The arguments made on behalf of Arrowhead Woods property owners have now been completely upheld not once, but twice, and by two different California courts and four judges. The first endorsement was by the San Bernardino Superior Court in a thorough 17 page opinion and order. Now, three highly experienced justices of the California Court of Appeal, in an equally thorough 25 page opinion, have unanimously agreed with the Superior Court’s decision and have again upheld the arguments and positions taken by the property owners.
At the same time, both courts have repeatedly rejected arguments made by the ALA as a justification for its attempt to interfere with Arrowhead Woods property owners’ property rights by banning short-term renters from using the Lake and the shoreline. Those rejected arguments include, but are not limited to, claims that:
a) short term renters are not “lessees” under the ’64 Agreement if they rent for less than 30 days;
b) renting a home to a short term renter is a “commercial use of the Lake”;
c) short term renters are not lessees/tenants but “lodgers”, like hotel guests;
d) the ban on short term renters using the Lake and shoreline was a reasonable restriction; and
e) membership in the ALA was required to use the Lake or the shoreline in any way.
But you do not have to take our word for it. Here are some of the key rulings that the three justices of the Court of Appeal unanimously made. We have quoted directly from the court’s opinion and have provided citations to the pages where the quoted language appears:
1. Rejection of the “STRs are not lessees argument" made by the ALA:
“Additionally, the 64 Agreement does not limit the term of any lease….[The] 64 Agreement contemplates any person who is allowed exclusive use of Arrowhead Woods’ property for any period, regardless of how short that period may be, is a lessee.” (p. 14)
2. Rejection of the “commercial use” argument made by the ALA (defendants):
“Defendants also contend the use by short-term renters equates to a business or commercial use that is precluded by the 64 Agreement. However, the fact a business or commercial transaction may exist between the Arrowhead Woods’ property owner and the short-term renter in the transaction to rent the property does not equate to the renter using the Lake or Reserve Strip in a commercial or business transaction.” (p. 15)
3. Rejecting the argument by the ALA that a short term renter is a lodger, not a lessee or tenant:
“…a short-term renter would fall under…a tenant versus a lodger.” (p. 14)
4. Rejecting the ALA’s argument that the ban on STRs’ use of the Lake and shoreline was a “reasonable regulation”:
“A rule stripping a category of individuals of their right under the 1964 Agreement to Lake access cannot be reduced to constituting a mere regulation designed to promote the safety, health, comfort, and convenience of the recreation activities of persons enjoying the Lake. Otherwise, the power conferred under the Agreement for the Association (as a successor in interest to the contracting parties) to make reasonable regulations to promote Lake activities could be further used to deprive property owners, their long-term lessees, and their houseguests of their rights to enjoy the Lake themselves; such a “regulation” would not be reasonable in light of the 1964 Agreement’s express grant of Lake and reserve strips access rights.” (p.17)
5. Rejecting the ALA’s argument that membership in the ALA is required to access the Lake and its shoreline:
“Again, 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 Strips”. (p. 21)
“We agree with the trial court’s reasoning and conclusion. The Association did not exist until 1974. Arrowhead Woods property owners are not required to join the Association and, according to plaintiffs, most do not…. We agree the Association’s membership rule cannot be construed as a reasonable regulation to promote the safety, health, comfort, and convenience of property owners enjoying the Lake.” (p. 22)
“The 1964 Agreement provides for the owner of the Lake to charge a reasonable fee for permitting piers and docks to be located and kept on the reserve strips or the Lake, and a reasonable fee for licensing boats to be used on the Lake and for rental slips. It did not provide for further charges.” (p. 22)
6. The strength of the plaintiffs’ positions compared to the ALA’s positions:
“Plaintiffs therefore have demonstrated a probability of prevailing on claims based on a breach of the 1964 Agreement resulting from the Association’s exclusion of property owners who are not Association members from access to the Lake and reserve strips.” (pp. 22-23)
7. Rejecting the ALA’s claim that plaintiffs "want to make Lake Arrowhead a public lake”:
“Defendant [the Association] also 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. (p. 23)
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