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BrianP19 (California)
Posts: 31
Posted:
Hello HOA Talk:

Does anyone know the reasoning why HOAs not covered under Davis Stirling lack almost all of the consumer protections afforded to the CID (community based development) hoas?

Our HOA claims they are not covered DS (this is debatable but accepting their premise for now) so any disputes follow the corp code which is very difficult to navigate and offers no remedies outside of superior court.
KerryL1 (California)
Posts: 14,550
Posted:
In case you haven't seen it, https://www.davis-stirling.com/HOME/C/CID-Defined#axzz2C0xWkhYh gives a definition of Common Interest Developments. At the most basic level, if Your "HOA" has common areas it is a CID and covered by the Davis-stirling Act.

What kind of "consumer protection" are you referring to?? Please provide examples.
SheliaH (Indiana)
Posts: 6,964
Posted:
Just because someone told you it's not applicable doesn't mean it's true. What do your documents say?
Did you ask your attorney to review the documents to see if this is correct? It might also be helpful to check with the secretary of State's office or whoever registers corporations in your state and see how it was chartered. If your community is a planned development, I would think it applies

I'm sure some of the California posters will respond, but if your community isnt covered, there could be a number of reasons, starting with numbers- maybe there aren't enough of the type of community you live in. Maybe no one's gone to the state legislature to ask that your type of community be added to the statute.

If that's the case, this is something you and your neighbors could discuss with your local representatives to see if a bill could be proposed. This won't happen overnight and you may have powerful developers that oppose it, but no one said change is easy.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By SheliaH on 01/09/2024 9:08 AM
Just because someone told you it's not applicable doesn't mean it's true. What do your documents say?
Did you ask your attorney to review the documents to see if this is correct? It might also be helpful to check with the secretary of State's office or whoever registers corporations in your state and see how it was chartered. If your community is a planned development, I would think it applies

I'm sure some of the California posters will respond, but if your community isnt covered, there could be a number of reasons, starting with numbers- maybe there aren't enough of the type of community you live in. Maybe no one's gone to the state legislature to ask that your type of community be added to the statute.

If that's the case, this is something you and your neighbors could discuss with your local representatives to see if a bill could be proposed. This won't happen overnight and you may have powerful developers that oppose it, but no one said change is easy.

I've been the Adams Stirling website before and am familiar with the criteria. Our HOA is a bit of mess- in past litigation they've asserted they are DS when it benefits them and non- DS when it doesnt. In 2016 they even filed a document with the state of california saying they are a DS HOA. Technically- they do not own land which is a major requirement to being a DS HOA BUT they do have possessor interest (they permanently rent part od city hall and they also have an interest (but dont own) the parks and easements. The issue would likely need to be litigated for a conclusion.

It is funny you mention proposing a change to law. I've been trying to do this for a few months and have had initial conversations with some legislative aids. The reason I asked the question is that aids themselves were not sure why this loop hole exists. In terms of numbers I've tried to figure this out too. Our HOA has 5700 members in it. I know there must be more but i havent been able to figure out how many.
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By KerryL1 on 01/09/2024 9:02 AM
In case you haven't seen it, https://www.davis-stirling.com/HOME/C/CID-Defined#axzz2C0xWkhYh gives a definition of Common Interest Developments. At the most basic level, if Your "HOA" has common areas it is a CID and covered by the Davis-stirling Act.

What kind of "consumer protection" are you referring to?? Please provide examples.

1. Unlike DS... non DS HOA members can not go to small claims court when the HOA does something wrong. Everything must go thru superior court. That is out of reach of most people. Also- under DS if the HOA is found to have violated a rule there are civil penalties- non DS does not.
2. Non DS has no open meeting requirements.
3. Non DS has much more limited document requests than DS. DS also clearly defines what must be available and what is not- where as under the non DS it is very vague.
4. DS has much more strict election rules clearly defining when ballots must be sent and how long people have to vote, non ds does not.

I could list more...
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BrianP19 on 01/09/2024 9:48 AM

1. Unlike DS... non DS HOA members can not go to small claims court when the HOA does something wrong.
First, if the owner v. HOA dispute involves money below the small claims threshold, then small claims court has jurisdiction.

Second, where money is not involved but instead, injunctive relief is sought, the D-S statute gives small claims court jurisdiction only in elections disputes and records inspection disputes.

Third, are your bylaws really so vague that they are difficult to use as a weapon for enforcement of xyz? If so, understood. Some HOA byaws are terribly lightweight.

Fourth, I agree a close read of several D-S statute sections indicates that determining whether the statute applies or not is open to debate; depends on the finer legal points; and would likely require a ruling from a court. If the Declaration speaks to this rental, or the easements clearly qualify under the D-S statute, then from where I am sitting, the D-S statute applies. Unfortunately I am just some internet punk who is not going to finance the lawyer and possibly lawsuit that likely may be needed here to settle this.

Fifth, for the D-S statute to apply, why have this requirement for a HOA to have some kind of "common interest"? I can see HOAs with rigorous covenants benefiting from more regulation via the D-S statute. I would hypothesize this: The D-S statute came into being in the 1980s, when developers were not as regulated in general. The latter means developers did not write as many covenants because cities and counties had fewer regulations. Back then, I doubt cities and counties required "HOAs"the way cities and counties require HOAs now. Hence back then perhaps non-common-interest subdivisions often did not even have boards and were not even incorporated. So why regulate them with a statute?
KerryL1 (California)
Posts: 14,550
Posted:
Your HOA has 5,700 members but NO Common areas?? No swimming pool or gym? No reserves account? The county owns your roads? And landscaping?

sorry, Brain I'm trying to understand this.

Oh, yes, protections of owners are lacking w/o D-S Act requirements. The word "consumer" threw me.
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By KerryL1 on 01/09/2024 10:32 AM
Your HOA has 5,700 members but NO Common areas?? No swimming pool or gym? No reserves account? The county owns your roads? And landscaping?

sorry, Brain I'm trying to understand this.

Oh, yes, protections of owners are lacking w/o D-S Act requirements. The word "consumer" threw me.

So- basically.. yes. 5700 members (basically houses). In the old days.. the HOA owned everything (even things like health inspector) but then ran out of money and the parks etc were moved over to a city. The only thing the hoa really does now is enforce architectural rules and approvals. Members pay when they need approval to change their house . The HOA has a bank account. The city owns the parks/roads but the hoa still has their name on deed i think.

I could tell you the name of our city and you'd likely know which hoa im talking about
MarkM19 (Texas)
Posts: 1,459
Posted:
Brain,
I used to be on a California board for 8 years and the last 6 as president. We always viewed Davis Sterling as a very good website that was highly recommended as a reference. I am confused by your comment about being a DS HOA. DS is a law firm in the State of California. They provide legal services if contracted by HOAs.

Am I missing something?
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By ElleN on 01/09/2024 10:30 AM
Posted By BrianP19 on 01/09/2024 9:48 AM

1. Unlike DS... non DS HOA members can not go to small claims court when the HOA does something wrong.
First, if the owner v. HOA dispute involves money below the small claims threshold, then small claims court has jurisdiction.

Second, where money is not involved but instead, injunctive relief is sought, the D-S statute gives small claims court jurisdiction only in elections disputes and records inspection disputes.

Third, are your bylaws really so vague that they are difficult to use as a weapon for enforcement of xyz? If so, understood. Some HOA byaws are terribly lightweight.

Fourth, I agree a close read of several D-S statute sections indicates that determining whether the statute applies or not is open to debate; depends on the finer legal points; and would likely require a ruling from a court. If the Declaration speaks to this rental, or the easements clearly qualify under the D-S statute, then from where I am sitting, the D-S statute applies. Unfortunately I am just some internet punk who is not going to finance the lawyer and possibly lawsuit that likely may be needed here to settle this.

Fifth, for the D-S statute to apply, why have this requirement for a HOA to have some kind of "common interest"? I can see HOAs with rigorous covenants benefiting from more regulation via the D-S statute. I would hypothesize this: The D-S statute came into being in the 1980s, when developers were not as regulated in general. The latter means developers did not write as many covenants because cities and counties had fewer regulations. Back then, I doubt cities and counties required "HOAs"the way cities and counties require HOAs now. Hence back then perhaps non-common-interest subdivisions often did not even have boards and were not even incorporated. So why regulate them with a statute?

So-- i agree with what you wrote about small claims court. DS is not perfect.. but i can tell you it is 1000s of times better than not having those protections.

Our CC&Rs are very very weak. But the board violates those too (inspection rights). Again, in non-DS... it is superior court or nothing. Im trying to figure out if there is a reason for that and what it might be.
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By MarkM19 on 01/09/2024 10:43 AM
Brain,
I used to be on a California board for 8 years and the last 6 as president. We always viewed Davis Sterling as a very good website that was highly recommended as a reference. I am confused by your comment about being a DS HOA. DS is a law firm in the State of California. They provide legal services if contracted by HOAs.

Am I missing something?

Davis Stirling (DS) is the law it is part of the california civil code.
Adams Stirling is the lawfirm that has a website called Davis-Stirling.com which has lots of information on both DS and non DS HOAs.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BrianP19 on 01/09/2024 10:48 AM

So-- i agree with what you wrote about small claims court. DS is not perfect.. but i can tell you it is 1000s of times better than not having those protections.
When it comes to resolving disputes, I agree the D-S statute (to be formally cited as the "Davis-Stirling Common Interest Development Act," Civ Code 4000) is quite good.

Is it good to have all this regulation of HOA procedures? I think so. Maybe it helps reduce litigation.

And I am kinda unhappy about all the regulation these days. The minutiae is so often based in the reality of too many money-hungry lawyers, IMO.

Quote:
Posted By BrianP19 on 01/09/2024 10:48 AM
Our CC&Rs are very very weak. But the board violates those too (inspection rights). Again, in non-DS... it is superior court or nothing. Im trying to figure out if there is a reason for that and what it might be.
In a non-HOA, with no corporation and no board, Neighbor X can violate the rights of Neighbor Y. What is Neighbor Y's remedy? Ultimately, court. If a remedy is not broke, do not fix it. Granted when certain areas start to become a source of great litigation, then that's when legislatures tend to step in and want to start regulating, typically to the advantage of one party and disadvantage of another.

This is an advanced Civics topic.
RileyS (California)
Posts: 55
Posted:
Brian - have you checked with the California Secretary of State's office?

Go to this link and type the name in. (You can also do a partial search if you don't know the full name)

https://bizfileonline.sos.ca.gov/search/business
TerriS6 (California)
Posts: 3,284
Posted:

<

"
So-- i agree with what you wrote about small claims court. DS is not perfect.. but i can tell you it is 1000s of times better than not having those protections.

Our CC&Rs are very very weak. But the board violates those too (inspection rights). Again, in non-DS... it is superior court or nothing. Im trying to figure out if there is a reason for that and what it might be.

Are you positive there is no common area whatsoever even if it's a parking area? I have never seen any example of anyone being prohibited from using small claims court for the right reasons or if limit is below $12,500. There are so many circumstances, I can't see anyone making a blanket prohibition.
TerriS6 (California)
Posts: 3,284
Posted:
If HOA is on deed to parks and roads, you have a common area and are under Davis-Stirling Act.
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By RileyS on 01/09/2024 11:36 AM
Brian - have you checked with the California Secretary of State's office?

Go to this link and type the name in. (You can also do a partial search if you don't know the full name)

https://bizfileonline.sos.ca.gov/search/business

Yes. On this site the DS registration for my HOA that they filed in 2016 is listed. But in litigation after this doc was filed the claims they are not DS.

Again tho- my main question is trying to figure out why the protections under DS don't exist for non-DS hoas. There must be a reason.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BrianP19 on 01/09/2024 1:51 PM
my main question is trying to figure out why the protections under DS don't exist for non-DS hoas.
Your main question is trying to figure out why the California legislature decided "HOAs" without common area (or without common interests in real property, like certain easements) do not need extensive protections whereas HOAs with common area (or with certain common interests in real property) do.

The bottom line is that subdivisions that lack common area (or any other common interest in real property) obviously have no need to collect dues. Nor do these subdivisions need a governing body that oversees maintenance of the common area (because there is not common area). This means a board would be superfluous. Which means the subdivision's Declaration is unlikely to mandate a "HOA" with a board et cetera.

Does your HOA have dues? If so, for what do these dues pay?
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By ElleN on 01/09/2024 2:54 PM
Posted By BrianP19 on 01/09/2024 1:51 PM
my main question is trying to figure out why the protections under DS don't exist for non-DS hoas.
Your main question is trying to figure out why the California legislature decided "HOAs" without common area (or without common interests in real property, like certain easements) do not need extensive protections whereas HOAs with common area (or with certain common interests in real property) do.

The bottom line is that subdivisions that lack common area (or any other common interest in real property) obviously have no need to collect dues. Nor do these subdivisions need a governing body that oversees maintenance of the common area (because there is not common area). This means a board would be superfluous. Which means the subdivision's Declaration is unlikely to mandate a "HOA" with a board et cetera.

Does your HOA have dues? If so, for what do these dues pay?

Correct. Currently our HOA collects fees when you want make changes in your house (paint color, windows, etc). In the past, we've had special assessments but not currently. The HOA has hundreds of thousands of dollars in the bank and has stated a goal of $1.5M. They use the money from the fees to pay architects to approve home changes, rent an office, and pay for a small staff. So.. while we do not have a common area there is a lot of money moving around.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BrianP19 on 01/09/2024 3:08 PM
Posted By ElleN on 01/09/2024 2:54 PM
Posted By BrianP19 on 01/09/2024 1:51 PM
my main question is trying to figure out why the protections under DS don't exist for non-DS hoas.
[snippage]

Does your HOA have dues? If so, for what do these dues pay?


Correct. Currently our HOA collects fees when you want make changes in your house (paint color, windows, etc). In the past, we've had special assessments but not currently. The HOA has hundreds of thousands of dollars in the bank and has stated a goal of $1.5M. They use the money from the fees to pay architects to approve home changes, rent an office, and pay for a small staff. So.. while we do not have a common area there is a lot of money moving around.
Does your HOA's board prepare an annual budget and share it with owners?

Does each owner pay a fixed amount each year (or each month)? Or do owners only pay something when they want to change their house?

For what sort of activities did past special assessments pay?

Does the HOA provide garbage collection services? Water? Anything related to infrastructure?
ElleN (Idaho)
Posts: 4,420
Posted:
Brian, does your declaration require a board? Does your HOA's declaration require an incorporated entity that governs the HOA?
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By ElleN on 01/09/2024 3:25 PM
Posted By BrianP19 on 01/09/2024 3:08 PM
Posted By ElleN on 01/09/2024 2:54 PM
Posted By BrianP19 on 01/09/2024 1:51 PM
my main question is trying to figure out why the protections under DS don't exist for non-DS hoas.
[snippage]

Does your HOA have dues? If so, for what do these dues pay?


Correct. Currently our HOA collects fees when you want make changes in your house (paint color, windows, etc). In the past, we've had special assessments but not currently. The HOA has hundreds of thousands of dollars in the bank and has stated a goal of $1.5M. They use the money from the fees to pay architects to approve home changes, rent an office, and pay for a small staff. So.. while we do not have a common area there is a lot of money moving around.
Does your HOA's board prepare an annual budget and share it with owners?

Does each owner pay a fixed amount each year (or each month)? Or do owners only pay something when they want to change their house?

For what sort of activities did past special assessments pay?

Does the HOA provide garbage collection services? Water? Anything related to infrastructure?

No monthly fixed amount right now. We just pay when we do something to our house. Im actually not sure what the special assessments were used for in the past. What is funny is that when you read our actual bylaws from the 1920's... they seem pretty clear that the only fee allowed should be an annual maintenance charge/assessment. I don't think the bylaws actually charge the plan reviews which is the custom now.

"FEES AND DUES of MEMBERS Section 5. No membership fee shall be charged, nor shall members be required to pay at any time any amount to carry an the business of the corporation, except to pay
annually the maintenance charge or assessment, which is or may be made a lien on the respective properties of the members, and such other liens, fees and charges as are set forth, authorized..."

The HOA doesnt provide any services like trash/water. All that comes from the city.

ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By BrianP19 on 01/09/2024 3:45 PM
No monthly fixed amount right now. We just pay when we do something to our house. Im actually not sure what the special assessments were used for in the past. What is funny is that when you read our actual bylaws from the 1920's... they seem pretty clear that the only fee allowed should be an annual maintenance charge/assessment. I don't think the bylaws actually charge the plan reviews which is the custom now.

"FEES AND DUES of MEMBERS Section 5. No membership fee shall be charged, nor shall members be required to pay at any time any amount to carry an the business of the corporation, except to pay
annually the maintenance charge or assessment, which is or may be made a lien on the respective properties of the members, and such other liens, fees and charges as are set forth, authorized..."

The HOA doesnt provide any services like trash/water. All that comes from the city.

What is the title of the document that says the above? Does it actually say "bylaws" at the top?

Is there any other verbiage that defines what the "maintenance charge" is?

Is this "HOA" incorporated? If so, do you have a copy of the Articles of Incorporation?

Does this HOA have a declaration of covenants, conditions and restrictions? The latter is different from "bylaws."

If you want to go to the trouble, redact identifying information from this "HOA's" governing documents (like these "bylaws") and attach them here. Each file can be up to 200 kilobytes in size.

Something does not add up here.
BrianP19 (California)
Posts: 31
Posted:
Quote:
Posted By ElleN on 01/09/2024 4:51 PM
Posted By BrianP19 on 01/09/2024 3:45 PM
No monthly fixed amount right now. We just pay when we do something to our house. Im actually not sure what the special assessments were used for in the past. What is funny is that when you read our actual bylaws from the 1920's... they seem pretty clear that the only fee allowed should be an annual maintenance charge/assessment. I don't think the bylaws actually charge the plan reviews which is the custom now.

"FEES AND DUES of MEMBERS Section 5. No membership fee shall be charged, nor shall members be required to pay at any time any amount to carry an the business of the corporation, except to pay
annually the maintenance charge or assessment, which is or may be made a lien on the respective properties of the members, and such other liens, fees and charges as are set forth, authorized..."

The HOA doesnt provide any services like trash/water. All that comes from the city.

What is the title of the document that says the above? Does it actually say "bylaws" at the top?

Is there any other verbiage that defines what the "maintenance charge" is?

Is this "HOA" incorporated? If so, do you have a copy of the Articles of Incorporation?

Does this HOA have a declaration of covenants, conditions and restrictions? The latter is different from "bylaws."

If you want to go to the trouble, redact identifying information from this "HOA's" governing documents (like these "bylaws") and attach them here. Each file can be up to 200 kilobytes in size.

Something does not add up here.

The text I pasted in came from the bylaws
No definition of maintenance charge.
Yes it is incorporated. I dont have the Articles of Incorporation. Ill look for them.
Yes there are CC&rs.

I can try to attach. The hard part the ccrs is a photo copy of the originals from 1923 and the HOA name is all over it. I can't copy and paste it into ms word to redact.

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