Seismic Risk HOA’s Should Consider

Owners of Common Interest Developments and association boards should really look at earthquake risk mitigation. Sometimes we all forget that we live in an area of high seismic activity, and it is just a matter of time before we are hit with a quake that could be moderate, large or the big one. Scientists have long said this region is long overdue for a large earthquake on the San Andreas Fault that could kill thousands and result in billions of dollars in damage. The last major earthquake in the southern California area was in 1857 centered in the Fort Tejon area. There have been several moderate sized quakes in the last fifty years including the Sylmar quake in 1971, Whittier/Narrows in 1987, and Northridge in 1994.

Remember, if an association does not have coverage (and 90% of HOA’s don’t) ALL owners will be equally responsible for damage to units in the complex even if their unit is not damaged (many owners in CID’ s after the Northridge quake in 1994 walked away from the property.

Also, if an individual owner does not have an HO-6 policy for interior walls, improvements, additions/alterations, and personal property.(many HOA’s cover this in their master policy) then you will not be able to obtain individual earthquake coverage.

The board should look into is whether the governing docs have a ‘duty to insure’ clause. Check to see if there is a ‘power to borrow’ or ‘dissolve’ an HOA in the event of the major disaster like an earthquake, and by all means check gas shutoff valves, non-restricted exclusive use common area located water heaters and second floor balconies.

Always seek the advice of an attorney with experience in HOA. If you need a referral, feel free to reach out. For non-legal related HOA matters call or email me if your association needs a consultant.

M.A. Williams, Broker

DRE Lic#01468935