Homeowner’s Association (HOA) Has Standing To Sue Developers.

The developers of an upscale condominium project entered into a parking license agreement, licensing the use of parking spaces appurtenant to the property “for the benefit of the residential homeowners association,” [HOA] but before the homeowners association actually existed. According to the agreement, the license is “perpetual,” “shall be at no cost,” is “irrevocable” and “the terms and conditions of this Agreement shall be covenants that run with the land.” Litigation by the HOA against the developers ensued because, early on, according to the HOA’s pleading, while the HOA was dominated by representatives of the developers, the HOA was stripped of the rights it was afforded under the license agreement, including undertaking a financial obligation for the parking spaces. Finding the HOA lacked standing, the trial court sustained the developer’s demurrer without leave to amend. Giving many reasons, among them Code of Civil Procedure section 1060’s provision that allows any party with an interest in a contract to pursue a declaration of rights as to that instrument when an actual controversy occurs, the appellate court reversed. (Market Lofts Community Association v. 9th Street Market Lofts, LLC (Cal. App. Second Dist., Div. 2; January 7, 2014) (As mod. February 4, 2014) 222 Cal.App.4th 924, [166 Cal.Rptr.3d 469].)