Real Estate & Property Law

: California Condo & HOA Law

Who Fixes What When There Is A Common Area Landslide Into A Townhouse?

Here is a not-so-uncommon question of a nature that involves figuring out who is responsible when a problem starts in the common area and "flows" into the private areas of a townhome development.

I own a small lot in a PUD. A landslide occurred in the common area that resulted in damage to the structures. The soil in the common area of the Association gave way and that resulted in a landslide that slid into the townhouses. I am very concerned about the stability of the soil and also want to know who fixes what. The hill behind our complex is very steep. This slope is owned by the association and is part of the common area. Does the Association have legal responsibility to clean up the townhouses, repair the soil in the common area and stabilize the hill behind my lot?

This is obviously a complicated question and there are many factors that may come into play. Any owner or association that finds itself in this situation needs the assistance of some good experts in soil and in legal responsibility aspects. The parties may need coverage counsel to sort out responsibility of another party such as the insurance carriers.

These are the documents that need to be examined as they will dictate (for the most part, and hopefully) who is responsible for what portion of such an event:

The governing documents of the association: In California, the Bylaws, CC&Rs, Articles of Incorporation and any rules or policies related to repairs and maintenance responsibilities need to be examined. One would be looking for areas of responsibility with regard to repairs, insurance required, and maintenance responsibilities.

The insurance policies: The HOA and each individual owner should have insurance coverage for events like this. The HOA policies would generally cover the structures and the owner's policies would generally cover the belongings and often the fixtures and decorations, possibly the flooring and wall covering. One would be looking for primary coverage vs. secondary language, exclusions that may apply to the situation, covered items, and language relating to litigation defense (and whether the limits include defense costs or they are outside the coverage limits).

Expert reports: The cleanup, repair and stabilization efforts are all very involved, too involved for a board member or contractor without hillside stabilization, geological and/or engineering education and experience.

The Board of the HOA will probably direct efforts related to the hillside cleanup, repair, and stabilization. My guess is in most cases the documents will require it. The owners may have responsibility entirely for the inside of their dwellings and any personal property that was damaged (patio furniture, backyard pool equipment, etc.). The question of ultimate responsibility depends on the document review and expert opinions noted above. If any of the parties feels the other is more responsible or responsible for a portion of the development or private townhome than the documents say, then the next question is: was there negligence or intentional conduct that caused the landslide, or did any party fail in a duty or obligation to do their part to protect the hillside stability or the private yard and home areas?

As you can see, this is not an uncomplicated issue and there are many factors that need to be considered. Boards members can get some protection from liability for the decisions that need to be made by consulting the right kind of experts. In legal terms, this is a component of "good faith" that is required in order for the Board member to get some legal "insulation" from liabiity needed to minimize their risks in making decisions.

Full post as published by California Condo & HOA Law on December 10, 2007 (boomark / email).