Post Earthquake Responses to Severe Earthquake for Homeowner Associations

Following is a list of post earthquake responses for homeowner associations. Many of the listed responses will also apply to owners of individual homes and apartment buildings:

  • Have your homeowner association attorney review your CC&Rs and advise you with regard to the following:
  • Procedures for approving reconstruction, demolition, or the sale of the entire property;
  • Notification requirements of mortgage lenders;
  • Notification of any lender to the association;
  • Insurance claims and distributions;
  • Special and emergency assessments;
  • Temporary or permanent termination of vendor contracts;

Make certain the attorney hired by the association has extensive knowledge and experience in HOA law, construction matters, insurance claims and bad faith, and real estate partition actions;

  • Retain a structural engineer as soon as possible to advise the board on the extent of the damage incurred. After a severe earthquake, it may be difficult to obtain structural engineering services. An experienced construction attorney or your management company will be able to assist you in making a selection. Do not trust your insurance company’s engineer to protect your interests;
  • Have your management company apply for FEMA Relief. FEMA is the Federal Emergency Management Agency;
  • Suggest that every owner and renter review their individual insurance policies, obtaining professional advice as needed. Owners and renters should determine whether they have coverage for loss of use and relocation expenses. Owners should determine if they have loss assessment coverage and what is covered/excluded by the endorsement;
  • Provide all members of the association with all reliable and relevant information about the damage incurred, the cost of making repairs, the amount of insurance proceeds estimated to be available, and any anticipated shortfall. Provide copies of all profession reports after first checking with the association’s legal counsel;
  • Those members of the association who are renting their homes should review their lease in order to determine their rights and obligations. Likewise, tenants should do the same;
  • Have your management company obtain a list of all senior lenders that have made loans to members of the association. It will probably be necessary to obtain their consent to either reconstruct, demolish, or sell the entire property. If a partition action is required, the lenders will have to be named parties;
  • A qualified attorney should review all vendor contracts, including any leases, regarding temporary or permanent termination;
  • If the association has borrowed funds, a renegotiation of the payment terms should be explored;
  • The board should re-evaluate its budget very carefully. Your management company can assist you with this. Some expenses will increase while others will decrease. Delinquencies are likely to increase substantially. Adjust your level of assessments to reflect the new budget and include a realistic, conservative contingency;
  • Advise all members of the association to contact the County Assessor’s Office regarding a downward reassessment of each home’s value for tax purposes, or hire a consultant to represent every member of the association in obtaining a reassessment for tax purposes; and
  • Consider whether your management company has the ability to provide your association with the services you will require. This is where experience becomes critically important.
  • Before hiring a contractor to start reconstruction, obtain detailed bidding specifications from independent, unbiased professionals. An experienced construction manager can assist you with this.



San Diego HOA Management