June 29, 2026

The Hedge | Brutal Honesty Over Hype Since 2008

Davis-Stirling governs both condominium associations and planned development (single-family home) associations — but the specific rights and obligations differ in important ways based on the type of development. Understanding the distinctions relevant to your property type ensures you’re applying the right legal framework to your situation.

Ownership Structure Differences

In a condominium, each owner owns their unit in “fee simple” plus an undivided fractional interest in the common areas. The common areas — hallways, roofs, building structure, exterior walls — are owned collectively by all unit owners. In a planned development (PD), each owner owns their entire lot including the structure, with the common areas (streets, parks, pools, landscaping) owned by the HOA as a separate legal entity. This ownership structure difference affects: who is responsible for exterior maintenance (the HOA in most condos; the individual owner in most PDs); insurance obligations; and the scope of the HOA’s authority over individual property.

Maintenance Boundary Differences

In condominiums, the CC&Rs typically define a specific maintenance boundary — often the “unfinished interior surfaces” of the unit (bare walls, floors, ceilings). Everything outward from that boundary — the structure, plumbing within walls, electrical within walls, HVAC equipment in common spaces — is association responsibility. In planned developments, the owner typically maintains their entire lot and structure; the association maintains only common areas. This boundary determines who pays when something breaks — and getting it wrong is expensive.

Assessment and Lien Differences

While both condo and PD associations can levy assessments and record liens for nonpayment under Davis-Stirling, the practical importance of the lien is different. In a condominium, the association’s maintenance obligations for shared structure mean that deferred maintenance on individual units (particularly plumbing or water damage) can affect neighboring units — creating a more immediate financial stake for the association in resolving member maintenance issues. In a PD, individual property maintenance is typically the owner’s responsibility, and the association’s enforcement interest is primarily aesthetic and regulatory rather than structural.

The Hedge has been cutting through financial and business noise since 2008. Brutal honesty over hype — always.

The Hedge | Brutal Honesty Over Hype Since 2008

The Hedge’s June coverage has touched most of the major compliance categories every California business owner should have current. This post consolidates them into a single actionable mid-year checklist. Run through it now — before any compliance gap turns into a regulatory problem.

Entity and Formation Compliance

Federal Corporate Transparency Act: have you filed your beneficial ownership information with FinCEN? Deadline for pre-2024 entities was January 1, 2025. If you haven’t filed, do it today. California Secretary of State: is your Statement of Information current? LLCs and corporations must file every 1-2 years. DFPI license: if you’re in financial services, collections, or a regulated industry, is your DFPI license current and in good standing?

Employment Compliance

Paid sick leave policy: does it reflect the January 2024 increase to 5 days (40 hours)? Minimum wage: are you paying at least $16/hour statewide, and the applicable industry minimum if you’re in fast food or healthcare? Wage statements: do your pay stubs include all required information including sick leave balances? Worker classification: have you reviewed all contractor relationships against AB5’s ABC test in the past 12 months? Non-compete provisions: have you removed void non-compete clauses from your employment agreements?

Tax and Financial Compliance

California franchise tax: is the current year’s payment current? Pass-through entity tax election: have you evaluated whether the PTET election is beneficial for your current year? Estimated taxes: are quarterly payments calibrated to current-year income rather than prior-year safe harbor if income has grown significantly? CCPA/CPRA: if you’re approaching any of the three coverage thresholds, have you begun compliance planning?

HOA-Specific Compliance (Property Owners)

Annual disclosure review: have you reviewed the HOA’s annual disclosure package, particularly the reserve fund percent funded? Assessment currency: are your assessments current? A delinquency notice is worth addressing immediately before it becomes a lien. CC&R review: are you in compliance with current CC&R requirements, including any amendments adopted in the past year? Record this review — it demonstrates good faith if an enforcement issue arises later.

The Hedge has been cutting through financial and business noise since 2008. Brutal honesty over hype — always.