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CITY OF PALM DESERT
DEVELOPMENT SERVICES
CITY COUNCIL STAFF REPORT
REQUEST: Receive and file an informational report regarding the future
direction of City Landscape and Lighting Districts (LLD) and
possibilities of forming Homeowners Associations (HOA).
SUBMITTED BY: Ryan Stendell, Senior Management Analyst
DATE: June 26, 2008
CONTENTS: Map of existing LLD areas
Recommendation:
By Minute Motion: Receive and file the informational report regarding
Homeowners Associations and Landscape and Lighting Districts.
Discussion:
At its regular meeting of May 22, 2008, the City Council directed staff to move in the
direction of converting the City's existing Landscape and Lighting Districts into
Homeowners Associations, and to report back to the City Council with an informational
item to further discuss the matter.
The fo�mation of a Homeowners Association (HOA) or commonly referred to as a
Common Interest Development (CID) in state law is governed by the Davis-Sterling
Common Interest Development Act of 1985. The most difficult requirement of forming a
HOA under this law is that it requires a declaration from every property owner within the
affected area. This requirement is typically taken care of when the development is
being constructed and the developer can put Covenants, Conditions and Restrictions
(CC&R's) on the property that requires the parcel to participate in a future HOA. The
difficulty in attempting to form an HOA at a later date is the absence of CC&R's on the
property. Without CC&R's to require a homeowner's participation the request is purely
voluntary and requires 100% of the affected party's approval.
In the past staff has discussed the conversion to HOA from LLD's with several of the
City's districts. Staff believes that the majority of districts would not support the
conversion of LLD to HOA given the current laws and regulations surrounding them.
Staff Report
June 12, 2008
Page 2 of 2
The options before the Council are: continue with the current policy that every new
residential development in the City will form an HOA, and City Council would review
individual requests by existing developments to convert to an LLD. Staff would continue
to re-ballot existing underfunded districts to attempt increase the levies. The second
option that the Council could consider would be to attempt to change State Law. The
Davis-Sterling law is structured in a way that it makes forming an HOA extremely
difficult once the homes are sold from the original developer. Staff believes that our
best course of action under this option would be to contact our local state representative
and attempt to draft a revision to law that would make forming an HOA more realistic,
possibly utilizing a majority vote system in place of the existing 100% approval
requirements.
Submitte y: Depart nt Head•
Ryan Stendell Homer Croy
Senior Management Analyst ACM, Develo ent Services
Approval:
L�"ITY COUNCIL ACTI�N:
APPROVED nENIED
����� OTHER �"
Carlos L. Ortega ',
City Manager �l��'� ��"��"� - c-�
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.�.3STAZN• �d? e_-
i�EkZI�'IED BY• r �
�rigin�l onj File wi.th City Clerk's OffirE.
*Removed for separate consideration - then, by Minute
Motion: 1) Receive And file the report; 2) direct staff
to pursue changing State law regarding formation of
homeowners associations following the sale of homes from
the original developer.5-0
CITY OF PALM llESERT
DL'VCLOYMEN"I' SCRVICL5
CITY COUNCIL STAFF REPORT
REQUEST: Supplement the Informational Report Re Landscape and Lighting
Districts (I.LD) and Homeowners Associations (HOA)
SUBMITTED BY: David J. Erwin
DATE: 7-10-2008
Discussion:
Further clarification and information for the Council indicates that the formation of l fOA
from an existing LLD requires that all parties within the HOA be subjected to the same
regulations. 1'ypically a Developer forms an I�OA prior to the sale of any part of the
Development thru creating restrictions on the entire property so that when later sales of parts
or lots all the property has the same restrictions.
The approach of'the Council should be either to require an HOA from the llevelopment at
the start or the creation of the LLD with the Developer initially with a built-in inflation factor
for assessments.
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