Much has changed over the last 30 years. In 1985, the Dow Jones industrial average was at 1500. The Internet’s domain name system was created and its first domain name was registered. The cost of a gallon of gas was 93 cents. Ronald Reagan was our President. The world was a different place. In 2015, the Dow Jones Industrial Average is now at about 18,000, there are hundreds of millions of active Internet domain names, and the cost of a gallon of gas is. . . well that subject is complicated. More significantly to the common interest development (“CID”) industry, the Davis-Stirling Common Interest Development Act, known as the Act, was born 30 years ago.
Remarkably, as signed into law by Governor George Deukmejianin on September 18, 1985, the original Davis-Stirling Act was only 25 pages long. It was a whole lot different than it is today. The original Davis-Stirling Act provided a framework that specifies the various rights and responsibilities of all parties involved with common interest developments. The original Act was amended and revised and added to over 50 times until it was completely redone and reorganized. The Act is now over 100 pages long. For the most part, those additional pages represent the countless hours of collaboration, analysis, research and work that our industry professionals have contributed to improving an already comprehensive and inclusive statutory scheme.
On the 30th anniversary of the Davis-Stirling Common Interest Development Act, we should all celebrate the benefits our industry has enjoyed as a result of the Act and how our industry has improved during the last three decades. As we reflect on the evolution of the Act and our industry, a little information about the history of the Act’s creation is in order.
A great deal of thought and effort went into creating the Act. By way of background, in 1983, the California Legislature appointed a “Select Assembly Committee” comprised of knowledgeable individuals to assist the Legislature in drafting the original Davis-Stirling Act. The Select Committee included several industry professionals, including Emeritus Professor of Law Katharine Rosenberry, several lawyers representing common interest real estate developers, a lawyer representing the perspective of owner associations, title company representatives, bank/lender representatives and community managers, and a senior representative from the California Department of Real Estate.
Professor Katharine Rosenberry was Senior Consultant to the California Select Assembly Committee on Common Interest Developments. In that capacity, she was responsible for chairing two task forces that proposed provisions for the Davis-Stirling Act and corresponding with all individuals that commented on the proposed Act. She was the principle drafter of the Act, and attended all the committee meetings and the hearings of the Assembly and Senate pertaining to Davis-Stirling. (California Law Review Commission, Staff Memo 2003-37, fn. 61.) CID attorney Curtis Sproul was a member of one of the task forces and participated in drafting portions of the Act. He was a member of a task force created by the State Bar of California to assist in drafting the 1980 amendments to the Nonprofit Corporation Code. (Id.)
The Select Committee identified several problems with the previous statutes affecting common interest developments. For example, the laws affecting common interest developments were found in various sections of different code sections. In addition, the statutes treated the different types of common interest developments differently. These were just a few of the issues the Select Committee viewed as being problematic with the pre-Davis-Stirling statutory scheme. The Select Committee collaborated and analyzed the various problems with the statutory scheme and sought to clarify and simplify it, and especially centralize the sections into one part of the Civil Code. The end result was that the Act signed into law in 1985 provided numerous benefits, which included:
1. Consolidation of the statutory scheme.
2. Clarification of the applicable law.
3. Treating the various common interest development types similarly.
4. Addressing many of the operational and management problems by drafting specific statutes regulating governance and maintenance.
5. Providing a uniform set of definitions for all common interest developments.
6. Providing a comprehensive framework that outlines the rights and responsibilities of all parties.
7. Providing clear guidelines on community rules, open meeting rules, imposition and collection of assessments, standards for community managers, budgets and reserve accounts, and dispute resolution.
Since then, the professionals in the CID industry continue to collaborate in an ongoing effort to improve the Act, for the overall benefit of the various parties involved with common interest developments. For example, the Community Associations Institute’s California Legislative Action Committee is dedicated to monitoring and influencing legislation that affects community associations in California. CLAC and other trade groups such as CACM and ECHO are proactive in introducing and advocating for legislation that is beneficial to CIDs and are active in opposing legislation that may have an adverse impact on CIDs.
Moreover, our industry assisted with the passing of the recent 2014 Davis-Stirling Act Reorganization, which sought to make the law applicable to CIDs more user-friendly and easy to understand. The primary purpose of the reorganization was to further clarify the law by using shorter code sections, a separation and regrouping of subjects, and the inclusion of standardized terminology significantly improving an already comprehensive statutory scheme.
As a result of these efforts, residents living in common interest developments enjoy many benefits, including, subject to market conditions, generally higher property values and shared cost on numerous amenities. In addition, community associations save taxpayers millions of dollars every year as a result of maintenance of common areas and services provided that would otherwise be the responsibility of local governments. Volunteer board members also contribute to this cost savings by providing services and direction to community associations.
The CID industry should celebrate the Davis-Stirling Act’s 30th anniversary, our successful evolution and all that we have accomplished. There will always be room for improvement, and we should be optimistic that our next 30 years will bring us the same success we have experienced since the Act’s origination. Happy Anniversary to us all.
Brian D. Moreno, Esq., CCAL is a community association attorney with SwedelsonGottlieb. He has been practicing common interest development law in California since 2003. In 2013, he was the 20th California attorney to be admitted to CAI’s College of Community Association Lawyers. Her serves as co-chair of the Programs Committee for CAI’s Greater Los Angeles Chapter and on the Board of Directors for CAI’s Greater Inland Empire Chapter. He also serves on the National Law Seminar Planning Committee of CAI and is a member of the California Legislation Action Committee’s Public Relations Committee.