Reasons to Amend or Restate Your Association's CC&Rs
Your homeowner association's CC&Rs are evaluated, utilized and relied upon by your board of directors, management company, reserve study provider, mortgage lenders, and every owner, including new buyers.
When CC&Rs are created, they are created by an attorney who is hired by the developer of the community, usually about one year before the homes are sold and copies provided to the original owners.
When the attorney working for the developer, drafts the original CC&Rs, he or she will include provisions from the Davis-Stirling Act, assuming it existed when the CC&Rs were created. The Davis-Stirling Act was written in 1985 and became effective on January 1, 1986. It has been amended every year since that date. The Davis-Stirling Act is the main body of law in California that governs common interest developments, including both condominiums and planned developments. Reasons HOAs amend or restate their CC&Rs include the following:
- They were created many years ago and no longer reflect the current law (Davis Stirling Act amendments). Thus, they are no longer reliable and can result in legal liability.
- They were poorly written making it necessary to regularly obtain legal opinions regarding certain provisions, usually because they are ambiguous.
- They include extensive, obsolete references to the developer and the rights of the declarant which causes confusion. This language can be deleted.
- They fail to require members of the association to carry their own earthquake insurance, homeowner's insurance, or loss assessment insurance, thus increasing the risk to all owners.
- They fail to address who pays the insurance deductible when there is a claim filed involving a unit or lot.
- Who is responsible for maintenance and repairs is unclear, undesirable, or the document does not address adequately certain types of repairs and maintenance.
CC&R amendments and restatements must be drafted by an attorney and approved by the membership utilizing the secret ballot process.
HOA Financial Management Services