Legal Question in Real Estate Law in California

Re: Unlimited Liability for Unreported Problems

It would generally depend on what the CC&Rs, and the articles and by-laws of the association say, and the specific facts surrounding your situation. Without more information, it would be difficult to respond to this question. You should probably seek consulation with an attorney in your area, making sure to provide copies of the CC&Rs, and the articles and by-laws of the association.

Re: Unlimited Liability for Unreported Problems

Without seeing the exact language of your condominium agreement, I can only advise you that the rule of reason would kick in at some point in a lawsuit over the Association's duty to make repairs at its expense. The Association would probably be held liable only for repairs (and consequential damage) to the extent such damage could not be prevented by the unit owner's reasonable cooperation.

In other words, you cannot sit on the sidelines and fail to report leaks with full comfort that the Association has to pay.

I think a plan to save money by having all known problems reported and repaired at once is fair, and knowing failure to cooperate quite likely would be a defense for the Association against an individual owner's claim.

On the other hand, if an individual unit owner was genuinely unaware of some leaks that required repair, and thus failed, without fault, to make a timely report, the Association would probably still be liable.

The bottom line is that courts interpret contracts to include a covenant of reasonableness and good faith, including a duty to mitigate damages and to cooperate with the other party.