Legal Question in Real Estate Law in California

Re: Being duped

Analysis of this situation would begin with a careful read-through of the settlement agreement, followed by learning whatever can be learned about the Board's and the builder's complaint and defenses, strength of the evidence each had, legal strengths and weaknesses, and how the settlement was reached. Some of this is public information; a lot of it is not, and whether individual owners can demand or coax it out of the Board, the Board's attorney, or maybe even the builder, is problematic. In any case, the Board probably has full power to settle cases like this, and 40K over 50 units is only $800 each, and proving that a Board did not act in good faith or that it failed to meet its fiduciary responsibility to show some backbone and not sell the owners "down the river" would be difficult and expensive.

Many lawsuits, probably most, are settled on the basis of compromise. Maybe trial of this suit would have cost more than $40K in attorney and expert witness fees, and there is always the risk that the Board could lose the suit or win, but be awarded less in damages than it got by settling.

Judges and mediators have a saying that "an out-of-court settlement is probably a darn good one when BOTH parties walk away from the bargaining table grumbling about the result" or words to that effect. The builder or its insurer probably wasn't delighted about what it had to pay, either.