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Case Law - Use Restrictions

C.L. v. Del Amo Hospital, Inc.

(2021) 992 F.3d 901 In a case involving a challenge under the ADA, U.S. 9th Circuit Court of Appeals' held that a treatment center could not require that the service animal be certified by an accredited entity in order to qualify as a “service animal.”

Brown v. Montage At Mission Hills, Inc.

(2021) 68 Cal.App.5th 124 Civil Code §4740 provides that an owner shall not be subject to a governing document provision that prohibits rentals unless that governing document provision was effective prior to the date the owner acquired title to their separate interest. Montage at Mission Hills adopted a short-term rental restriction imposing a 30-day minimum rental period. A homeowner challenged the short-term rental restriction as it applied to her, since she had acquired title to her unit before the short-term rental restriction had been adopted. The association argued that since the short-term rental restriction merely placed a restriction on the duration of rentals without prohibiting rentals, Civil Code §4740 was inapplicable and the provision applied to all owners regardless of when they acquired title. An appellate court disagreed and held that short-term rental restrictions are only enforceable against owners who take title after the effective date of the restriction.

Eith v. Ketelhut

(2018) 31 Cal.App.5th 1 This case involved a vineyard planted on a residential lot in the Los Robles Hills Estates Homeowners Association in Thousand Oaks, CA. The owners regularly harvested the grapes, which were then transported to an offsite processing plant to be made into wine. The wine was then stored at a separate offsite facility. The owners set up a website and social media accounts to advertise and sell the wine. The association's CC&Rs provided, “No lot shall be used for any purpose (including any business or commercial activity) other than for the residence of one family….” The CC&Rs also provided that “[f]or good cause shown … deviations from the applicable restrictions” may be allowed “to avoid unnecessary hardships or expense, but no deviation shall be allowed to authorize a business or commercial use.” The court held that the “operation of the vineyard is not prohibited business or commercial activity because it does not affect the community's residential character.” Accordingly, in order to enforce a restriction against business or commercial uses, simply pointing to an applicable provision of the CC&Rs may not be sufficient. Associations should be prepared to demonstrate how the use affects the residential character of the community.

Sui v. Price

(2011) 196 Cal.App.4th 933 This case involved vehicle and parking rules adopted by an association. In examining the reasonableness of the rules, the court applied the same “reasonableness” test that had been applied to use restrictions in CC&Rs in the case of Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361. Accordingly, whether a rule is reasonable is to be determined not by reference to facts that are specific to the objecting homeowner, but by reference to the common interest development as a whole, and a rule will generally be considered “reasonable” unless it is wholly arbitrary, violates a fundamental public policy, or imposes a burden on the use of the affected property that far outweighs any benefit.

Colony Hill v. Ghamaty

(2006) 143 Cal.App.4th 1156 Associations can require that units be used solely for single-family dwelling purposes.  The Court found that the homeowner violated that use restriction provision of the Association's CC&Rs by renting portions of his unit to separate, unrelated individuals that did not have any familial relationship with each other nor functioned as an “integrated economic unit”.

Liebler v. Point Loma Tennis Club

(1995) 40 Cal.App.4th 1600 Associations may enact rules to deny non-resident owners access to the Association's common area facilities. The court held that the Association can require owners to give up their right to use the common area facilities and assign the right to their tenants.

Nahrstedt v. Lakeside Village Condominium Assn.

(1994) 8 Cal.4th 361 According to the California Supreme Court, CC&R restrictions are presumed reasonable and will be enforced uniformly against all association members unless the restrictions are arbitrary, impose burdens on the property that substantially outweigh the restriction's benefits to the development's residents, or violate a fundamental public policy.


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