Minnesota Court of Appeals: An HOA’s failure to quickly stop a leak is both negligent and a trespass

by Alex Nelson

Minnesota Court of Appeals:  An HOA's failure to quickly stop a leak is both negligent and a trespass, and can make it liable to a unit owner whose property is damaged

Chiu v. Timbershore Home Owners' Association, 2015 WL 4523925 (Minn. App. June 29, 2015) (Not reported in N.W.2d).  

In this recently decided case, a townhome owner had filed suit against his HOA for water damage caused by a pipe leak.  The townhome association owned an easement under Mr. Chiu's home, in his crawlspace, for a domestic water pipe that served other units. The pipe ruptured, flooding the crawlspace and causing damage to Chiu's home.  Chiu immediately reported the leak to his homeowners association, and was told that there was "nothing they could do".  The water continued to flow and cause damage. The water was not turned off until two days after Chiu's notification to the HOA. Chiu sued the HOA not in breach of contract (as would be typical, pursuant to the Declaration), but rather in negligence and trespass. The Minnesota Court of Appeals allowed both legal theories to stand. 

The Court concluded that the association's Declaration was silent as to the standard of care required of the easement holder HOA. Therefore, under the common law, a tort duty was owed to Chiu.  The court held that "caselaw recognizes that an easement holder has a common-law duty to maintain and repair the easement and not to misuse the easement. Here, the easement granted in the declaration triggers that common-law duty, and it provides a basis for Chiu's negligence claims.  The district court therefore erred by concluding that Chiu's negligence claims fail for lack of a duty."   

The Appellate Court also permitted the trespass claim to survive summary judgment, relying on application of the Restatement (Second) of Torts sections 158 & 161:  "[A]lthough intent may be required to establish trespass, the requisite intentional act may be the failure to remove a thing from another person's land where there is a duty to remove, instead of an intentional entry of the land. Trespass may also be based on the continued presence of a thing that was negligently placed on another person's land."  The HOA's failure to turn off the flow of water to the leaking pipe was considered by the Court to be an "intentional" act so as to fit the Restatement's tests for trespass.  

Homeowners associations should beware that their failures to properly and timely maintain their easements and common elements can open them up to liability when units owners' homes and personal property are damaged. Although property insurance, liability insurance, and/or errors and omissions insurance may cover claims such as those brought by Mr. Chiu, the most prudent associations will simply act diligently and promptly to avoid damaging the units owners' property in the first place.