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Fire Clean-Up + Rebuilding Following Palisades and Eaton Fires
Shelby D. Bennett, Esq.
In the wake of the recent fires many associations were left asking themselves the same question “what is the path forward from here?” The recent Palisades and Eaton Fires, among other smaller wildfires in the region, brought unprecedented damage with approximately 6,300 homes being destroyed or damaged by the fires. This left some communities completely devastated by the fires.
Damage and Destruction Provisions
Now, association board members are facing a unique challenge, how to clean up the damage and rebuild. Most association’s covenants, conditions, and restrictions (“CC&Rs”) include provisions that address damage and destruction. These provisions typically only kick in once a substantial portion of the community has suffered damage due to a natural disaster. Accordingly, most boards have never needed to familiarize themselves with these provisions and the processes set forth therein.
As an example, some CC&Rs will set a threshold for performing common area repairs, where the association receives insurance proceeds to cover a majority of the repairs then the repairs must be made. However, if the insurance proceeds cover less than a majority of the repairs then a majority, or more, of the owners can vote within 90 days (or the timeline set forth in the CC&Rs) to forego the repairs to the common area. Additionally, the CC&Rs may define what must be done with the common area, i.e., converted to a park, if the repairs are not performed.
In addition to the common area repairs, CC&Rs will also require that owners rebuild their separate interest. Often these provisions will require that owners submit an architectural application for their proposed rebuilding or repair and get approval prior to commencing work. The CC&Rs may also include a timeframe for completing the repairs.
With the above in mind, it is crucial that boards review the governing documents and determine whether any of the provisions govern their rebuilding. In addition to the time limitations set forth above, the association’s CC&Rs may provide a timeframe for rebuilding the common area or set additional requirements. Accordingly, associations that suffered damage should review their documents thoroughly and seek the advice of legal counsel, if necessary, prior to beginning any repairs.
Civil Code Requirements
In connection with the above, recent changes to the Civil Code may also impact the association’s rebuilding efforts. Specifically, Civil Code Section 4775 was recently amended to clarify that the association is “responsible for repairs and replacements necessary to restore interrupted gas, heat, water, or electrical services that begin in the common area even if the matter extends into a separate interest or the exclusive use common area appurtenant to a separate interest.” This Code Section further requires that the association begin repairs within 14 days of the interruption and, if necessary, levy an emergency special assessment to cover the costs of repairs.
Accordingly, if not already done, boards should prioritize restoring the association’s infrastructure within the timeframe set forth in the Civil Code.
Additional Considerations
There are additional considerations that boards should take into account as well, for example temporarily modifying the rules regarding rentals and leasing to provide additional housing for people that have been displaced. Additionally, the state legislature recently proposed AB 462 which, if enacted, would not require a coastal development permit from the California Coastal Commission for accessory dwelling units (“ADUs”) build within the coastal zone during a state of emergency. This would help owners potentially return to their property more quickly as ADUs may be more accessible and easier for owners to build while they take the steps to repair or rebuild their home.
During this time, it is important for boards, and members, to understand the full picture and work together to rebuild the community. Where necessary, boards should rely on the proper experts, including contractors and legal counsel, to guide them through this process.
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