Orchard Estate Homes, Inc. v. Orchard Homeowner Alliance

244 Cal. Rptr. 3d 23, 32 Cal. App. 5th 471
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 29, 2019
DocketE068064
StatusPublished
Cited by3 cases

This text of 244 Cal. Rptr. 3d 23 (Orchard Estate Homes, Inc. v. Orchard Homeowner Alliance) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orchard Estate Homes, Inc. v. Orchard Homeowner Alliance, 244 Cal. Rptr. 3d 23, 32 Cal. App. 5th 471 (Cal. Ct. App. 2019).

Opinion

RAMIREZ, P. J.

*473Orchard Estate Homes, Inc., is a 93-unit planned residential development, governed by covenants, conditions, and restrictions (CC&R's), supplemented by rules and regulations prohibiting short term rentals of units for durations of less than 30 days. When Orchard's homeowners association attempted to enforce this rule against an owner who used a unit for such purpose, a lower court ruled the rule was unenforceable because it was not contained in the CC&R's. Orchard put the issue to a vote to amend the CC&R's. After balloting was completed, approximately 62 percent of the owner-members of the homeowners association voted to prohibit short term rentals, but the percentage was less than the super-majority required to accomplish the amendment.

Orchard then filed a petition pursuant to Civil Code section 4275 seeking authorization to reduce the percentage of affirmative votes to adopt the amendment, which was opposed by the Orchard Homeowner Alliance (Alliance), an unincorporated association of owner members, who purchased units for short term rental purposes. The trial court granted the petition and the Alliance appeals, arguing that the trial court erred in ruling that voter apathy was not an element of Civil Code section 4275. We affirm.

*25BACKGROUND

Orchard Estate Homes, Inc., (Orchard) is a homeowners association established in 2004 to manage a 93-unit development located east of Indio, California. The homeowners association and all member-owned lots are encumbered by CC&R's, which may be amended by approval of owners representing 67 percent of the total members and 51 percent of eligible first mortgagees of the association.

In 2011, Orchard adopted rules and regulations prohibiting short term rentals, to supplement the CC&R's. However, a vacation rental provider that *474owned one unit, successfully defended against enforcement of the rules, by arguing that the rules, adopted by Orchard's Board of Directors and not by a vote of the owners, were not a valid amendment to the CCRs. Orchard therefore conducted an election to adopt an amendment to the CC&R's to prohibit short term rentals of less than 30 days.

On November 10, 2016, Orchard sent notices of the election, along with ballots and other materials, to all owner-members of the homeowners association, and on December 13, 2016, when balloting was closed, 85 of the 93 members had cast votes, with the proposed amendment garnering 58 votes in favor, or 62 percent. On February 2, 2017, Orchard filed a petition pursuant to Civil Code section 4275, seeking judicial approval to reduce the percentage of affirmative votes required to amend the CC&R's. The Alliance, a group of owners who purchased units for short term vacation rentals, opposed the petition, arguing that voter apathy had not been alleged or proven, precluding relief. After a hearing, the trial court granted Orchard's petition. The Alliance appeals.

DISCUSSION

The Alliance argues that the trial court abused its discretion in granting Orchard's petition by ruling that voter apathy was not a prerequisite to an order authorizing relief under Civil Code section 4275. We disagree.

Civil Code section 4275 (formerly section 1356) provides in pertinent part: "If in order to amend a declaration, the declaration requires members having more than 50 percent of the votes in the association, [...] to vote in favor of the amendment, the association, or any member, may petition the superior court of the county in which the common interest development is located for an order reducing the percentage of the affirmative votes necessary for such an amendment." ( Civ. Code § 4275, subd. (a).) "The purpose of [the statute] is to provide homeowners associations with the 'ability to amend [their] governing documents when, because of voter apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration. [Citation.] ...' [Citation.]" ( Mission Shores Assn. v. Pheil (2008) 166 Cal.App.4th 789, 794-795, 83 Cal.Rptr.3d 108.)

The statute gives the trial court broad discretion in ruling on such a petition. ( Mission Shores, supra, 166 Cal.App.4th at p. 795, 83 Cal.Rptr.3d 108.) Accordingly, we review for abuse of discretion. ( Quail Lakes Owners Assn. v. Kozina (2012) 204 Cal.App.4th 1132, 1139, 139 Cal.Rptr.3d 389, citing Mission Shores, supra, 166 Cal.App.4th 789, 83 Cal.Rptr.3d 108 ; Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 570, 71 Cal.Rptr.3d 299.) The trial court is not required to make any particular findings when considering such a *475petition; instead, it is sufficient if the record shows that the court considered the requisite factors in making its ruling. ( Quail Lakes Owners Assn., supra , 204 Cal.App.4th at p. 1140, 139 Cal.Rptr.3d 389.) *26The court may grant the petition if it finds all of the following: " 'Notice was properly given; the balloting was properly conducted; reasonable efforts were made to permit eligible members to vote; "[o]wners having more than 50 percent of the votes ... voted in favor of the amendment"; and "[t]he amendment is reasonable." ' " ( Quail Lakes Owners Assn. v. Kozina, supra, 204 Cal.App.4th at p. 1135, 139 Cal.Rptr.3d 389, quoting Peak Investments v. South Peak Homeowners Assn., Inc. (2006) 140 Cal.App.4th 1363, 1366-1367, 44 Cal.Rptr.3d 892 ; see also Civ. Code, § 4275, subd. (c).)

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Cite This Page — Counsel Stack

Bluebook (online)
244 Cal. Rptr. 3d 23, 32 Cal. App. 5th 471, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orchard-estate-homes-inc-v-orchard-homeowner-alliance-calctapp5d-2019.