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ARTICLE · 22 AUGUST 2012

Key Calif. Supreme Court Decision For Developers In Resolving Construction Defect Disputes

Duane Morris LLP
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On August 16, 2012, the California Supreme Court in Pinnacle Museum Tower Association v. Pinnacle Market Development (US), LLC held that arbitration provisions in Covenants, Conditions and Restrictions (CC&Rs) are enforceable against an owners association.

United StatesReal Estate and Construction
Duane Morris
Duane Morris
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On August 16, 2012, the California Supreme Court in Pinnacle Museum Tower Association v. Pinnacle Market Development (US), LLC held that arbitration provisions in Covenants, Conditions and Restrictions (CC&Rs) are enforceable against an owners association. The state Supreme Court's decision settles an area of common interest development (CID) law that was left in flux for several years because of conflicting opinions in the courts of appeal on this issue.

The real estate project involved is a mixed-use residential and commercial condominium CID project located in San Diego, Calif. The owners association that was formed to own and maintain the common areas of the project brought a construction defect lawsuit against the developer. The developer moved to compel arbitration based on provisions in the CC&Rs recorded for the project that required construction disputes with the developer to be resolved through binding arbitration. Both the trial court and California Court

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