Court Opinion

ID: 9906373
Source: CourtListenerOpinion
Date Created: 2023-12-01 21:02:22.542417+00
Date Added: 2024-06-11T09:24:18.709249
License: Public Domain

Filed 12/1/23 Wilen v. The Churchill Condominium Assn. CA2/5
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                      SECOND APPELLATE DISTRICT

                                    DIVISION FIVE

 SETH WILEN et al.,                                               B321696

          Plaintiffs and Appellants,                              (Los Angeles County
                                                                  Super. Ct. No.
          v.                                                      21SMCV00665)

 THE CHURCHILL CONDOMINIUM
 ASSOCIATION,

          Defendant and Respondent.

      APPEAL from a judgment of the Superior Court of Los
Angeles County, Craig D. Karlan, Judge. Vacated and remanded
with directions.
      Lubin Pham & Caplin, Namson M. Pham, and JC
Chimoures for Plaintiffs and Appellants.
      Kulik Gottesman Siegel & Ware, Leonard Siegel, and
Justin Nash for Defendant and Respondent.
       Plaintiffs Seth Wilen (Wilen) and Emily Stewart (Stewart)
are trustees of the Wilen Family Trust (the Trust),1 which holds
title to several guest rooms in a condominium complex. When the
homeowners’ association, The Churchill Condominium
Association (the Association), told plaintiffs they could not rent
out the guest rooms and also restricted guest room occupants’ use
of the complex’s amenities, plaintiffs commenced this action and
moved for a preliminary injunction. In this appeal from the trial
court’s denial of that motion, we are principally asked to decide
whether the challenged rental and amenity restrictions are
consistent with state law and the Association’s governing
documents. We also consider whether there is an actual
controversy concerning another rule that prohibits children
under 13 from living in the complex.

                        I. BACKGROUND
      Plaintiffs own real property in a condominium complex
known as The Churchill, located at 10450 Wilshire Boulevard in
Los Angeles. A certificate of occupancy for the 13-story building,
originally an apartment complex, was issued in 1962. The
building was converted from apartments to condominiums in
1976. As described in the covenants, conditions, and restrictions
(CC&Rs), the building includes 129 numbered units, six of which
are “maid’s room[s] and/or guest room[s].”2
      The complex includes various common areas and amenities.
Among other things, it features a gym, pool, sauna, laundry

1
       For simplicity, we refer to Wilen, Stewart, and the Trust
collectively as “plaintiffs.”
2
      We will call these rooms “guest rooms” for short.

                                 2
room, mailroom, and social room. In addition to a mailroom, the
complex offers a “package acceptance service,” which entails
signing for packages and holding them in storage until picked up.
       Plaintiffs own five units in the building: a 2,204 square foot
unit in which they live and four guest rooms ranging from 225
square feet to 297 square feet.3 As stated by Wilen, plaintiffs
“purchased [the guest rooms] to house household staff and
provide them with quality of life,” but they also “planned to rent
out any extra [guest rooms they] had purchased.”
       This appeal arises primarily from a dispute as to whether
plaintiffs may rent out their guest rooms and whether the
occupants of guest rooms may use complex amenities. The
Association contends its governing documents prohibit owners
from renting out guest rooms and require occupants of such
rooms to be accompanied by homeowners when using common
area amenities. Plaintiffs contend no such rules appear in the
governing documents and further assert that any prohibition
against renting guest rooms would be void under state law. We
shall discuss the parties’ positions in more detail after
summarizing relevant provisions of the governing documents and
state law.

3
       These facts are stated in Wilen’s declaration in support of
plaintiffs’ motion for preliminary injunction. Although the
Association asserted, in its opposition to the motion, that Wilen
and his family lease the 2,200 square foot unit to a tenant and
suggests, in its respondent’s brief, that plaintiffs own five (not
four) guest rooms, neither statement is accompanied by a record
citation.

                                  3
       A.    Overview of Governing Documents
       Plaintiffs’ rights with respect to the guest rooms are set
forth in the CC&Rs4 and Operating Rules5 adopted by the
Association pursuant to its authority under the CC&Rs.6 (As we
will later discuss, however, Civil Code section 4741 provides a
condominium owner shall not be subject to a provision in a
governing document that prohibits or unreasonably restricts the
rental or lease of separate interests, accessory dwelling units, or
junior accessory dwelling units in a condominium development.)
Regulations relevant to guest room rentals are primarily found in
the CC&Rs while regulations relevant to amenities are primarily
found in the Operating Rules.

           1.   Provisions relevant to guest room rentals
     The CC&Rs define several terms fundamental to our
analysis. Among other things, the manner in which

4
     The CC&Rs were first recorded in 1976, amended in 1977,
and amended again in 1998.
5
       Plaintiffs attached Operating Rules adopted in July 2017 to
their complaint and submitted Operating Rules adopted in March
2020 in support of their motion for preliminary injunction.
Because neither party argues the July 2017 Operating Rules
govern this dispute, we discuss only the March 2020 Operating
Rules.
6
      Section 5.1(1) of the CC&Rs empowers the Association “[t]o
conduct, manage and control the affairs of the project and to
promulgate such additional reasonable house rules and
regulations therefor, and to modify and/or amend” the initial
rules attached to the CC&Rs. In the event of a conflict between
the CC&Rs and the Operating Rules, the CC&Rs “shall prevail.”

                                 4
condominium, unit, and guest rooms are defined help answer
whether a guest room should be considered part of a
condominium.
       The CC&Rs define a condominium as “an estate in real
property, consisting of an undivided percentage interest in
common in that portion of the real property made subject to [the
CC&Rs], and which portion is herein defined or designated as
‘Common Area,’ together with a separate fee interest in space in
the building on such real property, together with such other
separate interests in other portions of said real property, as are
granted by [the condominium developer].” A “unit” is defined to
mean “the elements of a condominium which are not owned in
common with the owners of other condominiums in the project.”
Guest rooms are “any of those elements of a condominium, as
more particularly shown on the Condominium Plan . . . as Units 1
to 6 inclusive.”
       The definition of guest rooms states that these rooms
cannot be purchased “without the concurrent ownership and/or
transfer of one or more residential units, i.e.[,] 7 to 129 inclusive.”
The CC&Rs explain that “[t]he purpose of this provision is to
assure that only an owner of Units 7 to 129 inclusive may own a
[guest room] . . . .”
       Subject to various sections prohibiting short-term rentals,
the CC&Rs provide that an owner is “free to sell or lease [their]
condominium.” All leases are required, however, to include an
addendum providing, among other things, that “the property
leased includes the entire Unit . . . .” “Upon the leasing of [their]
Unit, each Member automatically assigns to the lessee the
Member’s right to use the Common Area recreational and

                                  5
community facilities. The Member may not exercise those rights
until he or she re-takes possession of the Unit.”
       The Operating Rules grant the Association broad discretion
to review proposed leases. Operating Rule 5.7 requires owners to
submit a copy of the executed lease and information regarding
the proposed tenant to the Association, which “may approve or
reject a lease and/or lessee for any reason whatsoever as it deems
to be appropriate.”

            2.     Provisions relevant to the use of building
                   amenities by occupants of guest rooms
      The Operating Rules restrict access to certain amenities by
reference to defined terms: “homeowner,” “tenant,” “guest,”
“resident,” and “visitor.” As pertinent here, a homeowner is a
person or entity in whom “title to a Condominium is vested.” A
tenant is “a person who is identified on a lease as the lessee of a
Unit.”7 A guest is “a person other than a family member who is
provided long-term residency in a Unit by the Homeowner or
Tenant and who is registered as such with the Office in writing.”
A resident is “a person (e.g., family member or Guest) who is
provided residency in a Unit by the Homeowner or Tenant,
including the Homeowner and Tenant.” And a visitor is “a
Visitor of a Homeowner or Tenant who is not registered as a
Guest with the Office.”
      The Operating Rules restrict use of the sauna and gym to
“Residents and Guests.” The pool is open to guests and visitors,

7
      The Operating Rules include their own definition of “Unit”:
“‘Unit’ means the element of a Condominium which is not owned
in common with other Owners of other Condominiums.”

                                 6
but only two per unit at any given time. Although there is no
rule expressly limiting use of the mailroom, the building’s
package acceptance service8 is only available to registered
residents. The CC&Rs provide that “[t]he owner of each
residential unit” is entitled to a storage space to be used only by
the owner or a lessee, and the Operating Rules elaborate that
“[e]ach Unit (excluding [guest] rooms) is entitled to one tall
storage locker or both an upper and lower storage locker.”9
       The parking rules are more complicated. Although the
CC&Rs provide that “[t]he owner of each residence shall be
entitled to attendant (valet) parking of not more than [two]
passenger vehicles” belonging to the owner or a tenant, the
Operating Rules note “only 156 parking spaces actually exist.”
“In order to optimize this limited number of spaces,” the
Operating Rules provide, among other things, that assigned
spaces are generally only available to homeowners and tenants,
but guest parking may be granted on a discretionary basis and
visitor parking is available “on a first-come, first-served basis.”
Additionally, “[m]aids and other employees may be granted

8
      As described in the Operating Rules, “[i]f you are not home
or out of town and you are expecting a package via UPS, FedEx,
Mail service or any other carrier, we will accept it and hold it for
you for a 48 hour period in the package storage room, with your
prior written approval.”
9
      The rules concerning the laundry room refer to “Residents,”
but they do so in a manner that is not clearly intended to exclude
other users: “Residents must time the washing and drying cycles
and promptly remove all clothes from the machines once the cycle
has completed.”

                                 7
parking privileges only if they are living on-premises and are
registered with the Business Office.”

            3.     Prohibition of permanent residents under 13
                   years of age
       Although the Association concedes the rule is “outdated”
and “unenforceable,” the CC&Rs provide that “[n]o children
under the age of thirteen (13) may permanently reside in any
unit.” Under the CC&Rs, child visitors “may temporarily reside
or visit in any unit for a continuous period not in excess of two (2)
weeks during any six (6) month period.”

      B.     Plaintiffs’ Lawsuit and Request for a Preliminary
             Injunction
       In April 2021, plaintiffs filed a declaratory relief action
against the Association challenging the ban on guest room
rentals, the restrictions on guest room occupants’ use of
condominium amenities, and the prohibition of child residents.10
Soon after filing suit, plaintiffs moved for a preliminary
injunction that would bar the Association from enforcing these
rules.
       With respect to guest room rentals, plaintiffs argued the
Association has no authority to prohibit renting those rooms
because the CC&Rs and the Operating Rules do not expressly
prohibit renting. In fact, plaintiffs believed the CC&Rs’ provision

10
       Plaintiffs’ complaint alleges causes of action for declaratory
relief, breach of the governing documents and enforcement of
equitable servitudes, breach of the duty of good faith and fair
dealing, and breach of fiduciary duty.

                                  8
stating “each owner is free to sell or lease [their] condominium”
expressly authorizes them to lease their guest rooms. In the
alternative—assuming the governing documents do prohibit
guest room rentals—plaintiffs argued that such a rule would
violate Civil Code section 4741.11 Regarding building amenities,
plaintiffs argued the governing documents do not in fact restrict
guest room occupants’ access to most of the amenities and any
such restriction would be unfair because the condominium
assessments charged for guest rooms are calculated based on the
same formula used to charge assessments for other units.12
Plaintiffs argued the restriction against permanent residents
under 13 years of age is unenforceable because it is both
unreasonable and contrary to public policy.
      The Association opposed the request for a preliminary
injunction. A declaration from the president of its board of
directors, Soheila Aghel (Aghel), asserted that the Association’s
“position has been that owners of the [guest rooms] are not
permitted to lease [them] to tenants.” The Association argued it
was “within its authority to adopt such a rule” because it did “not
contradict the governing documents.” The Association further
argued section 4741 does not preclude its position on rentals

11
      Undesignated statutory references that follow are to the
Civil Code.
12
      Plaintiffs did acknowledge the CC&Rs impose some
limitations on amenity use and accordingly proposed that an
injunction simply bar the Association “from restricting [guest
room occupants] from using Common Area amenities not
specifically afforded to owners of ‘Residences’ or ‘Dwelling Units,’
as defined by the [CC&Rs].”

                                 9
because such rooms are only a portion of a condominium, not a
full condominium unit the owners would be entitled to lease. The
Association submitted a declaration by a planning and land use
expert, Bill Christopher (Christopher), averring that, among
other things, guest rooms “do not constitute dwelling units, and
renting them [would be] a violation of the Los Angeles Municipal
Code, the tract conditions set forth by the City of Los
Angeles, . . . the Association’s CC&Rs, and the Condominium
Plan.”
       Regarding amenities, the Association argued nothing in the
governing documents grants guest room occupants full access to
building amenities and the Association is entitled to require them
to be “accompanied by the homeowner.” The Association
additionally argued plaintiffs “fail[ed] to identify or specify which
purported common area amenities [guest room tenants] should be
entitled to use.” As to children under 13, the Association stated it
“has never sought to enforce” the prohibition against child
residents and characterized plaintiffs’ request to enjoin
enforcement of the rule as “a red herring inasmuch as the central
issue in this matter is whether the [guest] [r]ooms are
rentable . . . .”
       In their reply, plaintiffs argued that regardless of whether
the Association has the authority to bar them from renting guest
rooms, the Association had not adopted a written rule to that
effect.13 Plaintiffs also challenged the Association’s authority to
adopt such a rule under section 4741 and argued the guest rooms
qualify as “separate interests” governed by the statute because,

13
      Plaintiffs also filed 110 pages of objections to the Aghel and
Christopher declarations.

                                 10
pursuant to a related statute, anything not a common area is a
separate interest. Plaintiffs argued Christopher’s opinion that
guest rooms are not dwelling units is irrelevant because guest
rooms qualify as light housekeeping units under local ordinances.

      C.     The Trial Court Declines to Enter a Preliminary
             Injunction
       The trial court denied plaintiffs’ motion for preliminary
injunction based on its finding that they did not demonstrate
they were likely to succeed on the merits of their claims against
the Association.
       The trial court was not persuaded by plaintiffs’ contention
that the CC&Rs’ provision stating an owner “is free to . . . lease
[their] condominium” means an owner may rent out a guest room
by itself. The trial court emphasized the CC&Rs define guest
rooms to be “elements” of a condominium and determined that a
guest room does not qualify as a “condominium” to be leased in
its own right. Extending this reasoning, the court found section
4741 does not prohibit the Association from barring such rentals
because guest rooms “are not separate interests that can be
independently rented . . . .” The trial court also emphasized that
renting a guest room separately from the condominium of which
it is an element would “run afoul of the City of Los Angeles tract
approval conditions,” which capped the number of “approved
dwelling units” in the building.
       The trial court determined the Association could restrict
guest room occupants’ access to building amenities because they
are guests rather than residents under the governing documents.
As to the prohibition on child residents, the trial court
determined plaintiffs had not demonstrated a likelihood of

                                11
success on their claim for declaratory relief because the lack of
any threat of enforcement meant there is no actual controversy.
The trial court further reasoned it is “not clear” that plaintiffs
have standing to pursue their challenge to the rule as a violation
of the Unruh Civil Rights Act (§ 51 et seq.) because “the harm
would presumably be suffered by [plaintiffs’] future, as yet
undetermined, tenants, not [p]laintiffs in their capacity as a
landlord.”
       Having concluded plaintiffs “are unlikely to succeed on the
merits of their claims,” the trial court determined it could deny
the request for a preliminary injunction without need to “consider
the relative harms the parties will suffer in the interim.”14

                          II. DISCUSSION
       We hold the trial court’s ruling on plaintiffs’ preliminary
injunction motion was partially correct.
       The court was right that plaintiffs have not shown any
likelihood of success on their claim that they should be permitted
to lease guest rooms. Plaintiffs’ suggestion that the CC&Rs
authorize guest room rentals because they authorize
condominium rentals fails to address the relationship between
guest rooms and condominiums in the CC&Rs: although there is
no specific rule against guest room rentals, the governing
documents make clear that owners may not rent out only part of
their separate interest—and a guest room is only part of that

14
      The trial court overruled all of plaintiffs’ objections to the
Aghel and Christopher declarations. We do not further discuss
the objections and the trial court’s ruling on them because
neither affect our analysis of the issues on appeal or the balance
of harms to be considered on remand.

                                 12
separate interest that does not qualify as an additional dwelling
unit under section 4741. The trial court was also correct that
there is no actual controversy regarding the CC&Rs’ prohibition
of child residents in light of the Association’s non-enforcement
concessions (plaintiffs’ contention that the Association’s refusal to
enforce the provision exposes it to liability is baseless).
       Plaintiffs’ arguments regarding guest room occupant access
to building amenities are a different story, however. There,
plaintiffs did make a showing that they are likely to succeed on
the merits because nothing in the governing documents suggests
guest room occupants do not qualify (at least) as guests and the
Operating Rules provide for guest access to various amenities
with no requirement that an owner be present. Because the trial
court’s order rested entirely on the erroneous conclusion that
plaintiffs failed to demonstrate a likelihood of success on the
merits, we shall remand for the court to consider, in the first
instance, the balance of interim harms as to that element of the
requested injunction.

       A.    Preliminary Injunction Standards
       “In deciding whether to issue a preliminary injunction, a
trial court must evaluate two interrelated factors: (i) the
likelihood that the party seeking the injunction will ultimately
prevail on the merits of his [or her] claim, and (ii) the balance of
harm presented, i.e., the comparative consequences of the
issuance and nonissuance of the injunction. On appeal, questions
underlying the preliminary injunction are reviewed under the
appropriate standard of review. Thus, for example, issues of fact
are subject to review under the substantial evidence standard;
issues of pure law are subject to independent review.” (People ex

                                 13
rel. Feuer v. Nestdrop, LLC (2016) 245 Cal.App.4th 664, 672
[cleaned up].) When consideration of a single preliminary
injunction factor is the basis for a trial court’s ruling and is found
on appeal to be erroneous, it is “[n]ormally . . . appropriate to
remand the case to the trial court for consideration [of the other
factor].” (King v. Meese (1987) 43 Cal.3d 1217, 1228.)

      B.     Plaintiffs Are Not Likely to Prevail on Their Guest
             Room Rental Claim Because the CC&Rs and
             Operating Rules Prohibit Rentals
             1.     Likelihood of success under the governing
                    documents
       Plaintiffs contend the governing documents (1) expressly
authorize or (2) at least do not prohibit guest room rentals. The
first position rests on their reading of section 25.1 of the CC&Rs,
which provides that an owner is “free to sell or lease [their]
condominium . . . .” The correctness of that view accordingly
depends on whether a guest room is a “condominium” for
purposes of the CC&Rs.
       Section 1.3 of the CC&Rs defines guest rooms to be
“elements” of a “condominium.” Together with this section’s
provision that a guest room cannot be purchased “without the
concurrent ownership and/or transfer of one or more” residential
units, the clear import of this definition is that a guest room is
not a condominium in its own right. Rather, it is only part of the
owner’s separate interest, and thus, not a condominium as
defined in the CC&Rs.
       Plaintiffs alternatively argue that the Association has no
authority to enforce a ban on guest room rentals that is not
expressly prohibited in the governing documents. (§ 1468, subd.

                                 14
(d) [restrictive covenants must be recorded]; § 4350, subd. (a)
[operating rules for common interest development must be in
writing].) We assume for the sake of argument that Operating
Rule 5.7’s provision that the Association “may approve or reject a
lease and/or lessee for any reason whatsoever as it deems to be
appropriate” requires the Association to consider every
application in good faith and does not authorize an unwritten,
categorical ban on guest room rentals. Nonetheless, other
provisions of the CC&Rs do sufficiently evidence a ban on guest
room rentals.
       We read the express authorization of the lease of an entire
condominium as a prohibition against the lease of anything less.
(White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 881, fn. 4
[the “‘“familiar maxim”’” of expressio unius est exclusio alterius
(mention of one thing is exclusion of another) applies in contract
interpretation].) Moreover, several provisions of Article XXVI of
the CC&Rs, entitled “LEASING OF A UNIT,” support the
inference that a lease must include an entire condominium.
       Section 26.4 requires every lease to include an addendum
stating, among other things, that “the property leased includes
the entire Unit . . . .” As we have already mentioned, “unit” is
defined in the CC&Rs to mean “the elements of a condominium
which are not owned in common with the owners of other
condominiums in the project.” This definition does not suggest
that a unit is any one of the elements of a condominium which
are not owned in common with others—rather, the unit (singular)
is the sum of its elements (plural).15 The upshot of this is that

15
       The slightly different definition of “unit” set forth in the
Operating Rules does not apply to the CC&Rs, but to the extent
that it sheds any light on the meaning of the CC&Rs, it does not

                                 15
every lease must expressly provide that the property leased
includes all of the owner’s separate interest. And because the
CC&Rs prohibit anyone from owning only a guest room, this
necessarily means that a guest room cannot be rented out on its
own.
       Other provisions of Article XXVI support this conclusion.
For example, section 26.3 provides that “[n]o Member may lease
his or her Unit for an initial term of less than one (1) year. . . .”
(Emphasis added.) Similarly, section 26.5 provides that an owner
“who leases his or her Unit agrees to indemnify, defend, and hold
harmless [the Association] . . . from all claims which may arise
from the acts or omissions of his or her lessee.” (Emphasis
added.) The same understanding is also reflected in section 26.6,
which provides that, “[u]pon the leasing of his or her Unit, each
Member automatically assigns to the lessee the Member’s right to
use the Common Area recreational and community facilities” and
“[t]he Member may not exercise those rights until he or she re-
takes possession of the Unit.” While plaintiffs contend this
section should be construed to mean that a right to use building
amenities attaches to guest rooms, that reading does not give
effect to the clause restricting use by the lessor during the term of

undermine this construction. To reiterate, the Operating Rules
define “unit” to mean “the element of a Condominium which is
not owned in common with other Owners of other
Condominiums.” The two definitions use the undefined term,
“element,” in different senses. In the CC&Rs, elements are the
constituent parts of a unit, which equates to the owner’s separate
interest; in the Operating Rules, the unit is the separate interest
element of condominium ownership. In either case, “unit” refers
to the entirety of the owner’s separate interest.

                                 16
the lease. The fact that the owner cannot use building amenities
at all until they re-take possession of a rented unit means the
owner of a guest room cannot lease it independently of the rest of
their separate interest.16
       We acknowledge the CC&Rs nominally refer to guest rooms
as “units” when designating them as “Units 1 to 6.” But naming
conventions aren’t everything. Indeed, if they were, the often
used alternative appellation (maid’s rooms) would undermine any
assertion that such rooms can be leased to paying tenants. We
also acknowledge there appear to be instances where the CC&Rs
do use the term “unit” to refer to something less than all of an
owner’s separate interest. For example, in allocating voting
shares, Article V provides that “Class A members shall be
entitled to one vote for each unit (excluding [m]aid’s [r]ooms)
which is subject to assessment . . . .” For the reasons we have
already discussed, however, the parenthetical exception must be
read simply to underscore that a guest room is not a unit in its
own right.
       Because the CC&Rs are properly read to prohibit guest
room rentals, we need not address the Association’s alternative
contention that guest room rentals would violate conditions set

16
       Insofar as plaintiffs would challenge this rationale by
hypothesizing someone who owns two or more condominiums and
is presumably able to continue enjoying the building’s amenities
if they rent out only one, the challenge is unpersuasive.
Ownership of a condominium is a prerequisite for ownership of a
guest room, but ownership of a condominium is not a prerequisite
for ownership of any other condominium. In other words, the
CC&Rs assume that a guest room will necessarily be owned as
part of a condominium.

                               17
forth by the City of Los Angeles when it approved the building’s
conversion to condominiums.

             2.    Likelihood of success under section 4741
       Common interest developments—a category that includes
condominium projects17—are defined and regulated under the
Davis-Stirling Common Interest Development Act (the Davis-
Stirling Act). (§ 4000 et seq.) Plaintiffs’ arguments in this appeal
center on section 4741, subdivision (a)’s regulation of rules
restricting rentals in common interest developments. The statute
provides: “An owner of a separate interest in a common interest
development shall not be subject to a provision in a governing
document or an amendment to a governing document that
prohibits, has the effect of prohibiting, or unreasonably restricts
the rental or leasing of any of the separate interests, accessory
dwelling units [ADUs], or junior accessory dwelling units
[JADUs] in that common interest development to a renter, lessee,
or tenant.” A summary of earlier legislative action is helpful to
understanding the purpose and scope of this provision.
       Legislative efforts to codify a right to rent out housing in
common interest developments began with Senate Bill No. 150
(2011-2012 Reg. Sess.) (SB 150), which created former section
1360.2. That statute stated “[a]n owner of a separate interest in
a common interest development shall not be subject to a provision
in a governing document or an amendment to a governing

17
       Section 4100 defines “[c]ommon interest development” to
include “(a) [a] community apartment project[; ¶] (b) [a]
condominium project[; ¶] (c) [a] planned development[; ¶ and] (d)
[a] stock cooperative.”

                                18
document that prohibits the rental or leasing of any of the
separate interests in that common interest development to a
renter, lessee, or tenant unless that governing document, or
amendment thereto, was effective prior to the date the owner
acquired title to his or her separate interest.” (Stats. 2011, ch.
62, § 2, subd. (a).) This restriction applied only to rules that
became effective on or after January 1, 2012, (Stats. 2011, ch. 62,
§ 2, subd. (f)) and owners remained free to consent to new
restrictions on their right to rent their property (Stats. 2011, ch.
62, § 2, subd. (b)).
       Legislative analyses of SB 150 emphasized owners’ need for
flexibility during a period of widespread financial hardship and
depressed property values. (See, e.g., Assem. Housing &
Community Development Com., Analysis of SB 150 as amended
June 9, 2011, 3 [“Many people need to rent their units because of
job relocation or a personal situation. The ability to rent a unit
has become even more important because of the deteriorating
housing market”]; Sen. Judiciary Com., Analysis of SB 150 as
amended April 25, 2011, 4 [“For those homeowners who are
facing difficult economic times, renting their home and moving in
with a family member is one practical way to generate additional
income to pay the mortgage and avoid a foreclosure”].)
       The Legislature expanded its regulation of restrictions on
rentals in common interest developments with Assembly Bill No.
3182 (2019-2020 Reg. Sess.) (AB 3182). Effective January 1,
2021, AB 3182 removed former section 1360.2’s exceptions for
rules to which owners consented and for those adopted prior to
January 1, 2012. (Former section 1360.2, subdivision (a) is now
codified, with a non-substantive amendment, at section 4740,
subdivision (a).) AB 3182 also added section 4741.

                                19
       In contrast to SB 150, the legislative history of AB 3182
focuses less on the need to protect homeowners experiencing
financial hardship and more on the need to expand the state’s
housing supply. As stated by the bill’s author, “We must marshal
all available resources to address the housing and homelessness
crisis. There are millions of homes across the state that have the
potential to be rented to Californians in need of housing but are
prohibited from being leased under outdated HOA rules. AB
3182 prohibits rental bans in HOAs to allow homeowners who
want to, [to] rent out their homes.” (Sen. Rules Com., Off. of Sen.
Floor Analyses, 3d reading analysis of AB 3182 as amended July
27, 2020, 3.) The bill’s sponsor, California YIMBY, argued “that
HOA prohibitions against tenants act as a prohibition against the
production of important types of housing needed to solve
California’s housing crisis because if that housing cannot be
occupied by a tenant, it is unlikely in many cases to be built.”
(Id. at 5.)
       For purposes of this appeal, we do not need to untangle the
overlapping provisions of section 4740, subdivision (a) and section
4741, subdivision (a).18 It is necessary, however, to discuss some
of section 4741’s other subdivisions. Section 4741, subdivision (b)
provides that a common interest development may cap the

18
       As one treatise remarks, “[i]t would appear that the result
of the adoption of Civil Code section 4741 has led to a confusing
situation. As we read this section along with Civil Code section
4740, as amended, there could be [several] classes of owners in a
project that are subject to different rental restrictions, at least for
a period of time . . . .” (Hanna & Van Atta, Cal. Common Interest
Developments: Law and Practice (2023) § 22:15.) Plaintiffs’
arguments in this case focus solely on section 4741.

                                  20
number of separate interests that may be rented at “25 percent of
the separate interests.” But other subdivisions exempt certain
owners from this cap. Subdivision (d) exempts ADUs and JADUs
from this cap by specifying that, “[f]or purposes of this section, an
[ADU] or [JADU] shall not be construed as a separate interest.”
Subdivision (e) exempts owners who occupy either the separate
interest or ADU or JADU. And subdivision (h) exempts owners
who acquired title before AB 3182’s effective date.
       Plaintiffs contend section 4741, subdivision (a) bars any
prohibition or unreasonable restriction on the rental of guest
rooms. The dispositive question is whether guest rooms qualify
as “separate interests, [ADUs], or [JADUs]” for purposes of the
statute. Plaintiffs do not suggest the guest rooms are ADUs or
JADUs, so our discussion focuses on the meaning of “separate
interests” for purposes of section 4741.
       “Separate interest” is a defined term within the Davis-
Stirling Act. In the context of a condominium project, “‘separate
interest’ means a separately owned unit, as specified in Section
4125.” (§ 4185, subd. (a)(2).) Section 4125, subdivision (b)
provides that “[a] condominium consists of an undivided interest
in common in a portion of real property coupled with a separate
interest in space called a unit, the boundaries of which are
described on a recorded final map, parcel map, or condominium
plan in sufficient detail to locate all boundaries thereof. . . .”
Section 4125, subdivision (d) clarifies that “[a]n individual
condominium within a condominium project may include, in
addition, a separate interest in other portions of the real
property.” Section 4095, subdivision (a) defines “common area” to
mean “the entire common interest development except the
separate interests therein.” By implication, “separate interest”

                                 21
accordingly means any part of a common interest development
except the common area therein.
       Plaintiffs contend that because guest rooms are not part of
the building’s common area, they must be separate interests for
purposes of section 4741, subdivision (a), and any prohibition or
unreasonable restriction on rentals is therefore void. Although
superficially appealing, the argument rests on an unsupported
assumption that section 4741, subdivision (a) applies to every
non-ADU/JADU portion of an owner’s separate interest.
       The guest rooms at issue in this case are not by themselves
separate interests for purposes of section 4741; rather, they are
part of a separate interest. Section 4125, subdivision (d)
establishes every condominium includes only one separate
interest even if the boundaries are not contiguous. An individual
condominium may include “a separate interest in other portions
of the real property.” (§ 4125, subd. (d).) If each of the “other
portions of the real property” represented a separate interest in
its own right, the statute would specify that an individual
condominium may include separate interests therein—not “a
separate interest.” Moreover, the proposition that a single
condominium is divisible into infinitely many separate interests
would clash with section 4741, subdivision (b)’s accommodation of
a cap on the percentage “of the separate interests” that may be
rented out, which assumes that separate interests are discrete,
countable things.
       Section 4741, subdivision (a) does not address prohibitions
or restrictions on the rental of a portion of a condominium
owner’s separate interest. First, the plain language of the statute
applies to rules concerning the rental or leasing of “any of the
separate interests” in a common interest development, not any

                                22
part of any of the separate interests in a common interest
development. Moreover, it is significant that this language (“any
of the separate interests”) mirrors that in section 4740,
subdivision (a). As we have discussed, legislative analyses of SB
150—the relevant portion of which is now codified at section
4740, subdivision (a)—focused on resident owners’ potential need
to vacate property and rent it out for financial reasons.
       Additionally, section 4741, subdivision (a)’s prohibition of
“unreasonabl[e]” restrictions on the rental of separate interests
must be construed in light of earlier case law that upheld a
prohibition on renting part of a separate interest. (People v. Scott
(2014) 58 Cal.4th 1415, 1424 [“It is a settled principle of statutory
construction that the Legislature ‘“is deemed to be aware of
statutes and judicial decisions already in existence, and to have
enacted or amended a statute in light thereof”’”].) Specifically, in
Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156, the Court
of Appeal considered whether a common interest development’s
restriction of use to single-family dwelling purposes was
“unreasonable” under the Davis-Stirling Act. (Id. at 1164,
quoting former § 1354, subd. (a), current § 5975, subd. (a)
[“‘covenants and restrictions in the declaration shall be
enforceable equitable servitudes, unless unreasonable, and shall
inure to the benefit of and bind all owners of separate interests in
the development’”].) The Court upheld the restriction and
affirmed a judgment enjoining the owner from renting out rooms
in his condominium. (Id. at 1162, 1170, 1173.)
       Because guest rooms are not by themselves separate
interests and section 4741, subdivision (a) does not prevent
adopting rules against renting out a portion of a separate

                                 23
interest, the CC&Rs’ prohibition of guest room rentals is not
affected by section 4741, subdivision (a).

      C.     Plaintiffs Are Not Likely to Succeed on Their Claim
             Regarding the Prohibition on Child Residents
             Because There Is No Actual Controversy
       Plaintiffs’ only claim regarding the CC&Rs’ ban on child
residents is one for declaratory relief. Declaratory relief under
Code of Civil Procedure section 1060 “‘requires an actual
controversy relating to the legal rights and duties of the
respective parties’ [citation], not merely ‘“‘an abstract or
academic dispute.’”’ [Citation.]” (TransparentGov Novato v. City
of Novato (2019) 34 Cal.App.5th 140, 148.)
       Here, the Association correctly concedes the CC&Rs’ ban on
child residents is unenforceable. (O’Connor v. Village Green
Owners Assn. (1983) 33 Cal.3d 790, 792 [“We conclude that the
age restriction in the CC&Rs of a condominium
development . . . violates the [Unruh A]ct”]; § 51.2, subd. (b)
[codifying O’Connor].) Nonetheless, plaintiffs suggest there is
still an actual controversy because the Association “has a
fiduciary duty to enforce an illegal provision.” Unsurprisingly,
that is not the law. (See, e.g., Rest.2d Agency, § 411 [subject to
exceptions not applicable here, “one who undertakes to perform
service as the agent of another is not liable for failing to perform
such service if, at the time of the undertaking or of performance,
such service is illegal”].)

                                24
      D.      Plaintiffs Are Likely to Succeed on Their Amenity
              Claim Because the Association’s Restrictions Are
              Unsupported by the CC&Rs or the Operating Rules
       Plaintiffs submitted a declaration by Nicole Lupo (Lupo),
who lived in a guest room while performing unspecified work in
plaintiffs’ household. Lupo declared she moved out because,
among other things, the Association told her she “was not allowed
to use the [c]ommon [a]rea amenities, including the laundry
room, pool, and gym.” In the trial court, however, the Association
argued it had never categorically barred guest room occupants
from using building amenities, but rather required them to be
accompanied by a homeowner. That position was reflected in a
September 2019 email to Wilen advising him that, “per our
CC&Rs, guests are not permitted parking spaces, mailboxes or
use of the building amenities (pool, spa, gym, social room, etc.)
without the homeowner being present. [Guest rooms] do not
count as individual units under the CC&Rs.”
       The condominium complex’s governing documents do not
impose a blanket prohibition on guest room occupants using
building amenities, nor do they impose a requirement that such
occupants be accompanied by a homeowner when using the
facilities in question. The trial court, however, believed such a
rule could be inferred from the fact that guest room occupants
should be deemed “guests” rather than “residents” under the
Operating Rules. Even if it were true that guest room occupants
cannot qualify as residents under the Operating Rules,19 the

19
      We read the Operating Rules to say that every guest is
necessarily a resident. A guest is a “person other than a family
member who is provided long-term residency in a Unit by the
Homeowner or Tenant and who is registered as such with the

                                25
Operating Rules expressly allow guests access to certain
amenities. For example, guests are permitted to use the gym,
pool, and sauna.
       Because there is no provision in the CC&Rs or Operating
Rules that distinguishes guest room occupants from other
visitors, guests, or residents, plaintiffs are likely to succeed on
the merits of their claim for a declaration that guest room
occupants may use building amenities without being
accompanied by a homeowner. Because the trial court never
undertook a balance of harms analysis as to this claim, we will
reverse and remand with instructions to do so when deciding
whether a preliminary injunction should issue as to amenity use.

                           DISPOSITION
      The order denying plaintiffs’ motion for preliminary
injunction is vacated and the cause is remanded for further
proceedings consistent with this opinion. Specifically, the trial
court is directed to issue a new and different order that
maintains its ruling denying plaintiffs’ request to enjoin the
Association from enforcing the prohibition on guest room leases
or rentals, maintains its ruling denying plaintiffs’ request for an

Office in writing,” and a resident is a “person (e.g., family
member of Guest) who is provided residency in a Unit by the
Homeowner or Tenant . . . .” The trial court did not refer to the
definition of “resident” in concluding that guest room occupants
may not qualify as such, but emphasized that guest rooms “are
not permitted to be leased or sold.” The Association presents the
same argument in its respondent’s brief. Nothing in the
governing documents, however, indicates a “resident” must
occupy a unit as an owner or lessee.

                                 26
injunction as to child residents, and that rules—after
consideration of the balance of harms—on whether a preliminary
injunction should issue to bar the Association from restricting
guest room occupants’ access to building amenities except in
keeping with their status as visitors, guests, or residents under
the Operating Rules. The parties are to bear their own costs on
appeal.

    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                           BAKER, J.

We concur:

     RUBIN, P. J.

     MOOR, J.

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