By Matt Cortina
An Orange County Superior Court judge determined in a tentative ruling on Monday, June 27 that a sober living home in Talega was not operating as a business, but did violate the homeowners’ associations rules regarding nuisances. Judge Craig Griffin ruled the sober living home could continue to operate as long as it requested a property management license from the city and adhered to the neighborhood’s noise, smoking and conduct regulations.
Lawyers for the co-plaintiffs—the city of San Clemente and David Hurwitz, a Talega resident next to whom a sober living home is operating—asked Griffin to order an immediate injunction that would’ve required the sober living home (run by Sober Network Properties LLC, the defendant) to stop operating. Griffin denied that request.
The judge ruled that the plaintiffs had not yet proven that Sober Network Properties are violating homeowners’ association codes by operating a business out of their Talega residence. Court records indicate the plaintiffs argued that because the home’s manager had received payment from Sobertec (a partner group of Sober Network Properties), that it was operating a business. However, the judge ruled that it would be unjust to qualify the home as a business just because rent is paid or tenants have special living arrangements—many other homes in Talega are leased, or those “types of restrictions are frequently imposed by parents, roommates and other ‘family’ groups who may permissibly live in the neighborhood.”
“Payment for use of a home is not sufficient to establish operation of a business. Homeowners are free to lease their homes to tenants and receive compensation for that rental. It does not make the home, itself, a ‘business,’” the ruling continued.
However, the judge ruled that Sober Network Properties must file for a business license within 15 days. The key is that the home itself is not a business, but SNP is managing property in the city, including the sober living home. For that, it needs to get a license.
“They need to apply for a business license because they’re operating a business in the city. I don’t think there’s any question about that,” Griffin said.
A lawyer for Joseph Scolari argued that because SNP is based in San Juan Capistrano, all it needs to file for is a property manager’s license in San Clemente.
A second hearing is schedule for August 15 to determine further regulations and living arrangements. Many were looking to this case as a harbinger for how cities regulate sober living homes. Those recovering from alcohol and drug abuse are considered “disabled” and because of the Americans with Disabilities Act, cities and neighborhood associations cannot ban them from living in their area. As many sober living homes operate out of multi-room luxury homes in Southern California, it has caused their neighbors to complain about what they perceive as negative impacts—smoke, noise and safety issues.
The city of Dana Point filed two lawsuits last week against treatment facilities, including one owned by Sobertec. Their justification is that the homes are creating an undue nuisance, and do not have necessary state licensure.
The judge acknowledged in his ruling that the issue of regulating sober living homes is very delicate.
“The question of when and how a ‘group home’ crosses over from a home to a business is complicated and cannot, at this point, be determined as a matter of law,” the ruling read.
It is a business by any other name. It is not a business but requires a business license just does not sit well.
Sobertec charges fees, provides services and reports business income and loss based on the services they offer.
Legally speaking, there is no question here whether the sober living home is a residential use as far as zoning and a homeowners association’s restrictive covenants, rules, or bylaws. It is very well settled that such a home is a residential use — I’ve got five pages of citations to court decisions that say so. While there may have been some doubt prior to President Reagan signing the Fair Housing Amendments Act of 1988 (FHAA), there has been no doubt since then. The FHAA is very clear that a provisions in a homeowners association’s bylaws, restrictive covenants, or rules cannot treat community residences for people with disabilities (which includes Sober Living Homes) as a business. These homes are residential uses, period. Whether or not this particular home is operated as a nuisance is a matter for the court to decide, but the underlying question of whether this is a residential use is well settled throughout the nation.
I do not understand how these homes are not considered businesses. They are renting for much more than market rate and rent is often paid by insurance companies as they are considered continuing treatment.
Dan, you’re so right but that doesn’t stop a slew of rabid Talega homeowners demanding lawsuits. No amount of explaining has made some of those residents understand that the law is not on their side in this regard. (See Tom’s comment above.)
http://www.soberhousing.net/training_courses.html
http://smallbusiness.chron.com/open-sober-living-home-18359.html
https://www.scribd.com/mobile/doc/260555220/Sober-Living-Home-Business-Plan
http://riverbankhouse.net/sober-houses-affordable-sober-living-meets-promise-profit/
There sure are plenty of websites that tell you how to make a good profit. I think that is a pretty big part of the definition of a business. If people were truly concerned about helping these recovering addicts they would not put them in an unsupervised environment like a residential neighborhood. The owners are not licensed or watched over by any standards and therefore are ripe for problems to the public. It is the greed of the owners that drives this dilemma. Pure and simple.
Exactly. Of course we can not expect these profit-making machines to just pack up and go so the fight must go on to get our neighborhoods safe again.
And adding salt to the wound, the success rate of these operations is so low it makes no sense to even use them. Unfortunately they prey on families in their most vulnerable times of seeing a child in trouble. Everyone know this is not the solution!