Seniors Fight Back, Vow to Appeal to California Supreme Court

July 28, 2003

By AHRC News Services

In a stunning decision that leaves homeowners flabbergasted, a California Appellate Court (Fourth Appellate District, Division Two) has issued a tentative ruling that homeowners can be required to pay mandatory dues to a privately owned bingo club and golf course even if they do not own or use it.

Homeowners have vowed to take this to the California Supreme Court. At issue is whether a homeowner association can change its CC&Rs without the consent of all the homeowners to impose a burden on its members, even if some of them do not want it.

Desert Crest is a mobile home park in Desert Hot Springs near Palm Springs. It contains 578 residential lots, and is predominantly inhabited by retirees - residents must be 55 years or older to live there. Many are widows living on fixed incomes, primarily social security. The homes range in value from $15,000 to $40,000. Banks refuse to loan on these depreciating trailer homes.

The developer, OSCA Development Company, built a club house, swimming pool and 9 hole golf putting facility adjacent to the development. It is a business open to the public. It is not part of the homeowner association.

Many seniors questioned whether the membership fees for the country club were mandatory or optional. When some of them refused to pay the $71.50 per month - a sizeable amount for many of them - OSCA sued them and lost in 1998. OSCA appealed, but the appellate court upheld the judgment against OSCA.

According to some seniors, OSCA hired a John Ford to buy a home in the development in order to take over the homeowner association. Ford allegedly initiated a recall of the board. Some seniors state that they have copies of checks from OSCA to him for the recall.

When Ford took over the association, he then had the law firm of Peters and Freedman draw up an amendment to the CC&Rs requiring members to pay membership fees to the OSCA country club. On March 21, 1999, the members voted on the amendment. 300 approved it and 213 opposed it. Some of those opposed to it raised questions as to the validity and accuracy of the vote.

In October 2000, OSCA filed suit against some of the homeowners who were not paying the dues to the country club. In 2002, a superior court ruled in favor of the defendants. It stated that the CC&Rs could not be amended to impose mandatory membership in the country club without the agreement of all the members. OSCA appealed this decision. The tentative decision just released by the appellate court reverses the superior court decision.

Many of the affected homeowners are devastated. One said that he has lost all faith in the judicial system after this decision. Another said that the decision boggles the mind. In effect, he said, the appellate court is saying that membership in the country club is a benefit to those homeowners who do not want to belong to it or use its facilities. Many homeowners are in their 80's and 90's. He said that for the court a burden is apparently a benefit.

Some observers note that if this decision stands, its potential impact is explosive. Homeowner associations would now be able to amend CC&Rs to impose significant financial burdens on all members with only a majority vote. They say that this is further evidence that homeowner associations are a train wreck guaranteed to happen. As more and more people realize the terrible consequences that membership in a homeowner association can bring, the more people will shun them.

The focus now shifts to the California Supreme Court. It is discretionary with the Supreme Court whether it hears the appeal or not. With more than 6 million Californians now living in homeowner associations, this may be a compelling reason for the court to hear the appeal.