Plaintiffs Doug Ridley and Sherry Shen owned a condominium in the Rancho Palma Grande community association. Plaintiffs reported flooding in the common area crawlspace underneath their unit. Upon investigation, the association determined an abandoned well was the likely source of the water but did not take further steps to locate the well or remediate the water intrusion. A consultant recommended drying out the crawlspace where mold had already developed, but the mold was not fully remediated until over a year later.

Plaintiffs filed a lawsuit against the association and the board president for failure to maintain and repair the common areas. After a lengthy trial, plaintiffs prevailed.  The trial court held the CC&Rs imposed a duty on the association to maintain and repair the common area, including the crawlspace. The duty to maintain and repair included a duty to investigate and remediate water intrusion within a reasonable time. In turn, the association was required to perform the specified work on plaintiffs’ unit. The trial court awarded damages for restoration costs, lost rent, utility, and emotional distress in addition to punitive damages, in the amount of $250,000 against the association and $25,000 against the board president.

The association and board president appealed the judgment. Upon review, the appellate court affirmed the trial court’s judgment, holding that a community association’s governing documents are enforceable equitable servitudes and that individual owners may enforce the governing documents against the association. The appellate court based its holding on the rationale that there was substantial evidence that the association breached its duties. First, the association was on notice of the potential source of the water intrusion but made no attempt to locate and seal the well. Second, the association failed to repair the unit in a timely fashion as it took over a year to mitigate damage in the crawlspace.

TAKEAWAY: Community associations generally have a duty to maintain the common areas, and a community association’s failure to investigate and timely remediate water intrusion and mold in common area will result in liability.