Developments: Director and Officer Liability.
Statute text
(a) A volunteer officer or volunteer director of an association, as defined in subdivision (a) of
Section 1351, which manages a common interest development that is exclusively residential, shall
not be personally liable in excess of the coverage of insurance specified in paragraph (4) to any
person who suffers injury, including, but not limited to, bodily injury, emotional distress, wrongful
death, or property damage or loss as a result of the tortious act or omission of the volunteer officer or
volunteer director if all of the following criteria are met:
(1) The act or omission was performed within the scope of the officer’s or director’s association
duties.
(2) The act or omission was performed in good faith.
(3) The act or omission was not willful, wanton, or grossly negligent.
(4) The association maintained and had in effect at the time the act or omission occurred and at the
time a claim is made one or more policies of insurance which shall include coverage for (A) general
liability of the association and (B) individual liability of officers and directors of the association for
negligent acts or omissions in that capacity; provided, that both types of coverage are in the following
minimum amount:
(A) At least five hundred thousand dollars ($500,000) if the common interest development consists
of 100 or fewer separate interests.
(B) At least one million dollars ($1,000,000) if the common interest development consists of more
than 100 separate interests.
(b) The payment of actual expenses incurred by a director or officer in the execution of the duties of
that position does not affect the director’s or officer’s status as a volunteer within the meaning of this
section.
(c) An officer or director who at the time of the act or omission was a declarant, as defined in
subdivision (g) of Section 1351, or who received either direct or indirect compensation as an employee
from the declarant, or from a financial institution that purchased a separate interest, as defined
in subdivision (l) of Section 1351, at a judicial or nonjudicial foreclosure of a mortgage or deed
of trust on real property, is not a volunteer for the purposes of this section.
(d) Nothing in this section shall be construed to limit the liability of the association for its negligent
act or omission or for any negligent act or omission of an officer or director of the association.
(e) This section shall only apply to a volunteer officer or director who is a tenant of a separate
interest in the common interest development or is an owner of no more than two separate interests in
the common interest development.
(f) (1) For purposes of paragraph (1) of subdivision (a), the scope of the officer’s or director’s
association duties shall include, but shall not be limited to, both of the following decisions:
(A) Whether to conduct an investigation of the common interest development for latent deficiencies
prior to the expiration of the applicable statute of limitations.
(B) Whether to commence a civil action against the builder for defects in design or construction.
(2) It is the intent of the Legislature that this section clarify the scope of association duties to which
the protections against personal liability in this section apply. It is not the intent of the Legislature
that these clarifications be construed to expand, or limit, the fiduciary duties owed by the directors or
officers.
History
(1988 ch. 1188, 1992 ch. 866, 1996 ch. 185)
Section 1365.9. Tort Actions Arising Out of Ownership Interest in Common
Area of Common Interest Development Brought Against Association
- Insurance Requirements.
Statute text
(a) It is the intent of the Legislature to offer civil liability protection to owners of the separate
interests in a common interest development that have common areas owned in tenancy-in-common if
the association carries a certain level of prescribed insurance that covers a cause of action in tort.
(b) Any cause of action in tort against any owner of a separate interest arising solely by reason of an
ownership interest as a tenant in common in the common area of a common interest development
shall be brought only against the association and not against the individual owners of the separate
interests, as defined in subdivision (l) of Section 1351, if both of the insurance requirements in
paragraphs (1) and (2) are met:
(1) The association maintained and has in effect for this cause of action, one or more policies of
insurance which include coverage for general liability of the association.
(2) The coverage described in paragraph (1) is in the following minimum amounts:
(A) At least two million dollars ($2,000,000) if the common interest development consists of 100 or
fewer separate interests.
(B) At least three million dollars ($3,000,000) if the common interest development consists of more
than 100 separate interests.
History
(1994 ch. 833, 1995 ch. 199)
Section 1366. Levy of Assessments - Purposes - Delinquency.
Statute text
(a) Except as provided in this section, the association shall levy regular and special
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