By Mary-Justine Lanyon
A lawsuit that was triggered by a bylaws amendment passed by the Arrowhead Lake Association’s board of directors in 2020 has made it way to the appellate court.
That amendment precluded access to ALA’s property by short-term renters. ALA took the position that no one who is not an ALA member is permitted access to the association’s property.
A group of plaintiffs filed suit against ALA in 2021, claiming the amendment violated the 1964 agreement and was an infringement of property rights. Those plaintiffs requested a preliminary injunction, which was granted by Superior Court Judge Gilbert G. Ochoa on Jan. 19, 2022.
In his ruling, Judge Ochoa asked the question, “Is that (access to ALA property by those who rent a home for 30 days or less) permissible under the ‘64 agreement?”
The short answer in the ruling is “yes” – “a short-term renter is a lessee” and the ’64 agreement “provided access to the lake and reserve strip by Arrowhead Woods owners, their lessees and their houseguests.”
Judge Ochoa further opined that “the ’64 agreement provides all Arrowhead Woods owners, their lessees and their guests with the right to access and use, for recreational purposes, the lake and reserve strip. Nothing in the language indicates or requires the owner must first be a member of the organization holding title to the lake and reserve strip.”
Judge Ochoa clarified that being entitled to access to the lake and reserve strip does not entitle guests to store or use a boat on the lake.
ALA filed an appeal.
In the ruling filed by the Fourth Appellate District of the Court of Appeal of the State of California on Feb. 7, 2024, the court wrote: “Under ordinary meaning, lessee means a person who has an agreement that allows the use of a house for a period in exchange for payment…. A lease is a contract by which one conveys real estate, equipment, or facilities for a specified term and a specified rent….
“Based on the above definitions, a short-[term] renter is a lessee.”
The appellate court went on to state that “the 64 Agreement provides all Arrowhead Woods’ owners, their lessees, and their guests with the right to access and use, for recreational purposes, the Lake and Reserve Strip. Nothing in such language indicates or requires the owner must first be a member of the organization holding title to the Lake and Reserve Strip.”
In addition, the appellate court notes that the defendant (ALA) “contended that by imposing the requested injunction, the character of the lake is changed from private to public. But allowing those with the contractual right of access is not rendering the lake open to the public. It remains that the lake is only accessible by the Arrowhead Woods’ property owners, guests and lessees.
“Overall, the harm weighs in plaintiffs’ favor.”
In his president’s report at the Feb. 24 ALA board meeting, Alan Kaitz noted that, “over a year ago the court issued a preliminary injunction. ALA appealed. Nothing will change as a result of the appellate court ruling. The board will be in constant communication with legal.
“We will only proceed in the best interests of ALA and its members.”
During the Q&A period at the end of the meeting, member Richard Shay asked if the board “will reconsider its position with respect to the STR litigation and communicating with members.
“In light of the recent appellate decision, it’s very clear there is a real concern about whether this rule should ever have been passed by the association. As a result of that action, it has cost the members a lot of money. There’s going to be a potential for damages. I don’t think it was ever communicated the consequences of this litigation.”
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