An HOA, through its board of directors, has a duty to enforce its governing documents. (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 373-374, 380-383.) The enforcement of CC&Rs must be “in good faith, not arbitrary or capricious, and by procedures which are fair and uniformly applied.” (Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600, 1610; Nahrstedt, supra, 8 Cal.4th at p. 383; Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App 3d 642, 650-652.) “This statutory presumption of reasonableness requires that recorded covenants and restrictions be enforced “‘unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit.’” (Market Lofts v. 9th Street Market Lofts (2014) 222 Cal.App.4th 924.)
Although a homeowners’ association has discretion to decide whether, and in what manner, to enforce the governing documents, this discretion must be exercised consistent with its fiduciary duties and the plain language of the CC&Rs. (Ekstrom v. Marquesa at Monarch Beach Homeowners Assn. (2008) 168 Cal.App.4th 1111, 1121-25; Ritter & Ritter, Inc. Pension & Profit Plan v. The Churchill Condominium Association (2008) 166 Cal.App.4th 103, 122.)
HOAs “must exercise their authority to approve or disapprove an individual homeowner’s construction or improvement plans in conformity with the declaration of covenants and restrictions” and that they must do so in good faith, consistent with their fiduciary obligations to the homeowners. (Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 650-51; see also Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 383.)
When an association seeks to enforce its CC&Rs to compel an act by one of its owners, the association must show that (i) it followed its own standards and procedures prior to pursuing such a remedy, (ii) those procedures were fair and reasonable, (iii) its substantive decision was made in good faith and was reasonable, not arbitrary or capricious.
So what does that mean for homeowners? It means courts will not enforce an equitable servitudes which restrictions are arbitrary, that is, bearing no rational relationship to the protection, preservation, operation or purpose of the affected land. Courts will not enforce an equitable servitude if it is made in bad faith, arbitrary, capricious, or if it is not enforced fairly and uniformly. It is important to note that the focus is not the reasonableness specific to the objecting homeowner, but reasonableness as to the common interest development as a whole.
Arbitrary:
A decision based on random choice or personal whim. “Willful and unreasoning action, without consideration and regard for facts and circumstances presented . . . bad faith or failure to exercise honest judgment.” -Black’s Law Dictionary
Capricious:
Subject to whim; impulsive and unpredictable.
Arbitrary and Capricious:
“A willful and unreasonable action without consideration or in disregard of facts or law or without determining principle.” -Black’s Law Dictionary
Rational and Nondiscriminatory:
However, when reviewing an association’s decision to compel a homeowner to stop or remove construction, courts require the association show more than just a violation of CC&Rs. (Ironwood v. Solomon.) When a homeowner questions the reasonableness of an association’s action, courts consider:
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