California HOA triumphs over ADU law

from Ben ChristopherCalMatters

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Adam Hardesty fought the HOA and the HOA won.

In a court decision issued Friday afternoon, San Diego North County ruled against a Carlsbad apartment owner who tried to convert his garage into a rental unit over the objections of his homeowners association. The decision ends — at least for now — a year-long legal battle centered on whether the state’s housing law, written to make it harder for local residents to reject new developments, also applies to all homeowner associations, the quasi-private governments that enforce neighborhood rules for more than a third of Californians.

During most of the battle between Hardesty and the Mystic Point Homeowners Association, Hardesty served on the association’s board.

The dispute is more than a family drama. Although the California Legislature has spent the past 10 years lifting local restrictions on new housing construction to increase the state’s housing stock amid the affordability crisis, HOA authority often falls into a legal gray area.

In the case of Mystic Point, Hardesty argued that state law of 2019 voids all HOA restrictions on accessory dwelling units – small dwellings located on the same property as a larger existing home. Hardesty wanted to turn his garage into a rental apartment for extra income. The HOA counters that its own ban on using garages for anything other than car storage makes this prohibited.

Hardesty, backed by the opinion of a planner with the state Department of Housing and Community Development, believed the law was on his side and went ahead and broke ground. Shortly after CalMatters report the dispute early last year the HOA filed a lawsuit.

In its court filings, the association argued that while the 2019 law may well prohibit many types of condominiums from imposing restrictions on ADUs, the law does not apply to complex projects like the one at Mystic Point.

He also argued that the law only applies to areas “zoned for single-family residential use.” Since Hardesty’s lot does not allow single-family homes exclusively, but also townhouses and small apartments, it does not apply in this case for that reason as well.

In a highly technical decision with a strong emphasis on syntax and grammar, Superior Court Judge Victor Torres sided with the HOA on both counts. If the Legislature intended to include apartments, it “could easily” have made that language clearer, the judge wrote. “It didn’t.” Similarly, applying the law to Hardesty’s parcel with its mixed-use zoning would be “contrary to legislative intent,” he wrote.

The legal battle has so far been played out without state intervention. Although housing regulators and state attorneys general regularly intervene when local governments cancel a construction project in a way that may violate state laws, they typically do not take similar enforcement actions against HOAs.

In a hearing Friday afternoon, Torres acknowledged the complexity of the case, saying he wished he had a “stronger feeling one way or the other.” He ultimately ruled in favor of the association, but noted that this may not be the end of the legal saga.

“I’m sure I’ll hear more education from the Court of Appeals at some point,” he said.

Hardesty said he would like to appeal the decision but is unable to do so. “What it’s going to take is more time and more money,” Hardesty said in a phone call. “I have time. But money? I think I’m pretty dry.”

He estimates he and his wife have spent more than $100,000 in combined construction costs and legal fees.

In fighting for his right to add a dwelling below his apartment, Hardesty took issue with what many see as a fundamental characteristic of living in an HOA — the ability to restrict how other residents use their land. Economic researchers have found that residences managed by associations tend to be more valuable when bordering areas with weak zoning. In other words, people are often willing to pay more to protect themselves from the possibility of a new apartment in their neighborhood.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.