Lawsuit Against HOA for Compromising Water System

We live in a 52 lot rural sub-division with 1/2 acre lots. There are 9 community wells - each serving 4-6 lots with undivided ownership interests in the well that serves their respective properties (the HOA has NO ownership interest at all in the wells). The subdivision has an HOA which has no common areas. The only thing the CC&Rs allowed dues to be collected for were common areas (which there are none); private streets (which there are none); signage (which there is none); landscaping (which there is none); and lighting (which there is none). Having nothing to manage the HOA decided to arbitrarily take over managing the community wells in violation of the recorded Water User's Declarations and collected $400 annually to rebuild the wells - without authority to do so under the Water User's Declarations and on top of that used an unlicensed contractor. The state and county code requires that no building occur within 100' of these wells and the CC&Rs require that the homeowner be in compliance with state and county code. We have just learned that 8 of the 9 wells have been encroached (while being managed by the HOA) some with buildings within 13'. There are garages, presumably with chemicals inside. The State has said the wells were not conducive to be encroached and unfortunately the county issued building permits in violation of its own county code. However, as the "de facto" owner/manager of the wells, the HOA has some liability so we were forced to sue the HOA in order to force the HOA to connect to the local water PUD. Does anyone have any experience with this sort of thing where an HOA has been sued for environmental reasons? There are two insurance policies and the insurance company is defending the lawsuit but we are wondering about buying and selling with a lawsuit pending. The lawsuit does not qualify as "lis pendens" so it is not likely to show up on the title reports. Should the individual homeowners who violated the law and caused the water system to be compromised be sued or should the HOA turn around and sue the individual homeowners who violated the CC&Rs which requires the county and state code be upheld or is the insurance company likely to subrogate a claim and sue the individual homeowners? All of the wells are serviced by the same aquifer so that means the system is susceptible to contamination. If there is no lis pendens how does the mortgage company feel about lending on such properties where the water system has been compromised?

Where were the lot-owners when this happened and how long ago? If the owners knew of these violations and stood there with their hands in their pockets then they have no one to blame but themselves.


Who is the "we" who sued? Does this mean that the development now gets its water from a public utility instead of the wells?


No experience with environmental lawsuits. Even though it may not show up on a title report you may have a requirement to disclose the lawsuit to potential buyers, depending on state laws.


Your question does not clearly identify who the plaintiff would be in the first part of the question. This situation has a lot of room for finger-pointing, especially if the county issued building permits in violation of state law and the HOA took no action to enforce the CC&R's until it got busted for its own negligence.