Not Every Homeowners Association Is Subject to The Davis-Stirling Act

By David Swedelson, Community Association Attorney and Partner at SwedelsonGottlieb
The Davis-Stirling Common Interest Development Act is the common name of the portion of the California Civil Code beginning with section 1350, which governs condominium, cooperative, and planned unit development communities in California. It was enacted in 1985 by the California State Legislature and has been amended over 45 times.

There are many homeowner associations that look like any other and collect fees and assessments, but in fact are not subject to the Davis-Stirling Act based on the holdings in Mount Olympus Property Owners Ass’n v. Shpirt, 59 Cal. App. 4th 885 (Cal. App. 2d Dist. 1997) and Comm. to Save the Beverly Highlands Homes Ass’n v. Beverly Highlands Homes Ass’n, 92 Cal. App. 4th 1247 (Cal. App. 2d Dist. 2001).

In Mount Olympus, the court held that in order for a common interest development to exist and the Davis-Stirling Act to apply, “there must exist a common area owned either by the association or by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.” The court did not interpret the Davis-Stirling Act to require that the common area be of a certain size or be used by the association in a particular manner.

In Beverly Highlands, the court used a similar analysis, and because the association did not own any land whatsoever, and because there was no land over which the owners had mutual or reciprocal easement rights appurtenant to their separate interests, it held that a common interest development did not exist and the Davis-Stirling Act therefore did not apply.

The courts in both Mount Olympus and Beverly Highlands held that the statutory common area requirement for a common interest development is met when the association owns a portion of land as common area.

So, if your association does not have nor own any common area, and the areas that the association does maintain are owned exclusively by the owners and no other owner has an easement to use that property, then it is very possible that your association is not subject to nor required to comply with the Davis-Stirling Act. If you are unsure, the board should consider having this issue analyzed by an attorney well versed in this area of the law.

David Swedelson is a California condo and HOA legal expert, and he can be reached via email at: dcs@sghoalaw.com.