Nahrstedt v. Lakeside Village Condominium Association, Inc.

878 P.2d 1275 (1994)

• Nahrstedt bought a condo in Lakeside Village. It clearly stated in the homeowners agreement (aka the declaration) that there was a restriction against keeping pets. Nahrstedt sued to enjoin the homeowners' restriction.
• She wanted to keep Boo-Boo, Dockers, and Tulip.
• The Trial Court dismissed Nahrstedt's complaint on a demurrer. Nahrstedt appealed.
• The Appellate Court reversed. Lakeside appealed.
• The Appellate Court found that Lakeside could only enforce the restriction if it could be proven that Nahrstedt's cats would interfere with the other homeowners' right to the quiet enjoyment of their property.
• The California Supreme Court reversed.
• The California Supreme Court found that, under the California Civil Code (1354), courts are required to enforce "covenants, conditions, and restrictions" (CC&Rs) contained in the declaration unless they are unreasonable.
• The Court held that unreasonable meant, "wholly arbitrary, violate in fundamental public policy, or impose burdens on the use of land that outweighs any benefit."
• In addition, reasonable means reasonable to the entire condominium association, not necessarily reasonable to an individual owner.
• The Court felt that there was a social good in allowing enforceable CC&Rs.
• In addition, unless a blanket rule was promulgated that it was very difficult to invalidate CC&Rs, then everybody would start suing, and the burden on both homeowner's associations and the court system would be unreasonable. Therefore there was a social good in making the CC&Rs very hard to invalidate.
• The Court also pointed out that the Lakeside homeowners can modify their CC&Rs with a vote. So if Nahrstedt really had a problem she should take it up at the next homeowners' association meeting.
• The covenant in this case went a little further than a typical covenant. Here, the covenant created a "managing board" with the power to adopt and change rules for the entire community. Here, the covenant is more like a Constitution; it lays out the basic concepts and creates a governing board capable of writing, modifying, interpreting, and adjudicating the rules.
• Courts have generally found that rules created by managing boards after people move into a community should be held to a higher standard of "reasonableness" than rules that were in the original covenant.
• If the "no pets" rule had not been something in the original declaration, but instead was something that was later adopted by the managing board, Nahrstedt could have argued that the should be less enforceable.
• Of course, what happens if the "no pets" rule was not in the original declaration, but had been adopted prior to Nahrstedt's moving in? Should the rule be held to a higher standard than if it was in the original declaration, or should it be considered the same as the original declaration because Nahrstedt had full knowledge of the rule when she decided to move in?
• Typically, courts have said that all rules that passed after the first person moved in are held to the same standard for everybody.
• If so, then different residents would be held to different standards based on when then moved in! You'd no longer have a common interest community.
• What if Nahrstedt had been living there, and the managing board changed the rules? Would Nahrstedt be able to argue reliance or that the board should be estopped from enforcing the rule because she's got the equivalent of a non-conforming use?
• Conversely, it might be argued that Nahrstedt knew that joining a common interest community could result in new rules being created, so she had no reason to assume that there'd never be a no pets rule.