§ 35.01 A New Model of Home Ownership [577-578]

 

An increasing number of Americans live in a common interest community or CIC, where their properties are subject to comprehensive land use restrictions administered by private associations.  Yet the benefits of such communal living are possible only by the surrender of individual freedom.

 

§ 35.02 Types of Common Interest Communities [579-580]

 

In a condominium, each owner (1) holds fee simple title to an individual unit (usually a cube of airspace); and (2) also owns an undivided interest in the common areas of the development (e.g., the building, recreational facilities, parking lot) as a tenant in common.  The planned unit development is a broad category that includes a variety of residential developments, ranging from a small cluster of tract houses to a “gated community.”

 

§ 35.03 Restrictive Covenants and the Common Interest Community [580-586]

 

                        [A]       Role of the Declaration

 

A common interest community is usually created through a document called a declaration.  It imposes binding restrictions—usually enforceable as real covenants or equitable servitudes—on all units in the project.  These restrictions are known in many regions as covenants, conditions, and restrictions or CC&Rs; in other areas they are just called covenants.

 

                        [B]       Validity of Covenants

 

CIC covenants are presumed to be valid.  Yet a growing minority of courts will invalidate such a covenant if it is arbitrary, violates a fundamental constitutional right, or violates public policy.  See, e.g., Nahrstedt v. Lakeside Village Condominium Association, 878 P.2d 1275 (Cal. 1994).

 

§ 35.04 The Owners Association [586-588]

 

Every CIC is governed by an owners association; the powers of the association are usually exercised by a board of directors or similar group.  The board is typically responsible for functions such as maintaining the common area, hiring staff, enforcing the covenants, collecting monetary assessments from the owners, and so forth.  There is a split of authority on the appropriate standard for review of association decisions when a unit owner sues.  The majority approach holds the association to the standard of a reasonably prudent person under the same circumstances.