Many clients come to us with the question: What are my rights when I experience water intrusion and/or damage to my home? The answer requires analysis of the cause of the leak, the homeowner’s CC&Rs, and other information.
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An HOA, through its board of directors, has a duty to enforce its governing documents. (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 373-374, 380-383.) The enforcement of CC&Rs must be “in good faith, not arbitrary or capricious, and by procedures which are fair and uniformly applied.” (Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600, 1610; Nahrstedt, supra, 8 Cal.4th at p. 383; Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App 3d 642, 650-652.) “This statutory presumption of reasonableness requires that recorded covenants and restrictions be enforced “‘unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit.’” (Market Lofts v. 9th Street Market Lofts (2014) 222 Cal.App.4th 924.)
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The short answer to this common questions is: Maybe.
In general, California’s HOA laws protect volunteer board members from personal liability. (Civ. Code §5800; Corp. Code §5047.5(b).) Directors of an association have no vicarious liability for torts of the association, even though they are the policymakers that control the association’s conduct. (Frances T. v. Village Green Owners Assn. (1986) 42 Cal. 3d 490, 504.) Directors and officers can also be indemnified by their association if they had no reasonable cause to believe their conduct was unlawful. (Corp. Code §7237.) The Corporations Code extends further protections under the Business Judgement Rule. Further, many CC&Rs and bylaws both protect officers and directors of HOAs from liability for negligence while in office. Often, the HOA’s insurance policy will cover directors and officers for errors and omissions made while in office.
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Many HOAs provide policies and procedures for architectural improvements, modifications, or changes to homeowners’ properties. In fact, HOA’s are actually required to adopt written procedures for reviewing architectural applications. The procedure must provide prompt deadlines for review by the association. The procedures must be included in the association’s governing documents, i.e., the rules and regulations or architectural guidelines. (Civ. Code §4765(a)(1).) Those rules are often called “Architectural Guidelines” or something similar and they establish the HOA’s application process, specifications, and other requirements for such changes. Those guidelines are often contained within the HOA’s Rules and Regulations, or even in a formal architectural standard. For example, an HOA may provide specific paint colors that can be used on the exterior of a home, height restrictions, wood flooring installation methods, etc.
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In most litigation cases, you can’t get your attorneys fees back. But HOA litigation is different. The California legislature recognized that if attorneys’ fees weren’t available, CC&Rs would be largely unenforceable. Litigation is expensive. Often, the cost of litigation is so prohibitive that HOAs would run roughshod over homeowners, secure in the knowledge that it would be just too expensive to fight back or that the cost of fighting back would dwarf the benefit of winning.
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Homeowners’ associations (HOAs) play a significant role in maintaining the quality and value of properties within a community. However, disputes between homeowners and HOAs are not uncommon, and these disputes can sometimes escalate to lawsuits. One critical question that often arises in these legal battles is whether homeowners can recover their attorneys’ fees if they win the lawsuit.
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