Weldon L. Brown Co, Inc.

07/08/2026

THE PROS AND CONS OF EARTHQUAKE COVERAGE IN HOA's

As residents in California we are in "Earthquake Country." This doesn't mean Condominium/Townhome associations that have to insure all the habitational units need to run out and purchase earthquake insurance or increase their limits if they have it. However, this is a good time to review the pros and cons of earthquake insurance.

CONS
• The most obvious is that it can be expensive.
• Sizeable deductibles (i.e. 10-20% of the replacement cost “per
building” at the time of loss.

PROS
• In the event of an Earthquake having coverage with an AM
Best Insurance A-Rated carrier..
• Secondly, it allows individual unit owners to more easily
acquire earthquake loss assessment on their individual unit
owner policies (HO-6 Condo Policy)
• By having earthquake, it removes and/or decreases the need
to "special assess" all the unit owners; even those that didn't
have their units damaged.

Many Boards of Directors have also expressed concern throughout the years about a carrier's ability to pay a loss. This might be true after the "big one," if all Associations were insured. However, the fact is that less than half of the Associations in California purchase earthquake coverage. Carriers are also careful not to write too much coverage in any one zip code (zone). This helps to insure they will not be financially decimated in the event of an earthquake. In addition, after the large 1994 Northridge earthquake, we are unaware of any carriers who were financially unable to meet their coverage obligations.

Many associations have to borrow after an earthquake. Those who have to borrow that also have earthquake coverage will find it easier and quicker to obtain a loan as the lender will see the coverage as "collateral" against their loan.

Many Associations are also not aware that they can purchase partial limits. Earthquake insurance is sold differently than other property insurance in that the Association does not have to purchase full coverage. For example, an association valued at $30,000,000 can purchase limits of $5,000,000/$10,000,000/$20,000,000 or for basically any increment they desire. In this fashion, an Association can purchase a limit that is more budget friendly while still carrying some coverage. This is extremely important for Board members as most Directors and Officers liability policies do not provide coverage against allegations of failing to adequately procure and/or maintain earthquake insurance.

UNDERSTANDING EARTHQUAKE DEDUCTIBLES
For condominium and town home associations that carry earthquake insurance and for those associations that have looked into obtaining quake coverage; the one thing that continues to cause the most confusion for Property Managers, Board members and homeowners is the deductibles on earthquake policies. We hope the below information will make this easier to understand.

DEDUCTIBLES/LOSS LIMITS

5, 10, 15 and 20% per building are the deductibles offered on earthquake coverage with 15% and 20% the most common. This is mainly due to budgetary concerns and the fact that the higher deductibles offer lower annual premiums. However, the lower the deductible the less money the association will pay out of pocket in the event of an earthquake. These deductibles are usually accompanied with either a $25,000 minimum per occurrence or $50,000 minimum per occurrence. Budgets also determine the "loss limit" an Association can carry. The most common loss limits are 5, 10 and 20 million but lower and higher limits are available.

EXAMPLES

For the sake of illustration, let’s say California experiences an earthquake and an association suffers a complete loss to two of its 4-unit buildings.

**Please note when the inspector comes out to survey the damage that when he/she determines the buildings are a complete loss that they use what the “replacement cost is to rebuild and not the real estate value”.

4 UNIT BUILDING
(Since 20% is the most common deductible we will use it in this example)
Inspector comes out and determines this building is in fact a total loss.
Building is measured to be 8,000 total square feet.
Inspector/Company determines the replacement cost to rebuild will be $100 Per Square foot.
(8,000 Square Feet X $100 = $800,000) 20% of $800,000 = $160,000.

In this example the Association would have to pay the $160,000 deductible for each of the two buildings ($320,000 total) and insurance company (earthquake carrier) would pay the balance of $1,280,000.

15% & LOWER DEDUCTIBLE OPTIONS
Using the example above, the Association would only have to pay $120,000 with a 15% deductible. This would be a savings of $40,000 for each of the two 4-unit buildings.

You can apply this formula to buildings with different unit counts and you can also apply this formula to a 5 or 10% deductible.
Information provided by Armstrong/Robitaille/Riegle
Business and Insurance Solutions

07/07/2026

BOARD MEETINGS DEFINED -

Board meetings are defined by the Davis-Stirling Act as a gathering of a majority of directors at the same time and place to "hear, discuss, or deliberate upon any item of business that is within the authority of the board." (Civ. Code §4090.)

Business Defined. "Item of business" means any action within the authority of the board, except those actions the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a majority of the directors. (Civ. Code §4155.)

Exceptions. Not all gatherings of directors are "board meetings." See exceptions.

Allowable Meetings. With proper notice, the following meeting forms are allowed:

•In Person. Directors can meet in person at a physical location.

•Tele-Video Conference. Directors meet via teleconference, whether by telephone or video conference. (Civ. Code §4090(b))
Disallowed Meetings. •Unanimous Written Consent. Unanimous written consents can no longer be used for actions without a meeting.

•Email. Email meetings are prohibited except for conducting emergency meetings.

• Chain & Wheel Hub. Attempts to avoid open meetings by using chain or wheel hub meetings are disallowed.

EXCEPTIONS TO OPEN MEETING ACT
In addition to executive session matters, a majority of directors can attend committee meetings, seminars or social events without violating the Davis-Stirling Open Meeting Act, provided they do not "hear, discuss, or deliberate upon any item of business that is within the authority of the board," i.e., engage in board business. Although not specifically covered in the Davis-Stirling Open Meeting Act, these issues have already been addressed for public agencies in the Bagley-Keene Act and the Brown Act. They provide good guidelines on what boards can and cannot do.
Bagley-Keene Act. The Bagley-Keene Open Meeting Act governs meetings of local governments and closely parallels the Brown Act. Bagley-Keene states that boards have three duties: (i) give adequate notice of their meetings, (ii) provide an opportunity for public comment, and (iii) conduct their meetings in open session, except where a closed session is specifically authorized. All three principles were incorporated into the Davis-Stirling Open Meeting Act. As provided for in Bagley-Keene, not all board gatherings violate the Act. A majority of directors can gather for the following purposes provided they do not discuss board business among themselves:

•A conference or similar gathering open to the public. (Gov. Code §11122.5(c)(2))

•An open and publicized meeting organized to address a topic of state concern. (§11122.5(c)(3))

•A purely social or ceremonial occasion. (§11122.5(c)(5))

•An open and noticed committee meeting, provided board members who are not members of the committee attend only as observers. (§11122.5(c)(6); see Guide To Bagley-Keene Open Meeting Act)

Brown Act. Similarly, under the Brown Act (Gov. Code §54952.2(c)), the following actions would not be considered a violation:

(1) Individual contacts or conversations between a member of a legislative body and any other person.

(2) The attendance of a majority of the members of a legislative body at a conference or similar gathering open to the public that involves a discussion of issues of general interest to the public or to public agencies of the type represented by the legislative body, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled program, business of a specified nature that is within the subject matter jurisdiction of the local agency. Nothing in this paragraph is intended to allow members of the public free admission to a conference or similar gathering at which the organizers have required other participants or registrants to pay fees or charges as a condition of attendance.

(3) The attendance of a majority of the members of a legislative body at an open and publicized meeting organized to address a topic of local community concern by a person or organization other than the local agency, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled program, business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency.

(4) The attendance of a majority of the members of a legislative body at an open and noticed meeting of another body of the local agency, provided that a majority of the members do not discuss among themselves, other than as part of the scheduled meeting, business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency.

(5) The attendance of a majority of the members of a legislative body at a purely social or ceremonial occasion, provided that a majority of the members do not discuss among themselves business of a specific nature that is within the subject matter jurisdiction of the legislative body of the local agency.

Attorney General Opinion. In addition to the above, the Office of the Attorney General issued an opinion that under the Brown Act board members may attend committee meetings provided they do not ask questions or make statements. (81 Ops.Cal.Atty.Gen. 156.)
OPINION. If HOA boards follow public agency guidelines, a majority of directors can attend committee meetings, seminars and social gatherings without violating the Open Meeting Act

07/07/2026

Camelot HOA - Thou shall abide by the Association's doctrine or reap the wrath of enforcement. You can have only five chickens and where is William Wallace? Do you confess??? This is a tough HOA. Their enforcement action is extreme and severe, but violators are few.

07/07/2026

SOLAR ENERGY SYSTEMS & ASSOCIATION'S -

California promotes the use of solar energy systems. Accordingly, associations cannot (i) prohibit solar energy systems, (ii) impose restrictions that significantly increase their cost, or (iii) impose restrictions that significantly decrease their efficiency. (Civ. Code §714.)

Solar Water Heating. For solar water heating systems, associations cannot impose requirements that will decrease efficiency or increase installation costs by more than 10%.

Solar Energy. For solar energy systems, associations cannot impose requirements that will decrease efficiency by more than 10% or increase installation costs by more than $1,000. As provided for in Civil Code §714.1, associations may impose reasonable provisions that restrict the installation of solar energy systems installed in common areas. "Reasonable" restrictions are those where solar units were comparable in performance and cost to unapproved type of unit homeowner sought to install on the roof of his home. (Palos Verdes Association v. Rodman.)

Common Area Installations. At this point, it is unclear whether owners have the right to install solar systems in the common areas. It appears that the stronger argument is that they do not. Members do not control the common areas; all such control is through an elected board of directors. Moreover, any installation in the common areas would result in an exclusive use easement which, per Civil Code §4600, requires approval by 2/3rds of the membership.

Exclusive Use Roofs. Townhouse owners with exclusive use common area roofs have a better argument that they have a right to install solar panels on their roofs. However, if the association is obligated to maintain those roofs, it raises significant issues related to the increased cost of maintenance and whether those costs can be billed to the owners who install solar panels.

Architectural Review. If an application is not denied in writing within 60 days from the date of receipt of the application, the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information. If approvals are willfully avoided or delayed, an association can be penalized up to $1,000. (Civ. Code §714(f).) Aesthetics are a proper part of the architectural review process, provided it does not significantly increase the cost of the installation. (Tesoro del Valle v. Griffen.)
Associations should adopt written architectural standards in consultation with legal counsel regarding the installation of solar energy systems.

07/07/2026

NEIGHBOR DISPUTES -

There was a time when boards were advised to stay out of neighbor to neighbor disputes. Unfortunately, the legislature and the courts have increasingly pushed associations into the role of resolving disputes internally. This seems to extend even to claims of harassment, threats, and physical altercations. There are four lines of reasoning that seem to argue for the board intervention in some disputes.

Peaceful Enjoyment. Owners have a general right to peacefully enjoy their property. Because associations have the power to impose fines and suspend privileges, boards have a duty to intervene under the nuisance provisions of their CC&Rs to stop owners from disturbing the peace.

Health and Safety. In addition to nuisance restrictions, most documents contain general statements that the association's purpose is to provide for the health, safety and welfare of the membership. If an owner poses a threat to other members, the board may have a duty under these provisions to protect the membership from such threats. Often, the issue is one of scale. If one person is threatening another, the aggrieved party can seek a restraining order. If the threat of harm is directed to multiple members of the association, the board may need to step in.
Landlord Tenant Relationship. Under landlord-tenant law, landlords must protect members against foreseeable harm and provide for quiet enjoyment by curbing a tenant's disruptive conduct. California's Supreme Court has already compared associations to landlords and owners to tenants. That analogy will likely carry over to a board's duty to protect members from an abusive, harassing or threatening owner.

Fair Housing Act. Duties may also be imposed by federal law. In a Washington D.C. case, a female owner was harassed by her neighbor who allegedly shouted racial epithets and made sexual comments to her. The woman asked her condominium association to take action to stop the harassment. The association wrote letters to the neighbor but took no further action. The woman sued the association alleging violation of the Fair Housing Act because it failed to take action against her neighbor. When the federal district judge ruled that the association could be held liable for its inaction, the association settled the case by paying the owner $550,000 and buying her condo. (Reeves v. Carrollsburg.)

Boards should hold hearings with feuding neighbors and make it clear that any disruptive behavior such as loud stereos, banging on the walls, shouting matches in the common areas, etc. will result in fines and suspension of privileges (as provided for in the governing documents). If the board determines that an owner is a threat to the membership, the board may have an obligation to take further action, such as seeking a restraining order. When faced with these kinds of situations, boards should seek legal counsel.
Adams Stirling

07/07/2026

Maintenance Responsibilities CONDOS vs PUD’s

Condo Maintenance -

In a condominium development, definitions of separate interests, common areas and exclusive-use common areas are especially important because maintenance responsibilities can vary for each of these defined areas.

Maintenance Responsibilities. Unless CC&Rs provide otherwise, the association is responsible for repairing, replacing, or maintaining the common area, other than exclusive use common area, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the separate interest.
(Civ. Code §4775(a).)

Common Area is defined as the entire common interest development except for the separate interests in the development. (Civ. Code §4095(a).)

Separate Interest. The "separate interest" of a condominium is the air space bounded by the interior unfinished surfaces of the perimeter walls, floors, ceilings, windows, doors. (Civ. Code §4185(b).) In interpreting deeds, the existing physical boundaries of a unit are conclusively presumed to be its boundaries rather than the metes and bounds expressed in the deed or condominium plan. (Civ. Code §4220.)

Improvements. Everything inside that air space including light fixtures, light switches and outlets, carpet, hardwood floors, paint and wallpaper, toilets, tubs, showers, sinks, appliances, cabinets, counter tops, etc. are improvements to the unit which are owned by the homeowner. Unless the governing document state otherwise, members are responsible for insuring, repairing, and replacing improvements in their units.

PUD Maintenance -

Unless the CC&Rs provide otherwise, the association is responsible for repairing, replacing, or maintaining the common areas, and owners are responsible for maintaining their separate interests and any exclusive use common areas appurtenant to their separate interests (Civ. Code §4775(a)) which means a separately owned lot, parcel, area, or space. (Civ. Code §4185) "Separate Interest".)
Maintenance Duties. In most planned developments, depending on the CC&Rs, maintenance responsibilities are generally allocated as follows:

1. Owner Entirely Responsible. In planned developments where the homes are single family residences, owners are responsible for maintaining all aspects of their house and lot unless the CC&Rs provide otherwise.

2. Shared Responsibilities. In some documents, maintenance of the roofs and painting of the exteriors is assigned to the association. All other aspects of repairs and maintenance are assigned to the owner. This is especially true when the homes are constructed in "pods" or "clusters" with shared walls.

Enforcement. When owners fail to maintain their property, the association can enforce maintenance standards as provided for in the governing documents.

RECOMMENDATION: If your documents are unclear, the ambiguities can be resolved through amendments or restatements. If your association is interested in amending or restating its CC&Rs, it should discuss this process with its legal counsel.

07/07/2026

Always hire qualified, licensed and insured contractors on your community projects. Having the job done right is for the protection of the Association, its members and the Board. Apply the "Business Judgment Rule" when considering these projects and not using unqualified personnel. Going against this protocol puts the Association and Board of Directors at risk. Watch the video here as an example.... In trying to save a buck to many Boards hire The Three Stooges to repair their plumbing problems.

To many of our clients have hired The Three Stooges to repair their...

07/07/2026

OPEN FORUM - Important information on how to conduct this portion of your Board Meetings. Done correctly this can be performed effectively and efficiently.

Open Forum. As provided for in the "Open Meeting Act," association members have the right to speak at open meetings of the board. (Civ. Code §4925, §5000(b).) This commonly referred to as the "Member Comment Period" or "Open Forum" portion of the meeting. Members have a right to observe the conduct of the board's business but they do not have a right to participate in the meetings. With some exceptions, this is the same policy followed by municipalities at city council meetings.

Inviting Comments. Although members do not have a legal right to participate in board discussions and votes, boards can invite comments from the audience on particular items of business if they so choose. This is at the discretion of the board. Once a motion and second has been made on an item of business, the president may invite comments from the audience. Once comments have been received, discussion can be closed and a vote taken by the directors (or the matter tabled).

Time Allocation. The only time members have a right to participate in meetings is during the "open forum" portion of an open (non-executive session) meeting (Civ. Code §4925, §5000(b)) and only for a reasonable time established by the board. Members can ask questions but directors are limited in how they can answer them.
Unreasonable Rules. Boards cannot create unreasonable rules that would stifle homeowners' right to address the board. There is no limit on the number of topics owners may address during Open Forum. The Open Meeting Act allows the board to establish reasonable time limits but there is no limit on the number of topics. (Civ. Code §4930(a).)

Disruptive Behavior. Members do not have unlimited free speech rights. The right to address the board does not give members the right to shout, use profanity or make obscene or threatening remarks. Members who engage in such behavior may be ejected from the meeting. Directors should not attempt to physically remove a member who refuses to leave. Instead, the police may be called to es**rt the person out of the meeting or, in lieu of calling the police, the meeting may be adjourned to another location without the disruptive person. In addition, the disruptive person may be fined for their behavior if there are rules against such conduct. Following are sample meeting rules:

MEETING RULES: No audio or video recording allowed by attendees. However, the Secretary may record the meeting to aid in the preparation of minutes. The recording is deleted once the minutes have been prepared. As provided in the "Open Meeting Act," members may observe the meeting but do not have the right to participate in the Board's deliberations or votes. Members may address issues during the Open Forum portion of the meeting. Attendees may not engage in obscene gestures, shouting, profanity or other disruptive behavior. If attendees become disruptive, they may be expelled from the meeting and fined.

To ensure everyone is aware of the rules, boards should consider printing them on each meeting's agenda

07/07/2026

Is your Community Homeowners Association next to a golf course? Here are sample screening solutions that may be helpful in combating the ongoing and costly saga of unwanted aerial bombardment from golf balls and the distant yell of “FORE!!!!”

07/07/2026

Ever have that dreaded evil person come to the Association's Board Meetings and you hear this music cue every time it happens…..

Darth Vader's first appearance.