California · Davis-Stirling Act

What an association may still say about renting out your unit.

Less than it thinks. Three sections, enacted three years running, left associations with a floor they cannot go under, a counting method that is not the obvious one, and a deadline to fix their own documents that passed in 2022.

The 25 percent figure is a floor, not a cap

This is the sentence that gets read backwards. § 4741(b): an association shall not adopt or enforce a provision … that restricts the rental or lease of separate interests within a common interest to less than 25 percent.

So 25 percent is the minimum an association must allow, not the maximum it may permit. The same subdivision says in terms that nothing in it stops an association authorising a higher percentage. A board that reads the figure as permission to cap rentals at a quarter of the units has the provision upside down — the statute is telling it where the bottom is.

Thirty days, in both directions

The same number draws two lines that point opposite ways, and an association that confuses them gets both wrong.

1. ≤ 30 days§ 4741(c) leaves the association free to prohibit transient or short-term rental of a separate interest for 30 days or less. The holiday-let ban survives all of this.
2. > 30 days§ 4739(a), notwithstanding § 4740, says an owner may not be barred from renting a portion of the owner-occupied separate interest for a period of more than 30 days. A room in the house you live in is protected.

§ 4739(b) keeps the rest of the rulebook in place: nothing in the section lets the owner or the lodger break the governing documents on conduct in the unit or the common areas, or on membership rights and privileges — parking restrictions and guest access to common facilities are named.

The grandfather rule, and the transfer that does not break it

§ 4740(a) is older than the cap and still does work no other section does. An owner is not subject to a provision prohibiting rental unless that provision, or the amendment that introduced it, was effective before the owner acquired title. A community that bans rentals cannot bind the owners who bought before the ban.

The obvious way to lose such a right is to transfer the property and start again. § 4740(b) closes part of that: the right is not treated as terminated where the transfer is exempt from reassessment under Revenue and Taxation Code § 62 or § 480.3, or exempt from the Real Estate Transfer Disclosure Statement under Civil Code § 1102.2(b) — probate transfers only — or (e), (f) or (g). Moving a home into a trust, or a transfer between the kinds of related parties those provisions cover, does not restart the clock.

§ 4741(h) repeats the point from the other end: the rental-cap section does not change the rights of an owner who took title before it came into force.

What the owner has to hand over before renting

§ 4740(c) is short and specific, and it is less than associations usually ask for. Before renting, the owner provides the association two things:

1. Verification of the date the owner acquired title.
2. The name and contact information of the prospective tenant or lessee, or of their representative.

Not the lease, not the rent, not a credit report. The date establishes the grandfather right; the contact details let the association reach the occupant.

Two things follow. First, amending a declaration is normally a vote of the members — § 5100(a)(1) puts it among the four votes that must be held by secret ballot. § 4741(f) is one of the rare places the Act hands that power to the board alone, and it is narrow: delete or restate the offending covenant, change nothing else.

Second, the date has passed. An association whose recorded declaration still carries a rental prohibition or a cap below 25 percent is more than four years past a deadline the Legislature gave it, and the covenant has been unenforceable the whole time. That is worth checking against the recorded document rather than against what the manager believes it says.

What it costs to enforce a covenant that is void

§ 4741(g): an association that willfully violates the section is liable for actual damages and owes a civil penalty of up to $1,000 to the applicant or other party — the same remedy the Act attaches to blocking an EV charger.

§ 4740(d) closes with a disclaimer worth noting for what it does not say: nothing in that section revises or affects the voting process by which a development adopts or amends its governing documents. The rental sections change what the documents may contain. How the members change them is left exactly where it was.