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Common Interest Development

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Frequently Asked Questions


What is a Common Interest Development (CID)?

A Common Interest Development (CID) is descriptive not only of a certain type of real estate but also of a life-style that is becoming more and more common to the American way of life.  All CIDs are similar in that they allow individual owners the use of common property and facilities and provide for a system of self-governance through an association of the property owners within the CID.

The most common type of association of property owners is the nonprofit mutual benefit corporation.  This is a corporation in which the members of the corporation vote for a board of directors which runs the affairs of the corporation.

Do you have to join the association?

Membership in the association is automatic.  When a person buys land in a common interest development, he/she automatically becomes a member of the association.

What are Covenants, Conditions and Restrictions (CC&Rs)?

The Declaration of the Covenants, Conditions and Restrictions, or CC&Rs, contains the ground rules for the operation of the association.  This governing document identifies the association's common area and responsibilities, explains the obligation of the association to collect assessments, as well as the obligation of the owners to pay assessments.  It also states that the association may sue owners for violations of the rules or failure to pay assessments.  Usually, the CC&Rs will also state the duties and obligations of the association to its members, insurance requirements, and control issues.

How are the CC&Rs enforced?

California laws allow that either the association or an owner in a common interest development may sue in court and ask the court to enforce the CC&Rs.  The law currently requires that, unless an exception applies, prior to the filing of a lawsuit either the owner or the association must offer to engage in some form of alternative dispute resolution process.

What is the purpose of the Bylaws?

As stated above, the CC&Rs generally state how an association is to be operated.  In almost every instance the association, through its board of directors, has the ultimate responsibility for managing the association.  Since the association is usually a corporation, the Bylaws establish the rules by which the corporation will be run.  These usually include such aspects as how members vote for the board of directors, the number and term limit of members of the board of directors, the duties of the board, the duties of the officers, and other incidental provisions.


CIDs are subject to the Davis-Stirling Common Interest Development Act which is designed to provide property owners with a system of self-government and dispute resolution.

The Attorney General has the authority under Corporations Code Section 8216 to intervene on behalf of members of a non-profit mutual benefit corporation (such as a landowners’ association) who are denied certain specified rights.  The Attorney General’s intervention would be to send a "Notice of Complaint" letter to the board of directors.

If your association has failed to hold regular meetings of members, failed to allow member access to books and records of the corporation, failed to provide annual financial reports to members, failed to provide a list of names and addresses of members, or failed to provide other specified member rights, you may submit a complaint in writing to:

Office of the Attorney General

Public Inquiry Unit

P. O. Box 944255

Sacramento, CA 94244-2550

Be sure to include an address for the non-profit corporation (landowners’ association) and your own return address.  If action is warranted, you will receive a copy of the "Notice of Complaint" letter sent within 30 days of your complaint.

Who is in charge of the association?

The members who own property in the development are in charge of the association.  During the annual meeting of the membership, all members are invited to officially meet and vote for all or part of the board of directors which operates the association.  The board of directors' job is to preserve, enhance and protect the value of the development, but it answers to the members.  It is not unusual for the board to contract with a professional management company to run the day-to-day affairs of the association.

What is the board of directors and how are its members elected?

The board of directors governs the association.  Its members are elected yearly or less frequently, depending upon the terms mandated in the Bylaws of the association.  The Bylaws also determine the number of directors.  Directors are elected by the members (owners of property) of the association who vote for vacancies as they occur.

How can you serve on the association's board of directors?

There are two ways to become a member of the board of directors.  The first is to request that the association place your name on the election ballot so that other members of the association will have an opportunity to vote for you at the next annual meeting.  The second way is to request that the board of directors consider appointing you to any interim vacancy on the board.

What are the responsibilities of the board of directors?

The board has the ultimate responsibility for operating the association.  That means it makes sure that the association's money is collected, its bills are paid, the association is operated efficiently, and violations of the rules of the association are addressed.  For example, the board is responsible for reviewing the association's bank statements, preparing a budget, and distributing the budget (or budget summary) to the members prior to the beginning of the association's fiscal year.  The board must also prepare a fiscal year-end financial statement for distribution to the members.  There are numerous other things for which the board is responsible, as set forth in the association's CC&Rs, Bylaws, the Corporations Code and the Davis-Stirling Common Interest Development Act.

Are there other opportunities to volunteer in the association besides the board of directors?

An association may have a number of committees that perform valuable functions.  The committees consist of volunteer property owners.  The specific number and types of committees are usually determined by the association's Bylaws, CC&Rs, and/or the board of directors.

How does the association pay its bills?

Each association has a budget that is prepared, based on the common area obligations of the development, and distributed to all of its members.  The budget determines how much money the association is going to need to operate for the following year.  The association has the right to bill the members for their fair share of the budgeted amount.  This billing is known as an assessment, which may be paid via monthly invoices, coupons supplied by the association, or some alternative method.  Ideally, the association collects sufficient money through these assessments and pays the bills for the services and goods contemplated in the budget.  If the assessments collected are insufficient to pay the bills, the board of directors is allowed to levy what is known as a special assessment.  Without member approval, the total of special assessments in any fiscal year cannot exceed 5 percent of the gross budgeted expenses for that year.

By paying your fair share of the obligations of the association, through the budget and assessment process, you are paying for the current and long term maintenance obligations of the association.  Of course, all of the other owners are doing so as well.

How is the amount of the monthly assessment determined?

When the budget is prepared, the amounts necessary for the daily operation and long term reserves for maintenance and replacement are determined based on the level of service for which the association is both required and willing to pay.  For example, sometimes there are specific items defined in the CC&Rs that require a certain level of maintenance by the association.  Once the annual amount is determined, then it must be collected from the members in order for the association to operate.  The CC&Rs will normally indicate the frequency of assessment collections.

Are there different types of assessments or fees?

There are several types of assessments that may apply to your association.  The California Civil Code defines assessments as either being regular or special.  Regular assessments are needed for the operating (day-to-day) and reserve (long-term maintenance) activities of the association.

Special assessments are those levied by the association for major repairs, replacement, or new construction of the common area or for a one-time, unanticipated expense which cannot be covered by the regular assessment (e.g., insurance premiums that unexpectedly "sky rocket").

Note:  a special assessment should not be confused with a monetary penalty levied by the association against an individual owner to reimburse the association for an expense such as damage to the common area, or imposed as a disciplinary measure for a violation of the rules and regulations.

Also, some CIDs establish user fees or special charges for uncustomary services and activities.  Typically, they are imposed on an owner specifically benefiting from the service, such as a common garbage dumpster or use of association owned assets.  The fees are usually on a pay as you go basis and generally cannot become a lien on the owner's unit or interest.

Some associations have other types of assessments designated as well.  For example, an association may have what is known as a reimbursement assessment, which is actually a special assessment levied against an individual owner charging them for damage to common property that occurs by virtue of an act by the owner or an owner's guest.

Who can raise the amount of the assessment?

The board of directors can raise the amount of the assessment.  However, the board must follow certain procedures mandated by California Civil Code Section 1366.  Even if the governing documents are more restrictive, the board of directors may not raise the regular assessment more than 20 percent per year, without the approval of the owners.  The board must circulate a budget to the membership no less than 45 days but no more than 60 days prior to the beginning of the fiscal year.  If the budget indicates that an assessment increase greater than 20 percent is necessary, a majority of the members of the association must approve the assessment.  There are also provisions for a board to increase an assessment more than 20 percent without member approval in cases of emergency such as an extraordinary expense required by order of a court, or for repairs to the common area.

What happens if you do not pay your assessments?

Usually, the first thing the association will do is send you a reminder letter.  The law is specific in California regarding the due date of assessments and the overall process that an association must follow regarding delinquent assessments.  The law states that if an assessment is not paid within 15 days of the due date, a delinquency occurs.  At this point, the association can add a charge to your assessment in the form of a late fee in the amount of $10.00 or ten percent of the monthly assessment amount, whichever is greater, unless the CC&Rs specify a lesser amount.  Again, the law covering this area is quite clear and the board must follow these procedures.  Once a year, the association will send each owner a copy of the assessment collection policy, which will tell you the amount of the late fee.  In addition, if your assessment becomes over 30 days delinquent the association has the right to assess interest up to 12 percent per year on the balance which is owed and unpaid.  Furthermore, if you fail to pay your assessments, the matter may be referred to an attorney or foreclosure service.  The association has the right to lien your property for the amounts owed as well as other costs such as attorney's fees.  The association can foreclose and take your property for your failure to pay assessments.  Additionally, a personal judgment may be entered against you for failure to pay your assessment.  As you can see, it is imperative that all owners pay their assessments in a timely manner.  Failure by several owners to pay their assessment obligation could place the association in financial difficulty.

Are there other rules in an association?

An association's board of directors may establish rules and regulations governing issues ranging from where you can park to what you can place on a balcony or deck.  Associations frequently have guidelines and rules which specify the type of landscaping that may be installed or in some instances, not installed.  Rules and regulations can be just as enforceable in an association as the CC&Rs, Bylaws and applicable statutes.  The most frequent type of miscommunication between an owner and the association usually arises from an owner being unaware of the rules and regulations when the association attempts to enforce them.  You can easily prevent such misunderstandings by making certain you have a current copy of the rules and regulations, which may be obtained from the association or the management company.

Can you make improvements to your property?

The answer is generally yes.  However, in addition to the conditions in the CC&Rs, most associations have established rules and regulations which must be followed in order to make any alterations or improvements.  Furthermore, all improvements should be in conformance with applicable federal, state, county, and city ordinances and governances.

Who do you contact if you are having problems with or questions regarding the association common area? Neighbors? Paying assessments?

The first place to look for answers to your questions is the CC&Rs.  Then you should speak to a board member or, if your association has contracted with a management company, they may be able to provide assistance.  The association's common area is managed by the association, so the appropriate contact is either one of the association's board members or, if applicable, the management company.  When there is a dispute between neighbors, sometimes it is best resolved between those owners.  Where a dispute involves payment of assessments or an infraction of the association rules or CC&Rs, it would be appropriate to contact the board of directors and/or the management company.

What is a management company and what does it do?

A management company is a separate business enterprise usually hired to act as the agent of the association.  As an agent for the association, they take their direction specifically from the association's board of directors.  Typical contractual responsibilities of the managing agent include a variety of services to the association, such as: collecting assessments, paying the association's bills, taking direction from the board of directors for enforcement of rules infractions, and obtaining various vendors to perform services.  The managing agent also helps with the budget process and prepares meeting agendas and minutes for the board of directors.  Further, the management company provides assistance to all parties in helping solve problems that can occur in CIDs.  They advise the board of directors on how to comply with relevant California Civil Code requirements and assist with appropriate and timely compliance.  When contracting with a management firm, it is important that the association be willing to pay for the level of services needed.

What happens if you rent your land or home in a common interest development?

Nothing, as long as your tenant does not create a problem in the development.  There is usually no restriction on rentals in a CID.  Some CC&Rs require that a rental agreement acknowledge that the tenancy is subject to all of the rules and regulations of the association.  Some associations' rules and regulations also require that you provide the association with a copy of the rental agreement.  In most associations, the CC&Rs state that the owner of the property being rented is responsible for the conduct of the tenant.  Naturally, it is in the best interest of all parties to prevent problem situations between tenants and owners of other units.  If your tenant damages common areas or creates a nuisance (e.g., loud music or pet problems), the disturbance could become your problem.

What are your individual responsibilities as an owner living in a CID?

Primarily, pay your assessments on time and abide by the CC&Rs and all other rules and regulations which exist for community harmony.

What are your individual rights as an owner of property in a CID?

You have the right to participate in meetings of the board of directors and to be heard.  You have the right to enter into dialogue with your association board of directors with regard to any problem you may perceive in the development.  If a dispute arises between you and the association, subject to certain exceptions, you have the right to go through some form of alternative dispute resolution process before the matter reaches the court system.

Who do I contact when I decide to sell my land or home?

You may wish to contact a real estate professional, the board of directors, the professional management company and/or an escrow company for assistance with the many details.  There are a number of documents that an individual owner is legally required to provide to a prospective purchaser of a unit in a CID.  You will want to make sure that the buyer is aware of the rules and regulations of the association as well as the assessment obligation so there is not a problem or misunderstanding which could jeopardize the sale of your property.


A successful and viable CID is generally one in which property owners assume an active role in the association’s function, not only by attending meetings, voting, and paying dues, but also by taking an active role in the actual functioning of the association by running for the elected offices, serving on committees, and generally participating in group activities.  While the framework of the association is the governing documents, it can certainly be said that the "backbone" of the association is the active and involved membership.

* All information contained herein is sourced from Public Information Brochure, “Living in a California Common Interest Development,” published by the California Department of Real Estate, September 2001.

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Copyright © 2008 Red Bank Oaks Property Owners' Association
Last modified: 02/21/09