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Homeowner Associations » Professional Liability

Homeowner Association Liability Concerns

Can a board member be held personally liable when acting on behalf of the board?

According to the California Civil Code §1365 (after January 1, 2014, California Civil Code § 5300), a volunteer officer or director of an association which manages a common interest development that is exclusively residential, shall not be personally liable in excess of the coverage of insurance to any person who suffers injury (bodily injury, emotional distress, wrongful death, or property damage) as a result of the tortuous act or omission of the volunteer officer or volunteer director providing the following criteria are met:

  • The act or omission was performed within the scope of the officer’s or director’s association duties.
  • The act or omission was performed in good faith.
  • The act or omission was not willful, wanton, or grossly negligent.
  • The association maintained at the time the act or omission occurred:
    General Liability Insurance
    Directors and Officers Insurance
  • In the amount of: At least $500,000 if the common interest development consists of 100 separate interests or fewer. At least $1,000,000 if the common interest development consists of more than 100 separate interests.

It is important to remember that this does not limit the liability of the Association or any director or officer for any negligent acts or omissions.


The information above serves only as an overview. Should there be any unanswered questions, there are resources available, such as the California Civil Code, and any lawyer that can be helpful.  

Please note:  As of January 1, 2014,  sections of the Civil Code pertaining specifically to condominium, cooperative, and planned unit development communities in California (the common name for this section of the civil code is called the Davis-Stirling Act) will be renumbered.  Below is an overview.

Former Code Section

As of January 1, 2014

 

1365.7

5800

Director and Officer Liability

1365.9

5805

Limitation of Member Liability

1365(f)(3)

5300 (b)(9)

Disclosure of Insurance Declarations Page

1365(f)(4)

5300 (b)(9)

Insurance Summary Required Language

 

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