The HOA Had a Structural Report. The Owners Say They Never Saw It.

In 2021, the city ordered a 150-unit condo complex in Diamond Bar vacated. A few weeks later, it rescinded the order. At an HOA meeting that fall, an owner asked why a 2017 structural engineering report had never been sent to owners. A California appeals decision from April looks at what happened next.

What the court looked at

In an unpublished opinion filed April 21, 2026 (Alarcon v. The Avalon Management Group, B340678), California's Second District Court of Appeal, Division Three, looked at a lawsuit by the owners of 63 units in the Diamond Bar Village complex. According to the opinion, a June 2017 report prepared for the HOA described decades of accumulated water damage, termite infestation, dry rot and roof wear, and a 2021 updated report said the buildings posed a high risk to safety. The city issued an order to vacate based in part on those reports, then rescinded it several weeks later after concluding there was no immediate danger.

The owners sued several parties, including the engineer, the city, the HOA and the HOA's management company, which had managed the complex since 2020. Against the management company, they alleged it failed to disclose the 2017 report to owners, sellers and buyers and failed to perform repairs. The owners later dismissed their claims against the HOA and its directors.

The trial court granted summary judgment for the management company, and the appeals court affirmed. It held the HOA's managing agent didn't owe the individual owners a duty of care, and that policy considerations weighed against creating one, in part because owners could seek a full remedy from the HOA itself. The court didn't decide whether anyone should have done anything differently with the report.

One more note: this opinion is unpublished. Under California Rules of Court, rule 8.1115, it can't be cited as precedent, so we're sharing it as a real-world example, not as a binding rule.

Why this one is worth a second look

For condo buyers, the HOA's documents are where building-wide issues usually show up. In this case, a structural report existed for years, and owners say they didn't see it until a city order forced the question.

The legal answer about the management company's duty doesn't change the practical one: if a report exists, a buyer generally wants to know about it before they buy.

A quick check before your client removes contingencies

Before contingencies come off on a condo or townhome, ask: did the HOA package include reserve studies, recent engineering or inspection reports, and board minutes? Do the minutes mention a report, a special assessment or deferred maintenance that isn't in the package? If something is referenced but missing, has it been requested in writing?

These aren't legal or engineering questions. They're plain-English questions a careful second read can raise. We flag inconsistencies and red flags early, so questions can go to the right professional.

What's at stake

Here, owners of 63 units went through a city order to vacate, a multi-party lawsuit and an appeal. Asking for the HOA's reports and minutes up front is a much smaller step.

How House Owl helps

We understand how overwhelming the paperwork is. You're the one guiding your client through it. House Owl is a second set of eyes on your disclosures and transaction documents, so questions get caught and referred to the right professional before close.

A simple plan for your next escrow

1. Book a free 30-minute Learn More call. (https://calendly.com/jason-myhouseowl/learn-more-1)

2. We review your disclosures and transaction documents for inconsistencies and red flags.

3. We walk your client through what we found on a recorded video call, and you're invited to join, so they can close with more confidence.

Why House Owl

An independent second read of your disclosures and transaction documents, with the walkthrough saved as a video recording. We can send a quick recap after the review, and if something needs your attention, we reach out to you directly.

Jason Piske has worked in California real estate since 2016 and offers disclosure-risk training to brokerages. You can see how it works on our Services page (/services-new) and get quick answers in our FAQ (/faq). Payment terms are in our Terms (https://www.myhouseowl.com/terms-and-conditions).

Close with more confidence

Clients who understand their documents before they sign. That's the outcome worth working toward on every file.

A second set of eyes on your disclosures.

For more information, book a free 30-minute Learn More call. (https://calendly.com/jason-myhouseowl/learn-more-1)

Sources

Alarcon v. The Avalon Management Group, Inc., B340678, Cal. Ct. App., 2d Dist., Div. 3 (unpublished, Apr. 21, 2026), opinion text via gno.law: https://gno.law/c/10846390/alarcon-v-the-avalon-management-group-ca23 ; also Counsel Stack: https://law.counselstack.com/opinion/alarcon-v-the-avalon-management-group-ca23-calctapp-2026

General information, not legal advice. House Owl is an independent document review service, not a law firm, real estate brokerage or home inspector. Owner Jason Piske is a California real estate licensee (DRE 02004501), but in a House Owl review he doesn't act as anyone's agent or represent any party. Laws differ by state; talk to a qualified attorney in your state about a specific situation.