One question we are asked from time to time, is whether or not a client should record CC&Rs (Covenants, Conditions & Restrictions) on their project. The answer is often also a question: Does the local agency require that CC&Rs be recorded? Depending upon the type of community being created, it may be that no CC&Rs are required at all.
The Department of Real Estate’s Glossary of Common terms defines CC&Rs as “…the basic rules establishing the rights and obligations of owners of real property within a subdivision …. in relation to other owners within the same subdivision and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.”
Depending upon what type of community is being developed, CC&R’s may be a requirement. For example, if the development is a “common interest” community (including common area, or common interests to be shared amongst the lot/unit owners), then definitely, CC&Rs are required.
Other types of developments, like single-family detached homes, do not typically require CC&Rs. In those communities, the CC&Rs become more of a marketing tool, which addresses items that may be viewed as enhancements to the community. Examples might be a Use restriction, prohibiting outdoor laundry drying, or architectural restrictions, prohibiting basketball hoops affixed to the residences, or extreme paint colors or yard plantings. Enforcement of these restrictions is provided for in the CC&R document, often requiring a committee of owners to pursue enforcement remedies.
For common interest developments, CC&Rs are a requirement because they are the controlling document for the operation of the common areas or common ownership structure. In addition to the architectural rules in the single-family developments discussed above, the CC&Rs for common interest projects define the common areas and common ownership structure and establish the basic rules of how the homeowners association will operate and maintain the common area. The document includes provisions for levying assessments against the various owners, and sets out how the assessments are collected, fines assessed, etc. The document also includes basic requirements for how future phases will be annexed to the development.