Arbitration Provisions in Recorded Declarations

Dispute Resolution Journal, August-October 2012 | Go to article overview

Arbitration Provisions in Recorded Declarations


COMMON INTEREST DEVELOPMENTS

The California Supreme Court held that an arbitration clause in a recorded Declaration of Covenants, Conditions and Restrictions calling for the owner's association to arbitrate construction disputes with the condominium developer is enforceable and binding on the association, even though the association did not exist when the declaration was drafted or recorded.

Pinnacle Market Development conveyed to each buyer a condo unit in fee and a proportionate undivided interest in the common area as a tenant in common. It deeded all other real property directly to the owner's association in fee. Article XVIII of the recorded De - claration states that by accepting a deed, the association and each owner agree to waive their right to a jury trial and have any construction dispute naming Pinnacle as a party resolved exclusively through binding arbitration in accordance with the Federal Arbitration Act and the California Arbitration Act. Section 8 of the purchase agreement refers to Article XVIII and requires the parties to initial the provision reciting their agreement "TO COMPLY WITH ARTICLE XVIII OF THE DECLARATION WITH RESPECT TO THE DISPUTE REFERENCED THEREIN."

The association filed a construction defect action against Pinnacle, which moved to compel arbitration. The district court invalidated the arbitration agreement on unconscionability grounds. The California Court of Appeal concluded by a split vote that the association did not waive its constitutional right to jury trial for construction defect claims because it did not exist when Pinnacle recorded the Declaration.

The California Supreme Court was not persuaded by this reasoning. It reversed the denial of Pinnacle's motion to compel arbitration.

First, it noted that Civil Procedure § 1298.7, which allows a purchaser to pursue a construction and design defect action against a developer in court, would be preempted by the FAA (even if it applied to these facts) because it discriminates against arbitration.

Next, the court turned to whether there was a valid arbitration agreement. It discussed the Davis-Stirling Act, which governs the creation and operation of common interest developments, and makes covenants and restrictions in recorded declarations enforceable "unless unreasonable." The court concluded that covenants and restrictions in recorded declarations must be enforced "unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Arbitration Provisions in Recorded Declarations
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.