The Prevalence of Common Property

Common properties are typically maintained by the association, through assessments paid by members. What happens if an injury occurs on this common property? Who is liable for damages?

Liability for Accidents on Common Property

A person injured on the common property has a variety of defendants to consider suing. Typically, an injured party will look to sue who ever has insurance for the accident. Insured defendants can turn the lawsuit or claim over to the insurance carrier, but among those who could be sued, who will be left with the responsibility to pay for the damages?

For communities subject to all of the provisions of CCIOA, individual owners in the community do not have liability. In those communities, Owners have no direct liability for claims from injuries on common property. The statute imposes responsibility for such claims solely upon the owner’s association.

In communities subject to all of CCIOA, the association will pass through the costs of liability insurance to the owners in assessments. If there is excess liability (liability that exceeds the association policy limits) or liability that was not covered by a policy, that could be passed on to owners via increased assessments.

What About Communities Not Subject to All of CCIOA?

In these communities, CCIOA does not aid that community or the association and the courts may allocate responsibility among several responsible parties. For pre-CCIOA condominium communities, the Colorado Condominium Act provides an allocation based on ownership interests in the common elements.

For communities not protected by either CCIOA or the Condominium Act there is no state statute and little appellate case law on this issue. This leaves the allocation of liability unclear. 

Should Individual Owners Still Obtain Their Own General Liability Insurance?

Yes. Even when the association itself is solely liable, owners within the association are not off the hook. Especially in communities not subject to all of CCIOA, and so, where owners are not protected, individual owner insurance is important. Injured persons may sue any number of defendants, regardless of ultimate liability. Frequently, the major cost of a lawsuit (and benefit of an insurance policy) is the defense costs, rather than the ultimate claim payment. Individual owners within common interest communities should maintain their own adequate insurance, especially for the injuries which may occur on a common property adjacent to the individual owner’s parcel or on an easement area on the owners land (i.e. some private roads and bridle paths and other areas). 

How Can a Community Avoid Liability for Injuries on Common Property?

Here are several steps associations can take to limit the exposure of the association and its members for injuries on common property:

•  Establish and follow appropriate risk management procedures including regular maintenance and inspection for dangerous conditions, lighting, locks, fences, etc.

•  Be certain you have adequate insurance (general liability and D & O) to cover claims for failure to protect.

•  Consult with your insurance carrier and attorney on the liability of the association and the risk or exposure of the owners.