Does an insurer owe an HOA a defense to a lawsuit seeking enforcement of CC&Rs when initial complaints to an HOA of violations occurred before the insurer’s policy was issued but before a demand with a deadline for specific enforcement?

Facts: A homeowners’ association (HOA) receives multiple noise complaints about a homeowner’s improperly installed flooring which violates the HOA’s covenants, conditions and restrictions (CC&Rs). These complaints do not request specific relief or give a deadline for the HOA to respond. The HOA is issued a new liability insurance policy and later receives a demand from an HOA member to enforce their CC&Rs in regard to the improperly installed flooring. The member then files a lawsuit against the HOA for failure to enforce the CC&Rs. The HOA makes a claim on their insurer to cover the costs of the lawsuit, which the insurer denies.

Claim: The insurance company claims the demand which triggers coverage was made before the policy began since the complaints by the neighbor to the HOA predate the policy.

Counterclaim: The HOA claims the demand which triggers coverage was made during the policy since the earlier complaints are not demands as they include no request or a deadline for specific relief.

Holding: A California court holds the insurance policy covers the demand made during the policy since the earlier complaints from an HOA member were not a demand for specific relief with a deadline to respond. [Del Mar Woods v. Philadelphia Indemnity Insurance Company (2025) 791 CA3rd 1170]

Del Mar Woods v. Philadelphia Indemnity Insurance Company

 

Related RCDs

Is an owner of commercial property entitled to insurance coverage for loss of the functional use of their property caused by a pandemic-related government closure order when the insurance policy excludes coverage for loss caused by a virus?

 

Related Reading

Legal Aspects of Real Estate, Chapter 16: Covenants, conditions and restrictions