n 2018, the owners' tenants discovered persistent water pooling in the crawlspace beneath the unit - part of the building’s common area under the HOA’s control.
When an HOA ignores its duties under its covenants and restrictions, the consequences can be devastating. In Ridley v. Rancho Palma Grande Homeowners Association (Cal. Ct. App., Aug. 28, 2025, No. H052560), a Santa Clara couple secured a $1.8 million judgment after their condominium was rendered uninhabitable due to water intrusion, mold, and a sinkhole caused by an abandoned well beneath the property. The Court of Appeal upheld the judgment, finding that the HOA’s delay, deception, and failure to act breached its duties under the CC&Rs.
What Went Wrong at Rancho Palma Grande HOA
Retirees Doug Ridley and Sherry Shen owned a condominium in Santa Clara County. In 2018, their tenants discovered persistent water pooling in the crawlspace beneath the unit - part of the building’s common area under the HOA’s control. The issue worsened over time, culminating in severe water damage, mold growth, and ultimately, a sinkhole beneath the living room floor.