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CALIFORNIA CIVIL CODE 2007
Article 3 Insurance
§ 1365.7. Personal liability of volunteer officer or
director for injury
§ 1365.9. Liability for common areas; Action against
association; Insurance requirements
§ 1365.7. Personal liability of volunteer officer or
director for injury
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.
Added Stats 1988 ch 1188 § 1. Amended Stats 1992 ch
866 § 2 (AB 2693).
Amended Stats 1996 ch 185 § 1 (SB 1711).
ANNOTATIONS
ANNOTATIONS
Amendments:
1992 Amendment:
(1) Substituted the introductory clause of subd (a) for former
introductory clause of subd (a) which read: "Any person
who suffers bodily injury, including, but not limited to,
emotional distress, or wrongful death as a result of the tortious
act or omission of a volunteer officer or volunteer director
of an association managing a common interest development which
is exclusively residential, as defined in subdivision (a)
of Section 1351, shall not recover damages from a volunteer
officer or volunteer director if all of the following criteria
are met:"; (2) substituted "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" for
"general liability insurance in either of the following
amounts" in subd (a)(4); (3) amended subd (c) by (a)
adding "was a declarant, as defined in subdivision (g)
of Section 1351, or who"; and (b) deleting "as defined
in subdivision (g) of Section 1351," after "from
the declarant,"; and (4) amended subd (e) by substituting
(a) "is a tenant of a separate interest" for "resides"
after "or director who"; (b) "or is" for
"either as a tenant or as" after "interest
development"; and (c) "the common interest"
for "that" after "separate interests in".
1996 Amendment:
Added subd (f).
Collateral References:
Cal Forms Pl & Practice (Matthew Bender) ch 124 "Condominiums
and Other Common Interest Developments"
Taking a closer look: significant new California legislation
enacted in 1988. 12 CEB Real Prop L Rep No. 2 p 55
Miller & Starr, Cal Real Estate 3d §§ 25:62,
25:63
Rutter Cal Prac Guide, Personal Injury §§ 2:957
et seq
Law Review Articles:
1988 legislative summary. 7 Cal Real Prop J No. 1 p 1
NOTES OF DECISIONS
NOTES OF DECISIONS
In an action against individual owners of condominium units
by a woman injured in a slip and fall on a stairway in the
common area of the 152-unit complex, the trial court erred
in granting summary judgment for defendants on the basis that,
as a matter of law, the individual condominium owners could
not be found liable for injuries sustained in the common area
of the complex. An owner or occupier of real property must
exercise ordinary care in managing the property (Civ. Code,
§ 1714, subd. (a)), the duty of care is owed to persons
who come on the property, and ordinarily it is nondelegable.
Civ. Code, § 1365.7, immunizing a volunteer officer or
director of an association managing a common interest residential
development from civil tort liability, did not apply to the
individual owners. The statute is unambiguous and cannot be
read to immunize individual owners from liability for tortious
acts or omissions in the management and control of the commonly
held property. Ruoff v Harbor Creek Community Assn. (1992,
4th Dist) 10 Cal App 4th 1624, 13 Cal Rptr 2d 755
§ 1365.9. Liability for common areas; Action against
association; Insurance requirements
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.
Added Stats 1994 ch 833 § 1 (SB 2072).
Amended Stats 1995 ch 199 § 2 (SB 300).
ANNOTATIONS
ANNOTATIONS
Amendments:
1995 Amendment:
(1) Added subd (a); (2) designated the former introductory
clause to be the introductory clause of subd (b); (3) amended
the introductory clause of subd (b) by (a) substituting owner
of a separate interest" for "person"; (b) adding
"as a tenant in common"; (c) adding "only"
after "shall be brought"; and (d) substituting "if
both of the insurance requirements in paragraphs (i) and (2)"
for "provided that all of the following insurance requirements";
(4) substituted subd (b)(1) and (b)(2) for former subd (a)
which read: "(a) The association maintained and had in
effect at the time the alleged act or omission occurred and
at the time a claim is made, one or more policies of insurance
which include coverage for (i) general liability of the association
and (2) individual liability of officers and directors of
the association for negligent acts or omissions of those persons
acting in their capacity as officers and directors.";
and (5) deleted former subds (b) and (c) which read: "(b)
Both types of coverage described in paragraphs (i) and (2)
of subdivision (a) are in the following minimum amounts: "(1)
At least two million dollars ($2,000,000) per occurrence if
the common interest development consists of 100 or fewer separate
interests. "(2) At least three million dollars ($3,000,000)
per occurrence if the common interest development consists
of more than 100 separate interests. "(c) The association
shall, upon issuance or renewal of insurance, but no less
than annually, notify its homeowners as to the amount and
type of insurance carried by the association, and it shall
accompany this notification with statements to the effect
that the association is or is not insured to the levels specified
by this section, and that if not so insured, owners may be
individually liable for the entire amount of a judgment, and
if the association is insured to the levels specified in this
section, then owners may be individually liable only for their
proportional share of assessments levied to pay the amount
of any judgment which exceeds the limits of the association's
insurance."
Collateral References:
Cal Forms Pl & Practice (Matthew Bender) ch 124 "Condominiums
and Other Common Interest Developments"
Annotations
Liability of owner or operator of shopping center, or business
housed therein, for injury to patron on premises from criminal
attack by third party. 31 ALR5th 550
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