Members of HOAs (Homeowner Associations) and directors of HOA boards in California all need to keep in mind that rules and regulations affecting property use, additions, and alterations are subject to a statute of limitations. That is, if the rules aren’t enforced against a violation within a stipulated time, the Association may lose its ability to enforce them. Conversely, just because an HOA does not promptly act to enforce its rules against a violation, it still may do so later as long as it acts within the prescribed time limits.
All of this was vividly illustrated in a case (Pacific Hills Homeowners Association v. Jon L. Prun et al.) that came before California’s Fourth Appellate District Court of Appeal.
John and Linda Prun owned a house in a development that is subject to the covenants, conditions, restrictions, and architectural guidelines adopted by the Pacific Hills Homeowners Association. The CC&Rs allow the HOA to adopt reasonable rules and incorporate them into the CC&Rs. Among the rules so adopted were architectural guidelines that limit fences to 6 feet in height unless they are within 20 feet of the front property line, in which case the maximum height is 3 feet. These guidelines, along with many other rules, were adopted by the HOA but not recorded as part of, or as an amendment to, the recorded CC&Rs. This is a common practice. Many rules and regulations adopted by HOAs are not recorded. Also adopted, but not recorded, was a rule requiring that any construction required the “prior written approval of the Architectural Committee.”
The exact timeline and content of events that transpired is somewhat murky. Sometime in late 2000 the Pruns decided to erect a mechanical gate, connected to a fence and pilasters, across their driveway. Some contacts were made with the HOA Architectural Administrator; but, prior to receiving any approval from the Architectural Committee, construction of the gate began.
The Pruns received a letter telling them that they were in violation because their plans had not been approved. A variety of letters and submissions of plans went back and forth. In mid-February of 2001 the committee denied approval of the fence and gate because it did not comply with setback requirements. But, by then the gate was completed.
More letters, some involving lawyers, went back and forth. Still, nothing happened. Finally, in April of 2005, the HOA filed suit seeking injunctive relief. The Pruns did not contest the fact that the gate violated the rules with respect to height and setback. Rather, among other things, they argued that it was too late for the HOA to bring such an action. They relied on Code of Civil Procedure section 337 which in part says that the statute of limitations is four years for “an action upon any contract, obligation, or liability founded upon an instrument in writing…”
But the Orange County Superior Court rejected the Prun’s position, holding that the applicable Code of Civil Procedure section in this case was #336 which states a five year statute of limitations for “an action for violation of a restriction, as defined in Section 784 of the Civil Code.” Andthat </>section, #784, defines a restriction as “a limitation on, or provision affecting, the use of real property in a deed, declaration, or other instrument…”
The Pruns appealed, arguing that the section 784 definition of restrictions only applied to recorded restrictions; and the architectural guidelines of Pacific Hills Homeowners Association were not recorded. But the Court of Appeal rejected this argument and confirmed the judgment of the Superior Court. The Court’s position was simply that the plain language of the code section did not indicate that it only applied to recorded restrictions, and that if the legislature had intended that, it surely could have said so. Hence, the five year statute of limitations stands.
There are probably two “take aways” from this case. An HOA has only five years to act to enforce a restriction; and, an HOA has fully five years to act before enforcing a restriction.
Written by Bob Hunt who is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way. Written for www.RealtyTimes.com Copyright © 2014 Realty Times All Rights Reserved.