Use of Construction Defect Funds

This concerns a HOA in CA. May funds received from a construction defect settlement be utilized to make other repair not specifically listed in the CD suit? I've reviewed the CA Davis-Sterling info and couldn't find any CA civil code that specifically spells this out.

Thanks

Short answer yes they can use the money for other repairs but they must notify all of the members which construction defects that they got reimbursed for that the BOD is not going to repair. Regardless of what they use the money for the BOD has a duty to maintain the property and repair any safety deficits, unless otherwise provided for in the CC&Rs.

Civil Code §1375.1. Settlement Disclosure to Members.

(a) As soon as is reasonably practicable after the association and the builder have entered into a settlement agreement or the matter has otherwise been resolved regarding alleged defects in the common areas, alleged defects in the separate interests that the association is obligated to maintain or repair, or alleged defects in the separate interests that arise out of, or are integrally related to, defects in the common areas or separate interests that the association is obligated to maintain or repair, where the defects giving rise to the dispute have not been corrected, the association shall, in writing, inform only the members of the association whose names appear on the records of the association that the matter has been resolved, by settlement agreement or other means, and disclose all of the following:

(1) A general description of the defects that the association reasonably believes, as of the date of the disclosure, will be corrected or replaced.

(2) A good faith estimate, as of the date of the disclosure, of when the association believes that the defects identified in paragraph (1) will be corrected or replaced. The association may state that the estimate may be modified.

(3) The status of the claims for defects in the design or construction of the common interest development that were not identified in paragraph (1) whether expressed in a preliminary list of defects sent to each member of the association or otherwise claimed and disclosed to the members of the association.

(b) Nothing in this section shall preclude an association from amending the disclosures required pursuant to subdivision (a), and any amendments shall supersede any prior conflicting information disclosed to the members of the association and shall retain any privilege attached to the original disclosures.

(c) Disclosure of the information required pursuant to subdivision (a) or authorized by subdivision (b) shall not waive any privilege attached to the information.

(d) For the purposes of the disclosures required pursuant to this section, the term "defects" shall be defined to include any damage resulting from defects.

Read more: Davis-Stirling Act - Civil Code §1375.1. Settlement Disclosure to Members
from Davis-Stirling.com