HOA & Condo Association Litigation & Emerging Issues
Community associations sit at an unusual intersection of governance, real estate, and civil rights law — board decisions carry fiduciary exposure, assessment collection runs through its own foreclosure regime, and a single structural failure can generate mass-tort liability that reshapes how every aging tower in the country gets inspected and insured.
What's driving disputes right now
Grounded in current market and legal reporting, not speculation — each item links to its source.
Post-Surfside Structural Safety Mass Tort
The June 2021 partial collapse of Champlain Towers South in Surfside, Florida killed 98 people. Plaintiffs' engineers alleged vibratory sheet-pile driving during construction of an adjacent tower generated foundation vibrations exceeding standard thresholds — a theory independent engineers called unproven for lack of definitive data. The Miami-Dade Circuit Court oversaw a global settlement pool reported at approximately $997 million, alongside a separate $8.55 million settlement with the project's structural engineering firm.
Why it matters: The case reset industry norms for adjacent-construction vibration monitoring and long-tail liability exposure, and continues to shape reserve and insurance underwriting for aging coastal towers nationally.
Board Liability for Retroactive Lien Tactics
Du Bois v. Sherwood Commons Townhome Owners Ass'n, Inc., 2025 IL App (3d) 240122-U, held that an association breached its fiduciary duty by recording a lien in 2020 that included water/sewer charges a prior appellate ruling had already found were not lawful "assessments." The board only amended its bylaws to reclassify those charges months after the lien was recorded, and the court held that amendment could not be applied retroactively to cure the improper lien.
Why it matters: Confirms boards cannot use after-the-fact bylaw changes to justify collection actions already found unlawful — a live risk anywhere associations pursue liens for utility or ancillary charges.
Expanded Overbid Exposure in Assessment-Lien Foreclosures
In Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (Cal. Ct. App., certified for publication, Sept. 2025), the court held that the extended post-auction overbid period under Civil Code § 2924m — originally aimed at mortgage foreclosures — also applies to nonjudicial trustee's sales enforcing HOA assessment liens on 1-4 unit residential properties. The winning bidder at the original auction lost the property when another party submitted a higher bid during the statutory extended-bidding window.
Why it matters: Investors and lenders bidding at California HOA foreclosure auctions now face a longer window in which a winning bid can be topped, materially changing acquisition risk on distressed association-lien properties statewide.
DOJ Fair Housing Enforcement Against a Condo Board
In United States v. Kailua Village Condominium Association, et al. (D. Haw.), the DOJ's Civil Rights Division pursued a Fair Housing Act case after HUD referred a complaint that the association, its board members, property managers, and unit sellers refused to sell a unit to a man with paraplegia and denied him reasonable accommodations. Two consent orders — entered October 2024 and January 2025 — resolved the matter for total damages of $162,500 plus mandatory fair housing training and policy changes.
Why it matters: Illustrates active DOJ/HUD enforcement of disability-accommodation obligations at the board, management, and sales level for community associations — a compliance area many boards underestimate.
$17.5M Construction Defect Recovery — Regalia on the Ocean
The Regalia on the Ocean Condominium Association, representing a 46-story luxury oceanfront tower in Sunny Isles Beach, Florida, sued its developer, contractors, and architect over alleged defects including improperly installed pool joints, unsafe steam rooms, and faulty sliding glass doors. The case settled in 2021 for $17.5 million — a $9.6 million cash payment for repairs plus an $8.5 million credit toward replacing the defective doors, funded through the defendants' insurers.
Why it matters: A model example of how condo associations recover large-scale common-element construction-defect costs from developers years after turnover, informing reserve planning and developer-warranty negotiations on luxury towers.
Limits on Association Insurance for Unit-Interior Damage
In Buchler v. Club Regatta Condominium Association (N.J. Super. Ct. App. Div. 2015, still frequently cited), a faulty thermostat caused unit owners to run their heat continuously, cracking drywall and damaging ceilings and furnishings; the owners carried no personal unit insurance. The court affirmed summary judgment for the association and its insurer, holding that because coverage was limited — as required by statute, the master deed, and bylaws — to common elements, the association had no duty to file a claim for damage confined to areas reserved for the owner's exclusive use.
Why it matters: A go-to authority for associations defining and defending the boundary between "common element" master-policy coverage and an owner's own interior-unit responsibility, still cited in coverage disputes today.
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