By Philip Walquist, Esq. | Roseman Law, APC
From short-term rentals to home offices, restrictions governing how residential property may be used have become an increasingly important issue for California community associations.
At the same time, home-based senior care and other community-based care services have expanded, resulting in more residential care facilities operating within residential neighborhoods—including communities governed by homeowners associations.
This raises an important question for HOA boards and community managers: Can an association restrict or prohibit a residential care facility under its CC&Rs?
California law significantly limits an association’s ability to do so.
Residential Use Restrictions in California HOAs
Many community association governing documents restrict how a residence may be used. CC&Rs may prohibit business or commercial activity, for example, or require homes to be used exclusively for residential purposes.
When determining whether an activity constitutes an impermissible business or commercial use under an association’s CC&Rs, California courts have considered whether the activity is inconsistent with the residential character of the community. See Eith v. Ketelhut, 31 Cal. App. 5th 568 (2019).
This analysis can be highly fact-specific. Whether a particular activity is consistent with the residential character of a community can depend upon both the nature of the community and the circumstances surrounding the particular use.
However, certain uses receive different treatment because California law expressly classifies them as residential uses. Residential care facilities are one important example.
Are Residential Care Facilities Considered a Business or Commercial Use?
At first glance, a residential care facility may appear to operate as a business. The facility may provide services to seniors, individuals with special needs, or other residents in exchange for compensation.
Nevertheless, California law expressly provides that qualifying residential care facilities are considered residential uses of property.
California Health and Safety Code Section 1566.5
California Health and Safety Code § 1566.5 provides, in relevant part:
For the purposes of any contract, deed, or covenant for the transfer of real property executed on or after January 1, 1979, a residential facility which serves six or fewer persons shall be considered a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.
What Qualifies as a Residential Facility?
California Health and Safety Code § 1502(a)(1) defines a “residential facility,” in relevant part, as:
Any family home, group care facility, or similar facility determined by the director, for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.
A residential facility under § 1502(a)(1) is a type of “community care facility.” California Health and Safety Code § 1502(a) generally defines a community care facility as a facility maintained and operated to provide specified forms of nonmedical residential care and related services.
Read together, these provisions establish that qualifying facilities providing 24-hour nonmedical care to seniors or others requiring assistance may be treated as residential uses despite the commercial aspects of their operation.
Accordingly, an HOA generally cannot enforce a prohibition against business or commercial uses to prohibit a properly qualified and licensed residential care facility that falls within these statutory protections.
Licensing Requirements Still Apply
Residential care facilities must also satisfy applicable licensing requirements. In addition to meeting the statutory definition of a residential facility, the facility must hold a current valid license or special permit when required to legally operate. See California Health and Safety Code § 1569.10.
What About Drug or Alcohol Recovery Facilities?
Alcohol or drug abuse recovery and treatment facilities will generally not fall within the same definition of a “residential facility” under California Health and Safety Code § 1502(a)(1).
However, that does not necessarily mean an HOA may prohibit them.
Federal and state anti-discrimination laws may affect an association’s authority to enforce residential-use restrictions against recovery or treatment facilities. Associations encountering these facilities should therefore consult qualified legal counsel before taking enforcement action.
Can an HOA Treat a Residential Care Facility as a Short-Term or Transient Use?
Many HOA governing documents prohibit short-term rentals or restrict residences from being used for “transient” or “hotel” purposes.
This can create questions when individuals reside in a residential care facility for limited periods. If the residents do not permanently live at the property, can an HOA characterize their occupancy as transient?
For qualifying facilities serving six or fewer persons, California Health and Safety Code § 1566.5 provides that the facility is considered a residential use and its residents are treated as a single family for purposes covered by the statute.
As a result, a properly qualified and licensed residential care facility cannot simply be characterized as a short-term, transient, or hotel use based upon how long individual residents stay at the property.
HOAs Can Still Enforce Other Governing Document Restrictions
California law’s treatment of qualifying residential care facilities as residential uses does not eliminate every HOA restriction applicable to the property.
Residential care facilities remain subject to otherwise applicable covenants, conditions, restrictions, rules, and regulations contained in the association’s governing documents.
For example, associations may continue enforcing valid restrictions concerning:
- Parking;
- Noise;
- Nuisances;
- Littering; and
- Other generally applicable community rules.
Associations should exercise care when enforcing these provisions against a residential care facility. Rules should be applied fairly and consistently to avoid potential claims of discriminatory or unequal treatment.
What Should HOA Boards and Community Managers Do?
California law generally requires community associations to permit qualifying and properly licensed residential care facilities when those facilities fall within applicable statutory protections. However, associations retain the ability to enforce other lawful and generally applicable provisions of their governing documents.
Boards and community managers should therefore review their governing documents to determine whether the association has clear, enforceable rules addressing issues such as parking, noise, littering, and nuisances.
Where necessary, associations should work with legal counsel to update their CC&Rs or rules and regulations. If a residential care facility repeatedly violates otherwise enforceable governing document provisions, the association should consult legal counsel to determine an appropriate strategy for obtaining compliance.
Key Takeaway for California Community Associations
A qualifying residential care facility cannot necessarily be prohibited simply because an HOA’s governing documents restrict businesses, commercial activity, short-term occupancy, or transient uses.
California law treats certain properly licensed residential care facilities as residential uses of property. At the same time, those facilities remain subject to other lawful and generally applicable association rules.
Because residential care facilities can also implicate licensing and anti-discrimination laws, associations should seek legal guidance before pursuing enforcement action based on the nature of the facility or its occupants.
Republished from The Voice with permission of CAI-CA North Chapter.
