The Facts of the Case: Various Jared Court Homeowner Association units sustained water intrusion and flooding damage through the below-grade common area building foundations. The Association filed a construction defect lawsuit against the developer. That case was settled, and the proceeds were used to repair and waterproof the below-grade garages and bonus rooms.
However, that first round of waterproofing repairs was itself defective, so the Association sued the repairing contractor. That lawsuit was also settled, and in 1998 the Association used a portion of the proceeds to perform a second round of water intrusion repairs to the below-grade foundation areas. The contractor advised the Association that due to the existing hydrostatic pressures it could not guarantee there would not be additional water intrusion problems in the building’s below-grade areas.
Between 1998 and late 2004, there were no further water intrusion issues. However, in January 2005, the Calemines’ garage and bonus room suffered water intrusion damage during a period of excessively high rainfall.
The Association board considered various factors, including the advice of its construction experts and counsel, and then decided that it would not pay for a third attempt to repair and waterproof the below-grade portions of the units.
The Lawsuit: The Calemines filed a lawsuit against the Association, seeking to compel the Association to make common area repairs so as to prevent water intrusion and flooding into the lower level of their condominium.
The Decision of the Court: In the unpublished opinion of Calemine v Jared Court Homeowners Association (February 17, 2009), the Court of Appeal ruled in favor of the Association.
The Reasoning of the Court: Under the California Supreme Court’s Lamden opinion, the courts will not second guess reasonable, good faith decisions regarding the maintenance, control and management of the common areas which are in the association’s best interest.
The Jared Court HOA board reasonably and in good faith determined that further repairs were not in the best interest of all homeowners. The Association did not simply close its eyes and ignore the water intrusion issues. Rather, the board attempted to address these problems over many years by filing two lawsuits and executing two sets of repairs – which resolved the water intrusion problems until one year of record rainfall occurred.
The board’s decision not to pay for a third set of repairs was properly based on a number of factors, including “the cost of the work, the impact to all homeowners created by six months of major construction involving the removal of hardscape and landscape, the fact that the water intrusion did not occur in habitable areas of the condominium, the effect of prior repairs which eliminated water intrusion except in the event of record rainfall, and the fact that the water intrusion had neither imperiled the structural integrity of the building nor caused hazardous mold.”
Comment: This case shows that in an appropriate situation, a board of directors can reasonably make a decision not to make common area repairs – at least where it had twice attempted similar repairs, and there were neither personal injuries nor impairment to the structural integrity of the building caused by the failure to repair. However, read this case with caution, as it is not published (cannot be cited in court), and there are other published cases which place more emphasis on the board’s responsibility to repair and maintain the common areas.