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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31687
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Another situation has come up in this very disorganized association.

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Another situation has come up in this very disorganized association. We own only a share thus do not own the land our homes are are situated on these are not responsible for trees etc. Recently a horrible wind storm caused a tree to fall on one of the homes. The association paid for the removal of the tree , however, the shareholder was informed she would have to pay for any home damage. My question is if we own only a share is it the associations insurance that must pay for damage.
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question.

The homeowner's insurance would likely be the one to provide coverage for the damage claim because that's what covers the structure.

The only way the association's insurance would be invoked for coverage would be if there is proof that the tree that fell was dangerous, dead or otherwise provided some proof or evidence that the tree was likely to fall. However, if the tree fell during a wind storm as an "Act of God", then it's not likely that the association's insurance would provide coverage.

In fact, the association would likely not even provide coverage for something like this.
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Customer: replied 4 years ago.
The shareholder had notified a board member previous to the storm concern the tree could be a problem, but nothing was done. If we own only a share in the corporation aren't trees, land problems etc. common areas which is the corporations responsibility?
Yes, the association would be responsible for the damage caused by a tree in the common area a IF it can be proven that the association knew the tree was a danger because it was dead, leaning or had some other characteristic that made it a threat.

In other words, you'd have to prove that the tree falling was expected (as wold be the case with a dead tree) instead just an "Act of God" which no one could predict.

If it can be shown that the association was put on notice of the danger, then the homeowner could have a claim against the association and it's insurance for the damage.
Customer: replied 4 years ago.
Thank you for the information, however, I am having difficulty with if it is an "act of God "it would be the homeowners insurance which would have to take care of damage . With only a share the homeowner does not own more than the house on the common area. The land of the site, the trees etc are owned by the corporation.
I understand the confusion with this - I know it's a little confusing.

Don't get hung up on who owns the land because that's really not the main issue UNLESS the tree was dead or damaged. The main issue is whose property was damaged. There would be no liability on the landowner unless the tree was dangerous.

For example, in a situation where the homeowners own the house and land, and one neighbor's tree strikes the house next door. The owner of the tree is not liable to his/her neighbor because the tree fell IF it was an "Act of God". Instead, the homeowner with the damages house would have to make repairs/file a claim with his insurance co.

The law doesn't hold a property owner responsible for things they can't control / Acts of God.

Hope this helps.
Customer: replied 4 years ago.
Let me start with the formation of this corporation. All persons who wanted to be a part of the corporation bought one share. At this time we were informed the share consisted of one vote and the home we placed on a lot, everything( common area) which would include land, grass, trees etc." belonged to the corporation. So why would the homeowners insurance need to pay for damage done by a corporation tree?
Sorry I may be a bit difficult but I am one of those who needs to know all details.
It's no problem - ask all the questions you like.

The corporation is not liable for its tree that fell because of a wind storm - - this is an Act of God that no one can predict, and insurance nor the law will require the owner of the land where the tree is located to pay for the damage it causes.

In CONTRAST, if the corporation had an employee to cut down the tree, and the tree fell on the person's home, then the corporation would absolutely be liable because it CAUSED the tree to fall and was negligent in its act of cutting down the tree.

However, in a case like this, where a healthy tree falls due to the weather, the owner of the tree isn't going to be held responsible UNLESS (as I said earlier) there's proof that the tree was dead or had some other characteristic that made it dangerous.
Customer: replied 4 years ago.
So what you are saying is even though the tree belongs to the corporation if it falls on a shareholders home causing damage, the shareholders homeowners insurance is required to pay for the damage not the corporation insurance?
Yes - IF the corporation didn't cause the tree to fall or IF the tree was not dead, etc.

The only way the corporation should be liable is if it actually caused the damage - - it won't be liable just because the tree that fell was on its property.
Customer: replied 4 years ago.
Okay, so the homeowner must use their homeowners insurance to take care of the damage? The corporation insurance would not be used?
Yes, that would be the case IF the tree falling was an Act of God.
Customer: replied 4 years ago.
I guess I have a difficulty with the corporation owning the tree yet the homeowner has to use their insurance for any damage. Yet, if a homeowner wants to remove a tree they cannot do as such without board approval because it is owned by the corporation.
If the homeowner had asked the corporation to remove the tree due to it being a hazard/danger, etc., then that could give the homeowner some traction to seek coverage from the corporation. But, it is very unlikely that the corporation's insurance company would agree to cover the damage voluntarily due to the status of the law as we've discussed above.

So, it would take the homeowner filing suit and claiming that the corp was put on notice of the danger and that the corp neglected to address/remedy the issue.
Hi - thanks for allowing me to assist you. I'll be glad to answer any additional questions you have regarding this or any other issue. If the need arises, please let me know.
Customer: replied 4 years ago.
Even though I do not agree the shareholder insurance is to be used if "act of God" incident occurs because the tree is owner by the corporation, I do believe I "got"it ----- If corporation was notified in writing of a possible problem, the corporation insurance pays for any damage to home----If " act of God", shareholders insurance pays for damages. Is this correct?

Good morning!

Yes, that's correct.

IF the corp was put on notice of a dangerous condition and it didn't take steps to remedy the danger, then the shareholder would have a claim against the corp and its insurance.

But, if the tree was not a forseeable danger (not dead, etc.), and an Act of God blew it down, then the shareholder's insurance should provide coverage.

I know its a difficult concept and possibly even an unfair rule, but that's the way the law is in this type of situation. I do appreciate you not shooting the messenger!

Please let me know if you have any other questions.

Customer: replied 4 years ago.
Thank you for your expertise.
No problem - glad to help!

Please let me know if you need anything further.
Customer: replied 4 years ago.
Another question. This association was given an occupancy by an attorney. What is the difference between an occupancy agreement and CC&R's or Rules & Regs? I have lived in six associations and this is the only one with an occupancy agreement and not either of the other two mentioned. In researching occupancy agreements it appeared to me these are used for rentals. Is that correct?
An "occupancy agreement" is an agreement allowing a buyer to occupy a property prior to escrow closing. Thus, it's not a rental agreement.

Thus, this would not be the same as bylaws or CC&R's. instead, it's an agreement for a buyer who wants to occupy a property before closing.
Customer: replied 4 years ago.
Confused! The OC agreement is valid until escrow closing and after the closing it is no longer effective? To be a part of this corporation one paid an amount to buy a share with no escrow or closing. So does an occupancy agreement apply to this situation?
I suppose there could be multiple uses for an "occupancy agreement", but the general use is to be an agreement until escrow closes. You'd have to look at the agreement itself to see what the terms are.

It may be since there is no purchase of real property, the occupancy agreement provides that the money being paid is just for a share - - and not for an ownership in property.

You'd just have to look at the terms of the agreement.
Thanks for allowing me to assist you. If you have any additional questions, please let me know. Thanks!
Customer: replied 4 years ago.
I probably will. Am waiting for a response to your last bit of information . We are on the committee to revise the ByLaws and Occupancy Agreement so need her imput.
Ok. Sounds good.
Customer: replied 4 years ago.
Due to family coming to celebrate the 4th and medical emergency today, it has not be convenient to confer on your previous advise. I will get back to you if we have more questions. Thanks.
No problem - - just let me know if you have any other questions.
Customer: replied 4 years ago.
Customer: replied 4 years ago.
After years of never enforcing the rule of proper procedure for adding deck, plants, etc to shareholders dwelling the present board has become spiteful and appear to have a vendetta with one of the shareholders. At the time he proceeded to solve a problem of water flowing under his home causing mold others including a board member did alterations to his property without proper procedure. The majority of the shareholders attempted to express to let the problem go because nearly every shareholder has not followed procedure. The suggestion was to set a date for proper procedure to be implemented and enforced. The board refused to listen to the shareholders concerns and possible conclusions and would not allow a discussion to take place. Our ByLaws read---Duties of Directors-in addition to those duties normally performed by directors, the board shall have the power to determine the policies of the corporation. Does this mean we shareholders have no power at all if we do not agree with what they are doing . Does it give them the right to not allow discussions on serious matters? What they are doing is " picking" on one shareholder who did not do anything different than most of we shareholders. To explain more about this corporation, we are seasonal residents except for a few who reside year round.

The board cannot selectively enforce rules or single out one member to pick on; this is generally considered an illegal practice. This particular shareholder could sue the corp and ask the judge to find all of the unenforced provisions to be invalid because the corp isn't requiring them to be followed by any shareholder, and the shareholder could also seek damages for the board's treatment/singling him out.

As for the shareholders as a whole, they can challenge the board if they believe the board is not acting properly or in accordance with the bylaws. USUALLY, this takes a lawsuit being filed because the board will not listen to reason in situations regarding the board's authority. So, the shareholders would likely have to sue the board/corp demand that the rules be followed and equally enforced.

Customer: replied 4 years ago.
You are most helpful. There could be more questions so if it is okay I won't sign off just yet. Thank you.
That's absolutely fine. Just let me know if you need anything else.
Customer: replied 4 years ago.
Yes, I did rate you way back. If it did not register please let me know. I tried to rate you as we went on but couldn't without paying another $38. I thank you for all your expertise.Even though the board was not interested I do have the info . This association is in one big turmoil which is nothing new because rules have never been enforced and the board is ignorant as to laws. Our silent vote to elect new board members was illegal as they required our lot numbers on the ballot and I understand the ballots were checked to who voted for whom. I give up!!!! And they wonder why I choose not to attend the very stressful meetings where one gets shot down constantly. If something else comes up, is there a way I can request you? Thank you
Hi - - yes, you've already rated/paid me, so there's no issue here.

Also, if you need something in the future, all you have to do is begin your question with "For Kirk", and it will be directed to me.

Or, you can post any new question on my profile page:

Thanks again and look forward to helping you again!
Customer: replied 4 years ago.
Is there a way I can give you more gratuity?
Hi -

You can leave me a bonus or rate one of my answers again (buy that will cost you another $38). You can leave a bonus in any amount you like.

Thanks so much!! You're too kind!
Customer: replied 4 years ago.
Okay, so how do I go about leaving more bonus?
To be totally honest, Im not 100% sure, but there should be a button on your screen that allows you to leave a bonus.

You can click the Help button below and get customer service to assist if you have trouble. Sorry I'm not a lot of help on this one!!
Customer: replied 4 years ago.
I have contacted customer service and am waiting for a reply. I cannot thank you enough for all the time you spent on my questions and as I stated even though the board has no interest , I do have the info if ever needed. I truly appreciate all the answers you have given to me. Hopefully there will be a way to give you more bonus and if not know your expertise is appreciated. Thank you.
Thanks so much! I'm glad to help and look forward to helping you in the future.

Have a good day!!

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