2021 HOA Case Law Review
By Stephen T. Brindle, Esq.
This article first appeared in the Winter 2022 Issue of The Communicator here.
RENTAL RESTRICTIONS
Brown v. Montage at Mission Hills, Inc.
Background: Brown bought a condominium unit to use as a vacation rental. At the time of the purchase, the association’s governing documents did not contain any restrictions regarding shortterm rentals. Sixteen years after Brown purchased the unit, the association amended its governing documents to include a 30-day minimum rental period restriction. After the association told Brown that it intended to enforce the restriction against her unless she stopped use of her unit for short-term rentals, Brown sued the association, claiming that the restriction did not apply to her because she purchased the unit prior to the effective date of the amendment. In its defense, the association claimed that the restriction was in fact a regulation, not a restriction, and also that shortterm rentals violated the commercial use prohibition in its governing documents, which existed prior to Brown’s purchase.
Court Ruling: The court held that the short-term rental restriction did not apply to Brown. Civ. Code § 4740 states that an owner of a separate interest is not subject to a restriction in a governing document that prohibits the rental of that interest unless the governing document was effective prior to the date the owner acquired title to their interest. The court held that the short-term rental restriction was such a "prohibition." In addition, the court held that leasing of the unit for short-term rentals did not violate the association’s prohibition against "business or commercial activities," especially as the association did not prohibit long-term rentals, only shortterm ones.
Tips for Associations: Keep track of the effective dates of amendments creating new rental restrictions and owners’ purchase dates to know which restrictions apply to which owners. Also, amend governing documents to include such rental restrictions early, especially if the documents are already in violation of recent statutory changes created by AB 3182.
PREMISES LIABILITY
Issakhani v. Shadow Glen Homeowners Association, Inc.
Background: In order to construct a development, the municipality’s zoning ordinance required the developer to build 34 guest parking spaces. The association later sold all but six of those guest spaces to owners for their exclusive use. Issakhani couldn’t find guest parking at the development and had to park across a busy street. While crossing the street, she was hit by a car. She sued the association for negligence and premises liability, on the theory that the association had breached a duty of care it owed to her by selling off guest parking, which would have otherwise been available to her and but for that sale, she would not have been injured.
Court Ruling: The association did not owe a common law duty of care to Issakhani to provide adequate guest parking. Further, the intent of the municipality’s ordinance in requiring a certain number of guest parking spaces was to maintain neighborhood aesthetics, not to protect invitees from traffic accidents. As the association was not liable for the plaintiff’s injuries, the court affirmed the trial court’s grant of summary judgment in favor of the association.
Tips for Associations: While this case addressed an injury that occurred offsite, it is important for associations to understand that they still could still be liable for premises liability onsite. If you have a dangerous condition onsite, address it ASAP.
CLAIMS FOR ATTORNEY’S FEES
Champir, LLC v. Fairbanks Ranch Association
Background: A homeowner obtained a temporary restraining order, and later a preliminary injunction, enjoining an association from installing a traffic signal near their home without first obtaining membership approval. In response to the suit, the association sought and obtained the required membership approval. The court thereafter dissolved the preliminary injunction and the homeowner voluntarily dismissed their causes of action. Both the homeowner and the association filed motions for attorney’s fees, claiming to be the "prevailing party" in the litigation under Civ. Code § 5975(c). A prevailing party in litigation can make a motion for attorney’s fees if there is a statute that allows for them, and the Davis-Stirling Act provides for just that.
Court Ruling: The homeowner achieved their main litigation objective, which was to require the association to obtain prior membership approval to construct the traffic light. Therefore, although the court did not award money damages to the homeowner, and although the homeowner voluntarily dismissed their claims after the court dissolved the injunction, the homeowner was the prevailing party in the litigation, and therefore entitled to an award of its attorney’s fees.
Tips for Associations: Among other reasons, this case is applicable to associations that seek injunctions against homeowners for violations of their governing documents. If a homeowner later complies with the association’s demands, causing the association to dismiss suit, the association can theoretically still seek an award of its attorney’s fees.
INVASION OF PRIVACY, SECURITY CAMERAS
Mezger v. Bick
Background: This case began as a neighbor-to-neighbor dispute between comedian Kathy Griffin and her boyfriend Randy Bick, and their neighbor and the CEO of KB Homes Jeff Mezger and his wife Sandra. The Mezgers alleged that Griffin and Bick were using their Nest security cameras and iPhones to record loud parties at the Mezger’s residence to report noise violations to their homeowners’ association, among other things. The Mezgers sued Griffin and Bick under various theories, including invasion of privacy, claiming that Griffin and Bick were preventing the Mezgers from using their backyard and capturing private conversations in both their backyard and within their home. In their defense, Griffin and Bick said that the security cameras were for their own security, as they had been the victims of threats and stalking in the past, that the use of their iPhones was 100 percent on their property, and that any sounds they might have recorded were unintentional, as the Mezgers’ parties were so loud as to be easily captured by such sensitive equipment.
Court Ruling: The court found that the conversations on the recordings were indecipherable, that the focus of the Nest security camera was mainly Griffin & Bick’s balcony and exterior stairwell, and that the audio recordings by the iPhones was not a serious invasion of privacy because what the Mezgers and their guests were saying was so loud as to be heard from Griffin and Bick’s balcony. There could be no reasonable expectation of privacy when one is talking so loud as to be heard from the neighbors’ property and the privacy intrusion was insubstantial. The court of appeal upheld the trial court’s dismissal of all of the causes of action on summary judgment.
Tips for Associations: This ruling helps to clarify privacy concerns that associations may have in seeking video documentation for noise complaints in this manner. If someone is making noise that can be heard from the neighbor’s residence, that person likely does not have a reasonable expectation of privacy.
Stephen T. Brindle is a senior associate attorney at SwedelsonGottlieb. He represents and counsels community associations on matters ranging from operations, corporate governance and governing documents, enforcement, short term leasing, assessments, demand letters, dispute resolution and settlement agreements, and general transactional matters.