COURT OF APPEAL
ARTICULATES
STANDARD FOR
ENFORCING
RESTRICTIONS
AGAINST
COMMERCIAL USES
Tyler Kerns, Esq.
Kriger Law Firm
C
C&Rs for many residential community
associations include use restrictions that
prohibit owners from using their homes
for business or commercial activities. In
a recently published case, a California
Court of Appeal interpreted such a restriction to only
prohibit business or commercial activities that “affect the
community’s residential character.”
The case, Eith v. Ketelhut (2018) 31 Cal.App.5th 1,
involved a vineyard on a residential lot in the Los Robles
Hills Estates Homeowners Association in Thousand
Oaks, CA. The association’s CC&Rs state, “No lot shall
be used for any purpose (including any business or
commercial activity) other than for the residence of
one family….” The CC&Rs also provide that “[f]or
good cause shown … deviations from the applicable
restrictions” may be allowed “to avoid unnecessary
hardships or expense, but no deviation shall be allowed
to authorize a business or commercial use.”
As part of an approved landscape plan, the owners of
a 1.75-acre lot planted a vineyard of 600 grape vines. The
owners regularly harvested the grapes, which were then
transported to an offsite processing plant to be made into
wine. The wine was stored at a separate offsite facility.
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SAN DIEGO COMMUNITY INSIDER
SUMMER 2019
The owners set up a website and social media accounts to
advertise and sell the wine.
When other owners in the association complained to
the board of directors that the vineyard was a prohibited
business or commercial use, the board conducted a
hearing and concluded that no prohibited business or
commercial activity was taking place on the property.
The board considered the vineyard to be landscaping and
found that the harvesting of the grapes did not disrupt
the community.
Several of the complaining owners sued the
association, individual board members, and the
owners of the property with the vineyard seeking
a determination that the vineyard was a prohibited
business or commercial use and issuance of an
injunction against such use. The trial court relied on
Lamden v. La Jolla Shores Clubdominium Homeowners
Assn. (1999) 21 Cal.4th 249 to give judicial deference to
the board’s decision that the operation of the vineyard
was not prohibited. On appeal, the appellate court not
only upheld the trial court’s ruling and its application
of the judicial deference standard adopted by Lamden,
but also held that, as a matter of law, the “operation of
the vineyard is not prohibited business or commercial