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Adam Hardesty fought the HOA and the HOA won.
In a legal ruling issued Friday afternoon, a north San Diego County ruled against the Carlsbad condo owner who tried to convert his garage into a rental unit over the objections of his homeowners association. The ruling brings to an end — at least for now — a year-long legal tussle centered on whether state housing law written to make it harder for locals to reject new developments also applies to all homeowners associations, the quasi-private governments that enforce neighborhood rules for more than one-third of California’s residents.
Throughout much of the fight between Hardesty and the Mystic Point Homeowners Association, Hardesty has sat on the association’s board.
The dispute is more than a neighborhood-scale drama. Though the California Legislature has spent the last 10 years overriding local restrictions on new residential development in order to boost the state’s stock of homes amid an affordability crunch, HOA authority often falls into a legal gray area.
In the case of Mystic Point, Hardesty argued that a 2019 state law voided any HOA restrictions on accessory dwelling units — small residences located on the same property as a larger existing home. Hardesty wanted to turn his condo garage into a rental for extra income. The HOA countered that its own ban on using garages for anything other than car storage made that a no-go.
Hardesty, backed by the opinion of a planner at the state’s Housing and Community Development department, believed the law was on his side and went ahead and broke ground. Shortly after CalMatters reported on the dispute early last year, the HOA sued.
In its court filings, the association argued that though the 2019 law might very well prohibit many types of HOAs from placing restrictions on ADUs, the law doesn’t apply to condo developments like the one at Mystic Point.
It also argued that the law only applies to areas “zoned for single-family residential use.” Because Hardesty’s plot did not exclusively allow single-family homes, but townhomes and small condos as well, it doesn’t apply in this case for that reason, too.
In a highly technical ruling with heavy emphasis on syntax and grammar, Superior Court Judge Victor Torres sided with the HOA on both counts. If the Legislature had intended to include condos, it “could have easily” made that language more explicit, the judge wrote. “It did not.” Likewise, applying the law to Hardesty’s plot with its multi-use zoning would be “contrary to the legislative intent,” he wrote.
The legal battle has so far played out without the intervention of the state. Though housing regulators and the state’s attorney general’s office regularly step in when local governments quash a development project in a way that may conflict with state law, they do not typically take such enforcement actions against HOAs.
In a hearing Friday afternoon, Torres acknowledged the complexity of the case, saying that he wished he had “a stronger feeling one way or the other.” Ultimately, he ruled for the association, but noted that this might not be the end of the legal saga.
“I’m sure I’ll hear more education from the Court of Appeal at some point,” he said.
Hardesty said he would like to appeal the decision but isn’t in a position to do so. “What it’s going to take is more time and money,” Hardesty said in a telephone call. “Time, I have. But money? I think I’m pretty much bone dry.”
He estimates that he and his wife spent more than $100,000 in combined construction costs and legal fees.
In fighting for his right to add a unit under his condo, Hardesty pushed up against what many see as a fundamental character of HOA living — the ability to restrict how other residents use their land. Economic researchers have found that residences governed by associations are typically more valuable when they neighbor areas with lax zoning. In other words, people are often willing to pay more to guard against the possibility of a new apartment in their neighborhood.
