In an unpublished opinion, the California Court of Appeal for the Third
District ruled in favor of an association when a member attempted to challenge
a rental restriction policy adopted in an amendment to the CC&Rs.
Reynolds v. Auburn Country Villa Homeowners Association, 2013 WL 5838118.
The Association originally permitted owners to rent their condominiums,
but after obtaining approval from a majority of the membership in 2003,
the CC&Rs were amended to limit the number of rental units allowed.
The amendment also provided for exemptions from the restriction based
on demonstrated hardship. Reynolds, a trustee for the trust holding title
to one of the Association's condominiums, sought to enjoin the Association
from enforcing the rental restriction amendment.
The trial court sustained the Association's demurrer on the ground
that the action was barred by the four-year statute of limitations set
forth in Code of Civil Procedure 343; the amendment was recorded in 2003,
and Reynolds' complaint was not filed until 2009. Furthermore, the
court found the rental restriction to be reasonable and not in violation
of public policy.
On appeal, Reynolds contended that the rental restriction was void
ab initio. However, she failed to state any facts or analysis to establish that
argument. The court reinforced the idea that "use restrictions contained
in the CC&Rs of a common interest development are enforceable unless
unreasonable." Additionally, Reynolds argued that the trial court
erred in awarding attorneys' fees to the Association. In reviewing
the order granting attorneys' fees, the appellate court found that
both Civil Code 1354(c) [now 5975(c)] and Civil Code 1717 entitled the
prevailing party to recover its fees incurred during the lawsuit. The
Association was deemed the prevailing party because it was successful
in its demurrer to Reynolds' complaint, and therefore, was correctly
awarded its attorneys' fees under the Civil Code.