIREMENTS  10.22
    • A.  Master Planned Community Qualifications  10.23
    • B.  Master Association Governance  10.24
      • 1.  Class B Vote  10.25
      • 2.  Delegate Voting  10.26
      • 3.  Membership Meeting Quorum  10.27
      • 4.  Class C Vote and Election of Directors  10.28
    • C.  Architectural Control  10.29
    • D.  Additional Associations  10.30
    • E.  Sale or Lease Purchase of Common Areas  10.31
    • F.  Other Arrangements  10.32
  • V.  PERMANENT FINANCING FOR INDIVIDUAL UNITS  10.33
    • A.  Requirements of Federal National Mortgage Association (Fannie Mae)  10.34
      • 1.  Planned Unit Development Units  10.35
      • 2.  Condominiums  10.36
      • 3.  Stock Cooperatives  10.37
    • B.  Requirements of Federal Home Loan Mortgage Corporation (Freddie Mac)  10.38
      • 1.  Warranties  10.39
      • 2.  Condominiums  10.40
    • C.  Federal Housing Administration (FHA)  10.41
    • D.  Veterans Affairs Policies, Procedures, and Requirements  10.42
  • VI.  PLANNING  10.43
    • A.  Managing Development
      • 1.  Land Use  10.44
      • 2.  Builder Management  10.45
        • a.  Purchase Agreement  10.46
        • b.  Grant Deed to Builder  10.47
        • c.  Development Declaration  10.48
        • d.  Architectural/Design Standards for Builders  10.49
        • e.  Subdivision Marketing and Sales Documents; Templates  10.50
        • f.  Due Diligence Documents  10.51
      • 3.  Master Association Financial Issues  10.52
        • a.  Budgets  10.53
          • (1)  Standard-Format Budget  10.54
          • (2)  Range-of-Assessment Budget  10.55
          • (3)  Level-Assessment Procedure  10.56
          • (4)  Large-Increment Budget  10.57
        • b.  Allocation of Expenses  10.58
          • (1)  Cost Centers  10.59
          • (2)  Apartments  10.60
          • (3)  Special Allocation of an Assessment Component  10.61
          • (4)  Sub-associations  10.62
        • c.  Revenue Sources  10.63
      • 4.  DRE Considerations  10.64
    • B.  Community Governance  10.65
      • 1.  Relationship Between Different Areas of the Community
        • a.  Commercial and Residential Areas  10.66
        • b.  Master Association and Sub-associations  10.67
          • (1)  Master Association Versus Sub-association Rights and Obligations  10.68
          • (2)  Compliance With Lender Requirements  10.69
          • (3)  Sub-associations Versus Cost Centers  10.70
      • 2.  Master Association Governance Structure  10.71
        • a.  Use of Community Delegate Voting  10.72
        • b.  Elements of a Delegate Voting System  10.73
  • VII.  ONGOING MANAGEMENT DURING DEVELOPER CONTROL PERIOD  10.74
    • A.  Subdivision Documentation  10.75
    • B.  Common Area Conveyances and Acceptances  10.76
    • C.  Master Disclosure Statements and Other Buyer Documents  10.77
    • D.  Renewals of Agreements and Bonds  10.78
    • E.  Importance of Following Proper Procedures for Master Association Operation  10.79

FORMING CALIFORNIA COMMON INTEREST DEVELOPMENTS

(1st Edition)

January 2019

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH02

Chapter 2

Subdivision Map Act and Condominium Plans

02-014

§2.14

Govt C §66459 Notice to Tenants

CH03

Chapter 3

State Regulation of Common Interest Subdivision Sales

03-157

§3.157

Checklist: Condominiums, Planned Developments, Community Apartment Projects, and Undivided Interest Subdivisions

03-158

§3.158

Checklist: Stock Cooperatives and Limited Equity Housing Developments

03-159

§3.159

Checklist: Standard Subdivisions

CH04

Chapter 4

Condominium Conversions

04-005

§4.5

Checklist: Analyzing Whether Conversion Has Vested

04-020

§4.20

Checklist: Procedures for Conversion

04-032

§4.32

180-Day Notice of Intent to Convert

04-033

§4.33

Notice of Final Map Approval

04-035

§4.35

Notice of Application for Public Report

04-036

§4.36

90-Day Notice of Exclusive Right to Purchase

04-038

§4.38

Waiver of Right to Purchase

04-051

§4.51

Prospective Tenant Notices

04-056A

§4.56A

Request for Exemption From Separate Assessment

04-062

§4.62

Govt C §66459 Notice to Tenants

CH05

Chapter 5

Time-Share Plans

05-054

§5.54

Legal Description for Time-Share Condominium Based on Eight Units on a Single Lot

05-055

§5.55

Legal Description for Undivided Interest Time-Share Based on Eight Units on a Single Lot

CH06

Chapter 6

Financing Sales of Units in Common Interest Developments

06-049

§6.49

Checklist: Condominium Legal Requirements

06-080

§6.80

Lender Certification

CH07

Chapter 7

Declaration of Covenants, Conditions, and Restrictions

07-004

§7.4

Form Provision: Initial Statement

07-005

§7.5

Form Provision: Condominium Declaration

07-006

§7.6

Form Provision: Planned Development Declaration

07-007

§7.7

Form Provision: Declarant’s Statement

07-009

§7.9

Form Provision: “Annexation Area”

07-010

§7.10

Form Provision: “Architectural Committee”

07-011

§7.11

Form Provision: “Articles”

07-012

§7.12

Form Provision: “Association”

07-013

§7.13

Form Provision: “Association Rules”

07-014

§7.14

Form Provision: “Board of Directors”

07-015

§7.15

Form Provision: “Bylaws”

07-016

§7.16

Form Provision: “City/County”

07-017

§7.17

Form Provision: Common Area in Single-Phase Condominium Projects

07-018

§7.18

Form Provision: Common Area in Multiphase Condominium Projects

07-019

§7.19

Form Provision: Common Area in Planned Developments

07-020

§7.20

Form Provision: “Common Area Maintenance Standards”

07-021

§7.21

Form Provision: “Common Walls”; “Common Roofs” (Planned Developments)

07-022

§7.22

Form Provision: “Condominium”

07-023

§7.23

Form Provision: “Condominium Plan”

07-024

§7.24

Form Provision: “Declarant”

07-025

§7.25

Form Provision: “Declaration”

07-026

§7.26

Form Provision: In Single-Phase Projects

07-027

§7.27

Form Provision: In Multiphase Projects

07-028

§7.28

Form Provision: “Exclusive Use Common Area”

07-029

§7.29

Form Provision: “Governing Documents”

07-030

§7.30

Form Provision: “Lot” (Planned Development)

07-031

§7.31

Form Provision: “Member”

07-032

§7.32

Form Provision: “Mortgage” and “Mortgagee”

07-033

§7.33

Form Provision: “Owner”

07-034

§7.34

Form Provision: “Owner Maintenance Standards” (Condominium Project)

07-035

§7.35

Form Provision: “Party Wall” (Planned Development)

07-036

§7.36

Form Provision: “Phase” (Multiphase Condominium Project)

07-037

§7.37

Form Provision: “Phase Common Area” (Multiphase Condominium Project)

07-038

§7.38

Form Provision: “Property”

07-039

§7.39

Form Provision: “Subdivision Map”

07-040

§7.40

Form Provision: “Supplement” (Multiphase Condominium Project)

07-041

§7.41

Form Provision: “Unit” (Condominium Project)

07-042

§7.42

Form Provision: Ownership of Condominium (Condominium Project)

07-043

§7.43

Form Provision: Owners’ Nonexclusive Easements and Rights; Association Rights

07-044

§7.44

Form Provision: Entry or Use Rights

07-047

§7.47

Form Provision: Parking Spaces

07-048

§7.48

Form Provision: Driveways and Walkways

07-049

§7.49

Form Provision: Patios or Balconies

07-050

§7.50

Form Provision: Backyard Areas (Condominium Project)

07-051

§7.51

Form Provision: Minor Encroachments (Condominium Project)

07-052

§7.52

Form Provision: Minor Encroachments (Planned Development)

07-053

§7.53

Form Provision: Right of Association to Make Common Area Boundary Line Adjustments (Specialized Provision—Golf Course)

07-055

§7.55

Form Provision: Authority Over Common Area

07-056

§7.56

Form Provision: Emergency Access and Right-of-Way

07-057

§7.57

Form Provision: Common Wall, Common Roof, Party Wall Easements (Planned Development)

07-058

§7.58

Form Provision: Retention Basin Easement (Planned Development)

07-059

§7.59

Form Provision: Drainage Easements (Planned Development)

07-060

§7.60

Form Provision: Rain Gutter and Downspout Easements (Planned Development)

07-061

§7.61

Form Provision: Retaining Wall Easement (Planned Development)

07-062

§7.62

Form Provision: Other Easements (Planned Development)

07-063

§7.63

Form Provision: Association Easement for Performance of Duties

07-067

§7.67

Form Provision: Provisions Restricting Delegation of Use

07-071

§7.71

Form Provision: Residential Use

07-072

§7.72

Form Provision: Leasing and Transient Occupancy

07-073

§7.73

Form Provision: Restricted Access (Specialized Provision—Golf Course)

07-075

§7.75

Form Provision: Utilities, Equipment, Systems, and Fixtures

07-076

§7.76

Form Provision: Structural Alterations and Improvements

07-077

§7.77

Form Provision: Repair, Replacement, Reconstruction of Appliances, Fixtures, Equipment, or Interior Improvements

07-078

§7.78

Form Provision: Interior of Unit

07-079

§7.79

Form Provision: Owner Responsibility (Planned Development)

07-080

§7.80

Form Provision: Required Landscaping of Yard Areas; Owners’ Maintenance Obligations

07-081

§7.81

Form Provision: Association Maintenance

07-082

§7.82

Form Provision: Common Area

07-083

§7.83

Form Provision: Oil Drilling

07-084

§7.84

Form Provision: Offensive Conduct; Nuisance

07-085

§7.85

Form Provision: In General

07-086

§7.86

Form Provision: Vehicle Definitions

07-087

§7.87

Form Provision: Parking

07-088

§7.88

Form Provision: Use of Garages and Assigned Parking Spaces

07-089

§7.89

Form Provision: Repairs

07-090

§7.90

Form Provision: Guest Parking Spaces

07-091

§7.91

Form Provision: Use by Declarant

07-092

§7.92

Form Provision: Signs

07-093

§7.93

Form Provision: Antennas and External Fixtures

07-096

§7.96

Form Provision: Gas or Liquid Storage

07-097

§7.97

Form Provision: Plant Diseases and Insects

07-098

§7.98

Form Provision: Animals

07-099

§7.99

Form Provision: Trash Disposal

07-100

§7.100

Form Provision: Outside Laundering and Drying

07-101

§7.101

Form Provision: Common Area Trees

07-102

§7.102

Form Provision: Division of Lots (Planned Development)

07-103

§7.103

Form Provision: Compliance With Law and Association’s Insurance Requirements

07-104

§7.104

Segregated Real Property Taxes

07-105

§7.105

Form Provision: Unsegregated Real Property Taxes

07-106

§7.106

Form Provision: Exceptions

07-115

§7.115

Form Provision: Senior Citizen Development Declaration Provisions

07-116

§7.116

Form Provision: Savings Clause—Future Construction

07-117

§7.117

Form Provision: Indemnification for Negligence or Misconduct

07-118

§7.118

Form Provision: Enforcement by Suit

07-119

§7.119

General Statement of Powers

07-120

§7.120

Form Provision: Assessment Rights

07-121

§7.121

Form Provision: Recorded Statement of Information on Association

07-122

§7.122

Form Provision: Right to Delegate Powers and Duties; Professional Management; Requirements Applicable to Professional Managing Agent

07-123

§7.123

Form Provision: Association Contracts

07-124

§7.124

Form Provision: Establishing Rules Regulating Use of Common Area

07-129

§7.129

Form Provision: Right of Enforcement

07-130

§7.130

Form Provision: Notice to Owners

07-131

§7.131

Form Provision: Notice to Builders

07-132

§7.132

Form Provision: Duties

07-134

§7.134

Form Provision: Maintenance, Repair, and Management of Common Area

07-135

§7.135

Form Provision: Allocation of Costs of Common Area Maintenance

07-136

§7.136

Form Provision: Repair of Common Area Damaged by Wood-Destroying Pests or Organisms

07-137

§7.137

Form Provision: Central Air Conditioning and Heating Systems

07-138

§7.138

Form Provision: Landscaping and Exteriors

07-139

§7.139

Form Provision: Fences Surrounding Patio Areas

07-140

§7.140

Form Provision: Personal Property

07-141

§7.141

Form Provision: Contracting for Goods and Services

07-142

§7.142

Form Provision: Payment of Taxes and Assessments

07-143

§7.143

Form Provision: Furnishing Water and Other Utilities

07-144

§7.144

Form Provision: Budgets and Financial Reporting

07-145

§7.145

Form Provision: Securing Insurance Coverage

07-146

§7.146

Form Provision: Enforcement of Bonded Obligations

07-147

§7.147

Form Provision: Exoneration of Bonds

07-148

§7.148

Form Provision: Other Duties

07-149

§7.149

Form Provision: Limitations on Powers of Board or Association

07-150

§7.150

Form Provision: Exculpatory Provisions Applicable to Directors, Officers, and Other Association Representatives

07-151

§7.151

Form Provision: Common Area Liability

07-152

§7.152

Form Provision: No Effect on Liability of Association

07-153

§7.153

Form Provision: Meetings of Owners; Specially Elected Director

07-154

§7.154

Form Provision: Association’s Access to Association Books and Records

07-155

§7.155

Form Provision: Access to Copies of Governing Documents and Financial Statements

07-156

§7.156

Form Provision: Inspection Rights of Owners

07-157

§7.157

Form Provision: Inspection Procedure

07-158

§7.158

Form Provision: Directors’ Inspection Rights

07-159

§7.159

Form Provision: Owners’ Access to Minutes

07-161

§7.161

Form Provision: Qualifications

07-162

§7.162

Form Provision: Members’ Rights and Duties

07-163

§7.163

Form Provision: Transfer of Membership

07-164

§7.164

Form Provision: Majority Approval Required

07-166

§7.166

Form Provision: Two-Class System: Weighted Votes

07-167

§7.167

Form Provision: Two-Class System: Equal Votes

07-168

§7.168

Form Provision: Joint Ownership Votes

07-169

§7.169

Form Provision: Cumulative Voting

07-170

§7.170

Form Provision: Voting Procedures

07-171

§7.171

Form Provision: Commencement of Voting Rights

07-175

§7.175

Form Provision: Agreement to Pay Assessments

07-176

§7.176

Form Provision: Agreement to Contribute to Working Capital Reserves

07-177

§7.177

Form Provision: Declarant’s Limited Exemption From Assessment During Construction

07-178

§7.178

Form Provision: Assessments as Personal Obligation of Owner

07-179

§7.179

Form Provision: Use of Assessments

07-181

§7.181

Form Provision: Annual Budget Report

07-182

§7.182

Form Provision: Establishing Regular Assessments

07-183

§7.183

Form Provision: Distribution of Budget Report and Statement of Policies

07-185

§7.185

Form Provision: Accounting Treatment

07-186

§7.186

Form Provision: Limitations on Use of Reserves and on Assigning or Pledging Assessment Obligations

07-187

§7.187

Form Provision: Determination of Amount

07-188

§7.188

Form Provision: Limitations

07-189

§7.189

Form Provision: Uniform Rate of Assessment for Regular and Special Assessments

07-190

§7.190

Form Provision: Association Fiscal Year; Notice and Assessment Installment Due Dates

07-192

§7.192

Form Provision: Delinquent Assessments

07-193

§7.193

Form Provision: Collection and Enforcement

07-194

§7.194

Form Provision: Notice to Owner

07-195

§7.195

Form Provision: Creation of Lien

07-196

§7.196

Form Provision: Alternative Dispute Resolution

07-197

§7.197

Form Provision: Foreclosure

07-198

§7.198

Form Provision: Waiver of Homestead Protections

07-199

§7.199

Form Provision: Annual Report

07-200

§7.200

Form Provision: Monthly Reviews

07-201

§7.201

Form Provision: Reserve Account Study and Review

07-202

§7.202

Form Provision: Mortgagee’s Right to Request Audited Financial Statements

07-206

§7.206

Form Provision: Liability Insurance

07-207

§7.207

Form Provision: Fire and Related Perils Insurance

07-208

§7.208

Form Provision: Earthquake Damage Insurance

07-209

§7.209

Form Provision: Flood and Other Insurance; Fidelity Bonds

07-210

§7.210

Form Provision: Provision Appointing Trustee

07-211

§7.211

Alternative and Optional Insurance Provisions

07-212

§7.212

Form Provision: Individual Fire Insurance Limited: Condominium Projects

07-213

§7.213

Form Provision: Individual Fire Insurance Required: Planned Developments

07-214

§7.214

Form Provision: Individual Fire Insurance Limited: Planned Developments

07-215

§7.215

Form Provision: Provision to Adjust Losses

07-216

§7.216

Form Provision: Distribution to Mortgagees

07-217

§7.217

Form Provision: Director and Officer Liability Insurance

07-218

§7.218

Form Provision: Owner’s Liability Insurance

07-219

§7.219

Form Provision: Summary of Insurance

07-220

§7.220

Form Provision: Notice of Changes

07-221

§7.221

Form Provision: Assumption of Risk of Injury or Property Damage (Specialized Provision—Golf Course)

07-228

§7.228

Form Provision: Destruction: Proceeds Exceed 85 Percent of Reconstruction Costs

07-229

§7.229

Form Provision: Destruction: Proceeds Less Than 85 Percent of Reconstruction Costs

07-231

§7.231

Form Provision: Repair or Reconstruction Assessment (Condominium Project)

07-232

§7.232

Form Provision: Repair or Reconstruction Assessment (Planned Development)

07-233

§7.233

Form Provision: Repair or Reconstruction Contract

07-234

§7.234

Form Provision: Repair, Replacement, and Reconstruction of Appliances, Fixtures, Equipment, or Interior Improvements (Condominium Project or Planned Development With Blanket Insurance)

07-235

§7.235

Form Provision: Availability of Insurance Proceeds

07-236

§7.236

Form Provision: Repair or Reconstruction by Owner Affecting Structure

07-237

§7.237

Form Provision: Alteration of Unit Boundaries (Condominium Project)

07-238

§7.238

Form Provision: Minor Repair and Reconstruction

07-239

§7.239

Form Provision: Purchase of Condominiums With Uninhabitable Units Authorized

07-240

§7.240

Form Provision: Rebuilding and Purchase of Condominiums Not Authorized

07-241

§7.241

Form Provision: Use and Disposition of Insurance Proceeds (Planned Development)

07-242

§7.242

Form Provision: Fair Market Value as Appraisal Standard

07-243

§7.243

Form Provision: Destruction (Single-Structure Project)

07-245

§7.245

Form Provision: Sale by Unanimous Consent or Taking (Condominium Project)

07-246

§7.246

Form Provision: Revival of Right to Partition (Condominium Project)

07-247

§7.247

Form Provision: Total Sale or Taking or Partial Taking Followed by Partition (Condominium Project)

07-248

§7.248

Form Provision: Partial Sale or Taking Without Partition (Condominium Project)

07-249

§7.249

Form Provision: Fair Market Value as Appraisal Standard (Condominium Project)

07-250

§7.250

Form Provision: Sale by Consent

07-251

§7.251

Form Provision: Distribution of Sale Proceeds or Condemnation Award

07-253

§7.253

Form Provision: Suspension

07-254

§7.254

Form Provision: Distribution of Proceeds

07-255

§7.255

Form Provision: Power of Attorney

07-256

§7.256

Form Provision: Provision to Prohibit Severance

07-257

§7.257

Form Provision: Conveyance Includes All Interests

07-259

§7.259

Form Provision: Mortgage Permitted

07-260

§7.260

Form Provision: Subordination

07-261

§7.261

Form Provision: Mortgagee Consent to Amendment of Project Documents or Other Actions (Attached Condominiums)

07-263

§7.263

Form Provision: Mortgagee’s Right to Examine Books and Records

07-264

§7.264

Form Provision: Priority in Distribution of Insurance and Condemnation Proceeds

07-266

§7.266

Form Provision: Notice Requirements

07-267

§7.267

Form Provision: Payments by Mortgagees

07-268

§7.268

Form Provision: Lien Not Invalidated

07-269

§7.269

Form Provision: Mortgagee Need Not Cure Breach

07-270

§7.270

Form Provision: Status of Loan to Facilitate Resale

07-271

§7.271

Form Provision: Right to Appear at Meetings

07-272

§7.272

Form Provision: Right to Furnish Information

07-273

§7.273

Form Provision: Right of First Refusal Inapplicable to Mortgagee

07-274

§7.274

Form Provision: Limitation on Term of Management Contract

07-275

§7.275

Form Provision: Mortgagee Protections Control If Conflict With Other Provisions

07-279

§7.279

Form Provision: Provision for Architectural Approvals

07-280

§7.280

Form Provision: Appointment of Architectural Committee

07-285

§7.285

Form Provision: No Fixed Term

07-286

§7.286

Form Provision: Fixed Term

07-287

§7.287

Form Provision: Amendment Before Close of First Sale

07-288

§7.288

Form Provision: Amendment After Close of First Sale

07-289

§7.289

Form Provision: Compliance With Bus & P C §11018.7

07-290

§7.290

Form Provision: Amendments to Conform With Mortgagee Requirements

07-291

§7.291

Form Provision: Amendment to Delete Construction or Marketing Provisions After Completion by Declarant

07-293

§7.293

Form Provision: Right to Construct Additional Improvements

07-294

§7.294

Form Provision: Easements

07-295

§7.295

Form Provision: Owner and Association Cooperation

07-296

§7.296

Form Provision: Liability Insurance

07-297

§7.297

Form Provision: Condominium Plans

07-298

§7.298

Form Provision: Real Property Taxes

07-299

§7.299

Form Provision: Right to Annex Additional Phases

07-300

§7.300

Form Provision: Recording of Supplement

07-301

§7.301

Form Provision: Effect of Annexation

07-302

§7.302

Form Provision: Commencement of Assessments

07-303

§7.303

Form Provision: Payment of Reserves on Annexation of Lots or Condominiums Held for Rental

07-304

§7.304

Form Provision: Reservation of Easements and Rights of Use

07-305

§7.305

Form Provision: Annexation Other Than Under Plan of Annexation

07-307

§7.307

Form Provision: Facing Page Notice

07-309

§7.309

Form Provision: Headings

07-310

§7.310

Form Provision: Severability of Provisions

07-311

§7.311

Form Provision: Cumulative Remedies

07-312

§7.312

Form Provision: Violations as Nuisance

07-313

§7.313

Form Provision: No Discriminatory Restrictions

07-314

§7.314

Form Provision: Power of Attorney

07-315

§7.315

Form Provision: Liberal Construction

07-316

§7.316

Form Provision: Notification of Sale; Notices

07-317

§7.317

Form Provision: Delivery of Notice by Association

07-318

§7.318

Form Provision: Number; Gender

07-319

§7.319

Form Provision: Incorporation of Exhibits

07-320

§7.320

Form Provision: Easements Reserved and Granted

07-321

§7.321

Form Provision: Binding Effect

CH08

Chapter 8

The Transition Period: Forming the Association, Transferring Control to Homeowners, and Addressing Construction Defects (SB 800)

08-056

§8.56

Form Provision: Transfer Builder’s Right to Repair Law Claim Authority to Nondeveloper Board Members

08-057

§8.57

Form Provision: Claims Procedure Exhibit to Declaration

APP

Appendixes

APPENDIXES

APP-A

APP-A

Articles of Incorporation of Owners Association

APP-B

APP-B

Bylaws of Owners Association

APP-C

APP-C

Declaration of Covenants, Conditions, and Restrictions

APP-D

APP-D

Declaration of Covenants, Conditions, and Restrictions and Reservation of Easements for a Commercial Condominium

APP-E

APP-E

Mutual Benefit Agreement Between Owners of Mixed-Use Project

 

Selected Developments

January 2019 Update

The most significant developments in 2017–2018 relevant to this book include the following:

Effective July 1, 2018, the California Bureau of Real Estate (BRE or CalBRE) was removed from the Department of Consumer Affairs, made a department with the Business, Consumer Services, and Housing Agency, and renamed the Department of Real Estate (DRE). All references to that agency in this book have been updated accordingly. See Notes in §§3.1, 7.2.

Important Reminder! Effective January 1, 2014, the operation of commercial and industrial common interest developments (CIDs) (as distinct from residential CIDs) is governed by the Commercial and Industrial Common Interest Development Act (CC §§6500–6876) (SB 752) (Stats 2013, ch 605). See §§1.82, 9.4.

Another Reminder: Effective March 26, 2015, the Interstate Land Sales Full Disclosure Act was amended to exempt all condominium sales and leases from certain registration and disclosure requirements (if they are not already exempt from the Act). See 15 USC §1702(b), (d). See §1.32.

In San Francisco Apartment Ass’n v City & County of San Francisco (9th Cir 2018) 881 F3d 1169, the Ninth Circuit upheld an ordinance establishing that property was not eligible for condominium conversion for 10 years after the owner or former owner entered into a buyout agreement with a senior, disabled, or catastrophically ill tenant, or with two or more tenants in the same building; the ordinance did not violate the constitutional freedom of contract. See §4.7.

In October 2018, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) issued updated Selling Guides, which specify their review and eligibility requirements in connection with financing sales of units in common interest developments. For the current Fannie Mae requirements, see §§6.30–6.53. For the current Freddie Mac requirements, see §§6.54–6.73.

Beginning January 1, 2017, CC §4775 was amended to specify that, if the CC&Rs for a common interest development do not provide otherwise, the owner of a separate interest is responsible for maintaining any exclusive use common areas appurtenant to that interest, and the association is responsible for repairing and replacing exclusive use common areas (including any such areas appurtenant to a separate interest). See §§7.45, 7.133, 7.139.

Effective January 1, 2018, CC §4600 was amended to exempt (from its supermajority member vote requirement) actions by homeowners to install or use a solar energy system on the roof of their residence or on an adjacent garage or carport assigned to those owners for their exclusive use. See §7.54.

Effective January 1, 2018, CC §714.1(b) was added to prohibit an association from establishing a general policy prohibiting an owner from installing or using a rooftop solar energy system for household purposes on the roof of the building in which the owner resides, or on an adjacent garage or carport that has been assigned to the owner for exclusive use. See §7.75.

As a reminder, several legislative bills enacted in response to the California drought affect common interest developments. For example, a governing document provision is now void and unenforceable if it (1) prohibits, or has the effect of prohibiting, the use of low-water-using plants or artificial turf; (2) has the effect of prohibiting compliance with certain water conservation ordinances; or (3) requires pressure washing of the exterior of a separate interest and any appurtenant exclusive use common area during a state or local government–declared drought emergency. See CC §§4735–4736, discussed in §§7.80, 7.125, 7.129.

Effective January 1, 2017, any provision of the governing documents (including rules and architectural guidelines) is void and unenforceable if it prohibits or unreasonably restricts the use of clotheslines or drying racks in an owner’s backyard. CC §4753. See §7.100.

The sunset date for the statutory Calderon prelitigation procedures has been extended to July 1, 2024. CC §6000(s). See §7.131.

Effective January 1, 2018, CC §5300 was amended to add the following to the already-long list of documents required to be distributed to members as part of the annual budget report: A copy of the completed “Charges for Documents Provided” disclosure identified in CC §4528. See §7.181.

In a suit by members against the president of the homeowners association, Palm Springs Villas II Homeowners Ass’n, Inc. v Parth (2017) 248 CA4th 268, the court held that the president’s defense, based on the Lamden business judgment rule, failed because his lack of diligence negated his allegation of good faith. See §8.26.

In McMillin Albany, LLC v Superior Court (2018) 4 C5th 241, the California Supreme Court resolved the question of whether the Builder’s Right to Repair Law is the exclusive remedy for all residential construction defect claims, regardless of whether property damage has occurred. The court held that the Law is the mandatory, exclusive process for all residential construction defect claims for homes sold after 2002, even when claims arise from actual damages; homeowners cannot avoid the law’s requirements and prelitigation procedures by alleging only common law claims. See §§8.30, 8.32, 8.58.

In Acqua Vista Homeowners Ass’n v MWI, Inc. (2017) 7 CA5th 1129, the California Supreme Court held that a supplier of allegedly defective pipes in a condominium development cannot be liable for a violation of the building standards absent a showing of negligence or breach of contract; strict liability did not apply. See §8.38.

In Blanchette v Superior Court (2017) 8 CA5th 521, the court ruled that the builder’s failure to respond to the homeowner’s notice of construction defect claim within 14 days released the homeowner from the requirements of Builder’s Right to Repair Law, even though the notice of claim was insufficient on its face; the builder could not choose to ignore the claim notice and the 14-day period to respond merely because the notice lacked specificity. See §8.42.

About the Authors

DAVID E. BRUCE, update author of chapter 3, is a senior attorney in the Coachella Valley office of Epsten Grinnell & Howell, APC. He received his B.A. from San Francisco State University in 1991 and his J.D. from New College of California School of Law in 1995. Mr. Bruce started his career in the real estate industry at the California Department of Real Estate (DRE), where he worked for more than 4 years as both a Deputy Commissioner, reviewing the filings of developers in connection with his issuance of public reports, and as a Real Estate Counsel, disciplining licensees and developers in administrative law hearings for violations of the Real Estate Law. He then worked for more than 6 years at a major national homebuilder as an in-house counsel responsible for all legal affairs for its Central Valley and Inland Empire areas of operations, including supervising the homebuilder’s DRE processing. Subsequently, Mr. Bruce continued his real estate practice as a sole practitioner. That included testifying as an expert witness on the application of the Subdivided Lands Law. Since 2012, he has been with Epsten Grinnell & Howell, APC, representing community associations with an emphasis on developer-related matters, and has given presentations to management companies and industry trade groups on association-developer relations.

JOHN ROGERS BURK, update author of chapter 5, practices law in Roseville. He received a B.A. in architecture from the University of California, Berkeley, in 1967, and a J.D. from the University of California, Hastings College of the Law, in 1973. His previous publications and speaking engagements include 2005–2011 update author of chapter 5 of this book; Legal Structure and Ownership of a Timeshare Project, ARDA Developments (July 2006); To Deed or Not to Deed, That is the Question, The Resort Trades (March, June 2007); Deeded Timeshares—Consequences and Remedies, The Resort Trades (Feb. 2010); and Vacation Ownership World (Dec. 2010); consultant on Drafting Business Contracts: Principles, Techniques and Forms (Cal CEB); and workshops on “Non-Deeded Timesharing, Shattering the Myths” at the annual ARDA Convention and Exposition. Mr. Burk’s articles may be viewed at www.jrblawcorp.com.

HELENE Z. FRANSZ, author of chapters 6 and 10, is of counsel to Adams Kessler in Irvine. When she originally wrote chapter 6, she was a partner in the Orange County office of Adair & Fransz. She received her B.A. from Boston College in 1982 and her J.D. in 1985 from the Georgetown University Law Center. Ms. Fransz represents clients who develop and sell residential and commercial properties. In addition to creating governing documents, various agreements, and disclosures for common interest and standard subdivisions, Ms. Fransz assists developers in evaluating dispute resolution, risk management, and SB 800-compliance options. A significant portion of Ms. Fransz’s practice involves assisting master developers with development of governance structures, control of merchant builder legal documents and marketing materials, and compliance with local agency requirements. Ms. Fransz represents both typical developers of condominium projects, planned developments, and standard subdivisions and master developers of large communities. She has acted as a consultant assisting in the establishment of planned communities in both northern and southern California and in other states, including Nevada and Utah. She has also coordinated the legal work for conversion of numerous community apartment, stock cooperative, and cooperative trust projects to condominium projects. Ms. Fransz has published numerous articles and was recently a panelist for CEB’s Common Interest Developments From the Ground Up (Southern California Program). She has taught in Golden Gate University’s masters in tax program in Orange County.

ROBERT D. GILMORE, original author of chapter 3, was the District Manager of the subdivision section of the California Department of Real Estate for southern California. He earned his B.S. in 1972 from California State University, Sacramento. Mr. Gilmore has been involved in drafting numerous statutes and regulations pertaining to the Subdivided Lands Act. He has written articles for various real estate publications and is a frequent speaker on the subject of common interest subdivisions.

F. SCOTT JACKSON, author of chapters 4 and 9, is a partner with the firm of Jackson DeMarco Tidus Petersen Peckenpaugh. His practice is concentrated on representing land developers, homebuilders, and nonprofit organizations of all kinds. He earned his B.S. in 1967 from the United States Air Force Academy and his J.D. in 1971 from the University of Denver College of Law. Mr. Jackson is a past president of the National Community Associations Institute, a member of the American College of Real Estate Lawyers, and a charter member of the Board of Governors of the College of Community Association Lawyers. He is also a member of the Department of Real Estate Committee of the California Building Industry Association. Mr. Jackson was the author of the chapters on condominium conversions and homeowners associations in the first edition of this book, California Condominium and Planned Development Practice, and has co-authored several books and articles, including Condominiums and Cooperatives with the Assistant Attorney General of the State of New York and the textbook Business Condominiums published by the National Association of HomeBuilders. He has been described as a “leading commentator” by the California Court of Appeal and has published numerous articles and spoken frequently on the subject of common interest subdivisions.

RICHARD C. SMITH, author of chapters 1 and 7, is a real estate partner in the Los Angeles office of Arnold & Porter. Mr. Smith earned his A.B. in 1965 from Claremont McKenna College and his J.D. in 1968 from the University of California, Hastings College of the Law. He was the principal author of the first edition of this book, then titled California Condominium and Planned Development Practice. Mr. Smith has served as a member of the Executive Committee of the California State Bar Real Property Section, the Subdivision Advisory Committee of the California Department of Real Estate, and the Legal Committee of the Airport Operators Council International. He currently is an Adjunct Professor at the University of Southern California, where he teaches real property and land use law to graduate students in the School of Policy, Planning and Development. He has frequently lectured and written on real estate, land use, and airport topics.

D. SCOTT TURNER, author of chapter 5, is a partner in the Irvine office of Cox, Castle & Nicholson LLP. Before joining the firm in 1983, he served as Deputy Real Estate Commissioner, California Department of Real Estate, Headquarters Section, from 1979 through 1983. Mr. Turner has extensive experience in dealing with real estate brokerage issues, including regulatory problems, licensure issues, sales entity structures, relationships between developers and brokers, consumer disclosure issues, and consumer purchase agreements. As a regulator and as an attorney in private practice, Mr. Turner has structured more than 1000 residential subdivision projects in California, other states, and several foreign countries. He specializes in representing developers and brokers in conjunction with residential and resort properties, including acquisition, development, financing, land use, and entitlement matters. Mr. Turner’s speaking, lecturing, writing, and organizational involvement include Lecturer, CEB (Continuing Education of the Bar), “Fundamentals of Real Property Practice”; Lecturer, Advanced Real Property Series, “Timesharing in Resort Properties”; Member: State Legislative Committee, American Resort and Residential Development Association; Asociacion Mexicana De Desarrolladores Turisticos, A.C. (AMDETUR); California Building Industry Association (CBIA); and CBIA Home Builders.

JEFFREY G. WAGNER, author of chapters 2 and 8, practices law in Walnut Creek. His practice focuses on real estate development, condominiums, homeowners associations, and land use. He received his J.D. from the University of San Francisco in 1973 and his B.S. from the University of Santa Clara in 1967. Mr. Wagner has been the update author for the predecessor to this book, California Condominium and Planned Development Practice, since 1986. He is also the author of SB 800: Builder’s Right to Repair v. Homeowner’s Right to Sue, New Natural Hazard Disclosure Requirements, Senior Housing Laws: Recipe for Heartburn, and Insurance and Damage and Destruction Provisions for Condominiums and Planned Developments, published in the California Real Property Journal, and Condominium Common Area: Property Unreasonably Restrained?, published in the John F. Kennedy Law Review. Mr. Wagner is a member of the Building Industry Association of Northern California and the Community Associations Institute.

About the 2019 Update Authors

DAVID E. BRUCE, update author of chapters 2, 3, and 8, is a senior attorney with Epsten Grinnell & Howell, APC, in Indian Wells. See his biography in the About the Authors section of this book.

JOHN ROGERS BURK is the update author of chapter 5; see his biography in the About the Authors section of this book.

HELENE Z. FRANSZ, update author of chapters 6 and 10, practices law in Irvine and is of counsel to Adams Kessler. For other biographical information about Ms. Fransz that pertained when she originally wrote chapter 6, see the About the Authors section of this book.

F. SCOTT JACKSON, update author of chapters 4 and 9, is a partner with Jackson Tidus in Irvine; see his biography in the About the Authors section of this book. Mr. Jackson gratefully acknowledges STEVEN J. DETTMANN, a shareholder at Jackson Tidus, for his research and drafting assistance with chapter 9.

KATIE JACOBSEN, update author of chapter 7, is Special Counsel with Duane Morris LLP in San Diego. She received her B.A. in philosophy from St. Olaf College in 1981 and her J.D. from the University of San Diego School of Law in 2001. Ms. Jacobsen works with commercial and residential developers on common interest and standard subdivisions, with a special expertise in advising residential homebuilders on Department of Real Estate (DRE) matters. She is an active member and chair of the San Diego Building Industry Association’s DRE Committee and vice chair of the California Building Industry Association’s DRE Council.

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