Condos allow for a unique ownership opportunity because owners are given exclusive rights to their individual condominium units. They also allow for a collective interest to use and enjoy the entire property within certain limitations.
As a result, condo unit owners are responsible for all repairs inside their unit. However, when a construction defect is discovered inside a condominium, it brings about a conversation as to who is indeed responsible. Is it the owner or the contractor or the condo association? Let’s take a better look to see who in fact needs to take ownership over a condo defect.
The Association Directors’ Responsibility
When a condo defect is detected by the owner, the first thing they are encouraged to do is contact their condo association. This is an important step in the process as any defect, such as a leak that seeps into a shared wall, should be dealt with immediately. But when a claim like this is made and not handled well enough, a condo owner may bring a negligence claim against the condo association’s directors.
Having the right D&O insurance for condo associations will help to provide the financial safeguard needed in the event of an allegation. Condo owners who feels that their association is at fault for a defect and are then held liable for the problem can turn around and call out directors and officers for being negligent.
Negligence in Design
Speaking of negligence, courts have been known to err on the side of the plaintiff, or the person making a claim against the condo association. For example, in 2014, the California Supreme Court ruled on a dispute between an HOA for a San Francisco condominium project and two architectural firms involved in the design portion of the project. The owner of the condo in question made a negligence claim on behalf of all those who lived in the condo complex, pointing out that negligent architectural designs brought on defects. These defects made the condo units known as “uninhabitable and unsafe during certain periods due to high temperatures.”
The plaintiff’s lawsuit claimed negligent design, causing defects like extensive water infiltration, inadequate fire separations, structural cracks, and other hazards. The court ruled in favor of the plaintiff and found the defendants, including the condo association, liable for negligence in design.
Condo associations need to understand the risks of negligence in design among other claims that can be made against them. D&O insurance for condo associations will help to protect officers in a condo association but making sure to keep away from defects can curb further problems in future projects.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (877) 807-8708 to speak with one of our representatives.