Berding | Weil Community Association ALERT Newsletter
Legal News and Comments for Community Association Boards and Managers Issue #69 • May 2011
No reserves. No Insurance. What's Left if a Natural Disaster Destroys a Community Association?
by Tyler P. Berding, Esq. and Steven S. Weil, Esq.
We have recently seen horrific earthquake disasters in New Zealand and Japan. There has been widespread loss of life and destruction of infrastructure and buildings. California has a history of devastating earthquakes as well—the San Francisco, San Fernando, Northridge, and Loma Prieta earthquakes, among others. Heavy rains have created landslides, mudslides and shoreline erosion all over California, damaging homes and property, some of it in community associations. Wildfires in the past decade have destroyed hundreds of homes. Rising sea levels are threatening to flood low-lying developments, including many common interest developments.
What does a community association board of directors do if a natural disaster wipes out all or a portion of their association? Is this a problem to worry about? When and where is it likely to happen? Is there a plan for dealing with it?
Worry about it. A disaster can strike at any time, and most community associations and special districts are ill prepared for the consequences. Disaster insurance is usually inadequate or even non-existent and there is little reserve funding that can be tapped to rebuild. Here are a few examples of how existing and future developments could be paralyzed by a natural disaster.
The Threats
Bethel Island lies in the Sacramento Delta between Sacramento and Stockton, California. Its home to about 2500 residents. The interior is 7-15 feet below sea level. There are 11.5 miles of levees that serve as a dam to keep the waters of the surrounding sloughs from inundating the island.
Property taxes collected from the residents of the island fund a special district, the Bethel Island Municipal Improvement District (BIMID) which is responsible for the maintenance and repair of the levees and functions like a municipality or a large community association.
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