THE GLEN OF PACIFIC GROVE HOMEOWNERS ASSOCIATION

Reprinted from the 8/27/06 Davis-Stirling.com Newsletter, a publication of ADAMS & KESSLER LLP

SOME CASE LAW REGARDING RENTAL RESTRICTIONS

CALIFORNIA CASES

City of Oceanside v. McKenna (1989) 215 Cal.App.3d 1420. Restrictions on leasing and the requirement imposed on owners to occupy their units are rationally related to the purposes set forth in the CC&Rs.

Laguna Royale Owners Ass'n v. Darger (1981) 119 Cal.App.3d 670. As long as rental restrictions are reasonable they will be upheld by the courts. Restrictions are reasonableness if: (i) rationally related to the protection, preservation or proper operation of the property; and (ii) exercised in a fair and nondiscriminatory manner.

Ritchey v. Villa Nueva Condominium Ass'n (1978) 81 Cal.App.3d 688, 695. Amendment restricting leasing to persons 18 years of age and older was reasonable and was retroactively enforceable against a condominium owner. 

NON-CALIFORNIA CASES

Woodside Village Condominium Association, Inc. v. Jahren (Fla. 2002) 806 So.2d 452. Upheld a leasing restriction that barred owners from leasing during the first 12 months of ownership and limited leasing to not more than nine (9) months in any twelve month period.

Shorewood West Condominium Ass'n. v. Sadri (1998) 92 Wash.App. 752. Restricting leasing to those units which were already leased is reasonable. However, the restriction must be in the CC&Rs.

Apple II Condominium Association v. Worth Bank and Trust (1995) 277 Ill.App.3d 345. An association may amend its CC&Rs to prohibit leasing, provided it uses proper procedures to pass the amendment.

Worthinglen Condominium Unit Owners' Ass'n v. Brown (1989) 57 Ohio App. 3d 73. Ohio case involving condominium amendment prohibiting leasing.

Hill v. Fontaine Condominium Ass'n (1985) 255 Ga. 24, 334 S.E.2d 690. A duly adopted amendment either restricting occupancy or leasing is binding upon condominium unit owners who bought their units before the amendments were effective.

Franklin v. Spadafora (Mass. 1983) 447 N.E.2d 1244. Upheld leasing restrictions that discouraged purchase for investment by limiting to two the number of units that could be owned by one person.

Breene v. Plaza Tower Ass'n (1981) 310 N.W.2d 730 732-33. North Dakota case involving prohibition of leasing in both declaration amendment and bylaw.

White Egret Condominium, Inc. v. Franklin (Fla. 1979) 379 So.2d 346. Upheld rental restrictions as reasonable for the operation and protection of the owners of condominiums.

Seagate Condominium Association, Inc v Duffy (Fla. 1976) 330 So.2d 484. Upheld restriction on leasing for investment.

Hidden Harbor Estates, Inc. v Norman (Fla. 1975) 309 So.2d 180. CC&R amendment that owners were limited to a single rental during their tenure was valid and was not a reasonable restraint on alienation.

Kroop v. Caravelle Condominium, Inc. (1975) 323 So. 2d 307. Restriction that owners may lease their units only once during their lifetime is valid.

McElveen-Hunter v. Fountain Manor Ass'n, 386 S.E.2d 435. North Carolina case involving condominium declaration amendment restricting leasing.