Under Davis–Stirling, a developer of a common interest development is able to create a homeowner association to govern the development. As part of creating the HOA, the developer records a document known as the Declaration of Covenants, Conditions, and Restrictions against the units or parcels within the HOA with the county recorder. Even though it is not a governmental entity, the HOA operates like one in some respects. As recognized by the Supreme Court of California, the Declaration of CC&Rs is the constitution of the HOA and is legally binding upon residents to the extent that it does not conflict with state or federal law. CC&Rs, once properly recorded, are presumed valid until proven otherwise. The California Courts of Appeal have explained the quasi-governmental nature of the HOA: The HOA's board may enact rules which are legally binding upon residents as long as they do not conflict with the CC&Rs or state or federal law. Board meetings, like the boards of government agencies, are generally open to HOA members, with some exceptions. As with government agencies, courts generally defer to the broad discretion HOAs enjoy in discharging their duties. The HOA is also allowed to charge regular fees to homeowners within the development. These are used for functions like paying for security guards and maintaining common areas like corridors, walkways, parking, landscaping, swimming pools, fitness centers, tennis courts, and so on. The HOA can levy fines or sue homeowners for damages and/or injunctive relief to enforce the HOA's rules and CC&Rs.
Background
There were two major historical trends during the 1970s that led to the enactment of Davis-Stirling. First, there was a transition away from the single-family detached home, which had been the dominant residential development paradigm for much of the state's history. California developers traditionally focused solely on building and selling single-family detached homes as fast as possible to make a quick buck. They did not concern themselves with building public amenities like parks. They assumed that city governments would tax new residents to build such things. By the 1970s, developers had mostly run out of good land for such low-density developments and began to focus on building higher-density developments, often on marginal land that had been previously overlooked because it had been considered to be too rugged or too distant from urban downtowns. To make these developments profitable while complying with local density restrictions, they would often build high-density structures on one parcel, such as a condo complex, a cluster of townhouses, or a line of patio homes. They would simultaneously set aside an adjacent parcel to be either left undeveloped as open space or to be developed into a recreational area like a park to benefit and serve the residents of the development. Therefore, developers needed to find a way to ensure that the inhabited parcels benefiting from the adjacent recreational areas would take care of them. Second, the enactment of Proposition 13 by California voters in 1978 severely limited the ability of local governments to raise property taxes. This made local governments increasingly reluctant to approve new residential developments, since they were now uncertain about their ability to provide adequate public services to new residents based on current and future projected revenues. Before approving new developments, local governments began to force developers to privatize all kinds of services which had been traditionally regarded as public goods: street maintenance, street landscaping, sewer service, lighting, security, fire protection, recreational centers, parks, and the like. Developers were compelled to create homeowners' associations which would extract fees and assessments from homeowners to pay for such services. During the early 1980s, the resulting HOA boom revealed the severe limitations of the California laws then applicable to common interest developments. Many HOAs ran into difficulties because they were poorly planned and were only weakly regulated by the Condominium Act of 1963. In the fall of 1984, the California State Assembly convened a Select Assembly Committee to address the crisis. This Committee had four broad objectives in drafting the bill that became the Davis-Stirling Act: consolidate existing statutory provisions; standardize the laws governing common interest developments across the board and make exceptions only as needed for specific types of developments; validate existing practices; and resolve various problems with HOA operations.
Structural summary
General Provisions
Application of Act
Governing Documents
Ownership and Transfer of Interests
Property Use and Maintenance
Association Governance
Finances
Assessments and Assessment Collection
Insurance and Liability
Dispute Resolution and Enforcement
Construction Defect Litigation
Revisions
As of January 1, 2014, Title 6 of Part 4 of Division 2 of the Civil Code was repealed and was effectively replaced by newly-added Part 5 of Division 4 of the Civil Code. The Davis–Stirling Act was completely renumbered and reorganized within the California Civil Code. The reorganization was intended to make the law easier to understand by implementing standardized language, more logical grouping of subjects, and shorter Civil Code sections.
