Terminology: Does It Matter?

As a lawyer, I would have to plead “guilty” to being persnickety (to use a Latin term) regarding the correct use of legal terms. In the world of common interest developments there are a number of common terminology which are not only inaccurate, but can promote misunderstanding.

Homeowner Association

This very common term actually does not appear anywhere within the Davis Stirling Common Interest Development Act. The Act refers repeatedly to “common interest developments” (CIDs). Calling them homeowners associations would exclude the many non-residential CIDs throughout the state, and “mixed-use” projects consisting of both business units and residential units (and, more recently, “live-work” units).

The term “homeowners association” can be found only in two places in the entire Civil Code – in Section 714, regarding installation of solar systems, and in Civil Code Section 2924b(f)(1), regarding a CID’s request for notification of a foreclosure sale. [This column is often called “HOA Homefront”, because if I used the legally correct term, “CID”, nobody would know what it was!]

Planned UNIT Development

The term “P.U.D.” is so widely used, I despair of ever stamping out the term, which doesn’t actually exist in California (it does in other states). The Davis-Stirling Act identifies four varieties of CID, one of which is the “planned development”, and nowhere does the Act insert the word “unit” in the middle. A “unit” is the separate interest a condominium owner occupies. The interest of a planned development owner is called a “lot”.

Amazingly, even though the terminology isn’t recognized as a type of CID in our state, there are two different laws which use the term — the statutes regulating “shared appreciation” loans (Civil Code Section 1917.030-1917.334) and a law regarding mobile home parks, the “Mobile Home Residency Law” (Civil Code Sections 798-798.14).

Townhome/Townhouse

The terminology “townhouse” is often used to describe residences in which neighbors live side to side but not over one another. Many CIDs even include “Townhouse Association” in their name. However, the term “townhome” and “townhouse” cannot be found anywhere in the entire Civil Code. That is because the term is not a legal term, but is visual or architectural in nature.

A townhouse-style residence could be a condominium, a stock cooperative, a community apartment or even a planned development. It could also be none of those, and simply a building with some other less formal type of shared ownership. What determines the legal interest someone owns has nothing to do with the appearance or configuration of the building. Legal ownership is defined by the legal description of the property and other recorded documents affecting ownership interests.

Rules 

Many of my clients have long-standing policies or practices which they call “rules”, but are they legally rules? According to the Davis-Stirling Act, rules are adopted by the board using a specific process. Are the rules published? Are they distributed to new owners along with the CC&Rs and Bylaws? Otherwise, they may not be rules, but only practices or customs of the association. If the rule was adopted in recent years, was the proposed rule change disseminated to the members at least 30 days before the board meeting at which the rule change was adopted? If not, it may not be a “rule” recognized by the law.

Use the correct terminology. If we work together, we can reduce confusion. Then, someday, maybe “CID Homefront”?

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.