Abstract- Homeowners’ associations (HOAs) have increasingly assumed quasi-governmental functions, yet the legal framework governing them remains anchored in private law doctrines that obscure core problems of consent, fairness, and accountability. Nevada courts, like others across the U.S., treat covenants, conditions, and restrictions (CC&Rs) as binding contractual obligations—even though homeowners lack real bargaining power and did not negotiate the terms. Courts justify enforcement through legal fictions such as constructive notice, the treatment of CC&Rs as real property servitudes, and an asserted promotion of collective welfare. These rationales mask the developer-driven origins of CC&Rs and the structural coercion faced by homeowners.
This post critiques the dominant legal justifications for CC&R enforcement—showing how judicial efficiency, rather than justice, often prevails—and explores reforms that would recognize HOAs as de facto local governments. Recommended reforms include stronger administrative oversight, broader use of public policy and unconscionability doctrines, and mandatory transparency and plain-language disclosures. Any viable uniform law must address the CC&R drafting process itself, because without reforming how governing documents are created and approved, other consumer-protection measures will not correct the power imbalance.
Introduction
Nevada courts have recognized HOAs are not purely private actors, but function as de facto local governments[i]—and should be constrained accordingly. Yet when you buy into a homeowners’ association (HOA) or other common-interest community (CIC), the law presumes you “consented” to its rules the moment you purchased your home. This presumption -known as constructive consent – appears in most state HOA statutes.
The theory is deceptively simple: you has access to the recorded CC&Rs before closing, you bought anyway, so you must have agreed. But this neat legal fiction rests on four outdated assumptions:
Market choice – Buyers supposedly can choose between CIC and non-CIC housing. In many fast-growing regions, every new development is an HOA, eliminating real alternatives.
Equal bargaining power – CC&Rs are drafted entirely by the developer, with no owner input, no negotiation, and often no plain-language disclosure in time for meaningful review.
Static governance terms – Rules at closing supposedly stay the same. In reality, boards can adopt new restrictions or impose costly projects years later, sometimes without a direct owner vote.
Fixed obligations – Your obligations supposedly do not expand beyond the CC&Rs you “agreed” to. In truth, legislatures can amend HOA statutes in ways that directly affect your rights and obligations, without amending the CC&Rs.
Unlike typical contracts, HOA obligations are shaped not only by governing documents but also by constantly evolving statutory law—law that most homeowners have no practical way to track.
The Core Problem: Lack of Real Consent
Homeowners “agree” to CC&Rs by purchasing property in a development where they already exist. But:
They did not draft or negotiate the terms.
The terms are usually created solely by the developer, often with legal and financial incentives that favor the declarant and industry stakeholders.
Most buyers are unaware of the full legal implications of CC&Rs at the time of purchase.
Critique: Despite this, courts enforce CC&Rs as if they were freely negotiated, binding contracts[ii]. Why?
Justifications Used by Courts and Legislatures
Constructive Notice (Implied Consent)
Legal fiction: By purchasing property with recorded CC&Rs, the buyer is deemed to have constructively consented to the terms.[iii]
The CC&Rs are typically recorded in county land records, making them “public.”
Courts treat this as sufficient notice and basis for enforceability — even if the buyer never saw or understood the terms. (Nevada requires owners be given all governing documents before purchase. Read more here)
Flaw: This assumes an unrealistic level of sophistication by consumers and treats notice as consent — a deeply flawed premise in any meaningful theory of contract.
Example: Many CC&Rs contain a clause stating that any person who owns, occupies, or has any interest in a property is “conclusively deemed” to have agreed to all rules—even if:
They never read the CC&Rs,
They weren’t told about them, or
The deed makes no reference to them.
The Theory- Servitudes as Property Interests, Not Contracts
CC&Rs are enforced as real covenants or equitable servitudes, which “run with the land.”[iv]
This provision reflects the property servitude model rather than traditional contract law.
In contract law, mutual assent (both parties knowingly agreeing) is key.
Courts often bypass traditional contract defenses (like lack of mutual assent or unconscionability) because these are property obligations, not just personal agreements.
Under this view, the burden and benefit pass automatically to all future owners.
Flaw: This blurs property rights with governance power. The fact that a rule runs with the land does not make it fair, especially when it regulates daily life or imposes significant financial burdens.
Promotion of Collective Welfare
Courts and legislatures argue that CC&Rs promote community stability, aesthetic uniformity, and shared services.
Enforcing CC&Rs is seen as protecting expectations of other owners who rely on uniform enforcement.
This is similar to zoning law rationales — collective interests justify individual burdens.
Flaw: The collective interest rationale continues to underlie much of land use regulation—both public (zoning) and private (CC&Rs). However, the collective interest narrative often masks elite or developer interests, especially in HOAs where the declarant drafts rules before any “collective” exists. “The supposed collective interest often reflects only the interests of those with the power to shape the rules.”[v] The rationale assumes HOAs function democratically and transparently, which is often not the case. It also ignores how developer-drafted CC&Rs are written to favor commercial goals, not homeowners' long-term interests. Lastly, while zoning is publicly accountable through municipal procedures, CC&Rs are privately created, resistant to change, often requiring supermajority votes to amend, and not subject to judicial review unless grossly unreasonable.[vi]
Judicial Efficiency
Courts favor bright-line rules that avoid complex factual disputes about what a buyer knew or agreed to. Enforcing CC&Rs as written is quick and predictable.
Flaw: Judicial efficiency is achieved at the expense of individual fairness and informed consent, particularly for vulnerable or first-time buyers.[vii]
Why These Justifications Are Increasingly Contested
If obligations can expand through later board rules or legislative changes, “consent” at closing is not real consent—it’s a blank check. This is the hallmark of an adhesion contract: a standardized, non-negotiable agreement binding you to far-reaching obligations you cannot change.
Structuural Problems
Power Imbalance
Declarants write CC&Rs unilaterally, often including:
Developer control rights
Non-negotiable fee obligations
Broad enforcement powers
Attorney fee-shifting clauses
Buyers have no power to modify these terms and are given “take-it-or-leave-it” conditions, often hidden in dense boilerplate.
Lack of Transparency
Buyers may receive incomplete or misleading disclosures.
Even if CC&Rs are recorded, they may be hundreds of pages long and written in legalese that most people cannot understand.
Nevada law (like other UCIOA-based jurisdictions) follows the principle that statutes governing common-interest communities can override or supplement the terms of the CC&Rs (see NRS 116.1206). Even if the new law is not explicitly incorporated or reflected in the governing documents, it is still enforceable. Owners are presumed to know the law, and the association has a duty to comply with it.
Associations can enforce statutory provisions even if they have never amended the CC&Rs to include the change—undermining the appearance of mutual agreement or contractual certainty.
“Reforms to CIC statutes often take effect years after communities are established, creating tension between new legal mandates and ‘frozen’ governing documents. Owners are expected to comply, even though they may never be notified.” [viii]
Conflict with Modern Contract Principles
Modern contract law values mutual assent, freedom to bargain, and remedies for unfairness.[ix]
Enforcing CC&Rs against homeowners under the guise of contract undermines those principles.
Recorded CC&Rs are not products of negotiation, and suggests that the servitude doctrine may sidestep the fairness protections available under contract law.[x]
“Courts treat CC&Rs as enforceable because they are said to be private contracts—but that interpretation fails to recognize the structural coercion and lack of actual bargaining. The notion of consent is fictional and primarily serves the goal of judicial efficiency and predictability, not justice.”[xi]
Reform Framework
Acknowledge the quasi-governmental status
Impose minimum due process requirements—notice, impartial hearings, transparent rulemaking, and proportional penalties—commensurate with the powers exercised
Reframing CC&Rs as “Adhesion Contracts”
Apply unconscionability and reasonable expectations doctrines more aggressively (as courts do with consumer contracts).
Adopt a Regulatory Oversight Model [xiv], [xiii], [xv]
Require administrative review of CC&Rs and amendments for fairness and legality.
Prohibit special declarant rights that hinder post-control owner governance.
Develop standardized, plain-language templates
Abolition or Substantial Curtailment (Radical Reform)
A minority but growing group of legal scholars and reform advocates argue for:
Abolishing HOAs as a legal model in residential communities.
Shifting infrastructure and governance back to public control (e.g., through local government absorption).
Proposals in this vein emphasize the anti-democratic nature of CC&Rs and their privatization of public functions
Conclusion
The enforcement of CC&Rs rests on legal fictions—constructive notice, servitude theory, and collective welfare—that obscure the absence of real consent. These fictions persist because they serve judicial efficiency, developer interests, and governmental cost-shifting. But they undermine fairness, transparency, and democratic accountability. As HOAs govern more of America’s housing, the law must evolve to reflect their public-like powers and address the contractual imbalance at their core.
Mike Kosor
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i Kosor V Olympia
ii Nahrstedt v. Lakeside Vill. Condo Ass’n, 8 Cal. 4th 361, 878 P.2d 1275 (1994).
iii This concept of constructive notice is foundational to HOA law. In Nahrstedt v. Lakeside Village Condo Association, the California Supreme Court stated that owners "purchase their units knowing that restrictions may be imposed," and are thus deemed to have accepted them. See Susan F. French, 53 Wash. & Lee L. Rev. 925 (1996); Saxer, 32 Ga. L. Rev. 1 (1997); Restatement (Third) of Property: Servitudes § 3.1 cmt. b; and NCCUSL UCIOA Prefatory Note (2008).
iv The Restatement (Third) of Property: Servitudes articulates this principle, noting that a servitude is created when property is subjected to a use restriction for the benefit of others in the community.
v Franzese, Paula A., Privatization and Its Discontents, 37 Urban Lawyer 335, 348 (2005):
vi Restatement (Third) of Property: Servitudes § 3.1 cmt. h (2000): Acknowledges the potential for abuse and calls for a reasonableness standard, but notes courts rarely apply this rigorously.
vii Susan French, The Constitution of a Private Residential Government, 6 U. Chi. L. Sch. Roundtable 237, 250–51 (1999):
viii Nevada Law Journal, Vol. 12, “Statutory Overlays in Common Interest Communities”
x Mutual assent-Restatement § 17; May v. Anderson (Nev.); Carlill case, freedom to bargain- UCC § 2-204; Restatement § 18; Farnsworth; Nevada Power case, unfairness remedy- Restatement § 208; UCC § 2-302; Walker-Thomas; Nevada unconscionability
xi Restatement (Third) of Property: Servitudes § 3.1, Comment h (2000): “Although enforcement of servitudes based on notice rather than actual consent is justified to preserve the stability of land title records, this practice raises significant concerns about fairness and the legitimacy of rulemaking without democratic input.”
xii Evan McKenzie, Privatopia: Homeowner Associations and the Rise of Residential Private Government (Yale Univ. Press 1994), esp. Ch. 4.
[xiii] Susan French, “Servitudes Reform and the Restatement,” Real Prop. Prob. & Tr. J. 31:301 (1996).
[xiv] Hyatt, Community Association Law (2007), recommends standardized drafting to promote fairness and clarity.
[xv] Uniform Law Commission, UCIOA § 4-109 (Disclosure Statement); Paula Franzese, “Privatization and Its Discontents,” Urban Lawyer 37(3):335 (2005) – advocating for disclosure reform in CICs. Susan F. French, The Enforcement of Covenants in Common Interest Communities, 31 Real Prop. Prob. & Tr. J. 301 (1996), Wayne S. Hyatt, Community Association Law (Carolina Academic Press, 2007), pp. 79–83
