Greenfield v. Mandalay Shores Community Association

BACKGROUND AND FACTS Mandalay Shores is a beach community in Californias Oxnard Coastal Zone where nonresidents have vacationed for decades, renting homes on a short-term basis. Robert and Demetra Greenfield own a single-family residence at Mandalay Shores that they rent to families for periods of less than thirty days.

Mandalay Shores Community Association is a mutual benefit corporation established for the development of the community. The association adopted a resolution banning short-term rentals (STRs), claiming that it was necessary to reduce parking, noise, and trash problems. Homeowners who rented their homes for less than 30 consecutive days were subject to fines of up to $5,000 per offense.

The Greenfields filed a suit in a California state court against the association, contending that the STR ban violated the California Coastal Act. The court denied the plaintiffs request for a preliminary injunction to prohibit the enforcement of the resolution. The Greenfields appealed.

In the Language of the Court YEGAN, Acting P.J. [Presiding Judge]

The California Coastal Act is intended to, among other things, maximize public access to and along the coast and maximize public recreational opportunities to the coastal zone consistent with sound resources conservation principles and constitutionally protected right of private property owners. The Coastal Act requires that any person who seeks to undertake a development in the coastal zone to obtain a coastal development permit. Development is broadly defined to include, among other things, any change in the density or intensity of use of land. Development under the Coastal Act is not restricted to activities that physically alter the land or water. [Emphasis added.]

The STR ban changes the intensity of use and access to single-family residences in the Oxnard Coastal Zone. STRs were common in [Mandalay Shores] before the STR ban; now they are prohibited.

Respondent asserts that the STR ban is necessary to curtail the increasing problem of short-term rentals which cause parking, noise, and trash problems. STR bans, however, are a matter for the City and Coastal Commission to address. STRs may not be regulated by private actors where it affects the intensity of use or access to single-family residences in a coastal zone. The question of whether a seven-day house rental is more of a neighborhood problem than a 31-day rental must be decided by the City and the Coastal Commission, not a homeowners association. [Emphasis added.]

Respondents STR ban affects 1,400 [housing] units and cuts across a wide swath of beach properties that have historically been used as short-term rentals. A prima facie showing has been made to issue a preliminary injunction staying [prohibiting] enforcement of the STR ban until trial.

DECISION AND REMEDY A state intermediate appellate court reversed the lower courts denial of the Greenfields motion and ordered the issuance of a preliminary injunction. Mandalay Shores Community Association . . . has erected a monetary barrier to the beach. It has no right to do so.

PLEASE ANSWER THESE QUESTIONS:

What type of case is this?

Legal Environment Did the STR ban adopted by the association comport with or contravene its status as a benefit corporation? Discuss.

What If the Facts Were Different? Suppose that instead of adopting an STR ban on its own, the association had petitioned the city and the Coastal Commission to impose one. Would the result have been different? Explain.