Condos Burned, Insurance Money Available, but Residents in Limbo

There is insurance money to rebuild this condominium building on Sunset .

The lobby entrance to the condo building.

The Condominium Building at 15515 Sunset Boulevard and 1029 Via de la Paz, behind the Shell Station, burned during the Palisades Fire. Of the 107 units, 67 were fully destroyed, 40 survived, but had severe smoke damage and four of those also suffered water damage from the subterranean garage sprinkler system.

The Covenants, Conditions and Restrictions (CC&Rs) for the Via de la Paz condos are clear on page 16 that as soon “as practical after the damage or destruction of all or any portion of the project, the Board of Directors shall obtain bids from at least two reputable contractors. . . for the purpose of effecting repair, reconstruction and restoration. . .” Residents received about $41 million in insurance money to use for a rebuild.

The problem? The CC& R’s terminated after 50 years on January 1, 2024. That means there’s no legally recognized board that can make that decision, and 100 percent written consent of all the owners is needed to reimpose expired covenants. In addition to that, the condominium must also obtain 100 percent written consent from all mortgage lenders.

Of the 107 units, according to residents David Greifinger and Chad Comey, a secret ballot was sent to families, 101 voted to reinstate, four did not vote and two were opposed.

According to California Civil Code 4265 if CCR’s expire there is no procedure for reviving them. The Code only provides procedures for extending them prior to termination, but not after the fact. Had they been extended before they expired, it would have taken about 75 percent of the owners to approve it.

How did the expiration happen without anyone noticing? Anyone who sits on an HOA board is generally a volunteer and takes care of hiring maintenance personnel, building repairs and taking care of common areas. According to the Via de la Paz HOA CC&R’s, they had the right to repeal or amend the by-laws, and it would only take 51 percent of the residents to approve them.

The expired CC&Rs weren’t noticed when the insurance on the building was discontinued by Farmer’s in June 2024. All units were asked to pay a special assessment, about $2,000 in mid-2024. The building received the Fair Plan insurance in November 2024, acquiring about $41 million in insurance.

It was only after the devastation of the Palisades Fire that the discovery of the lack of CCR’s became a major problem.

Resident Robert May in a November 26, 2026, email to Attorney David Swedelson, who specializes in community associations  and who represented some property owners said “I do not support a rebuild of the Project as it does not make economic sense, the Association lacks sufficient funds to finance a rebuild and I have no interest in further contributing funds to this Project. My intent is to sell my interest in the Project and move on. Until that happens, I intend to exercise all rights available to me to challenge any efforts to move forward with a rebuild, and if the December 10, 2025, ruling does not adequately protect my interests, I intend to move forward with all legal avenues available to me, including an appeal of the ruling on the Petition, if necessary. There are 8-10 other owners, and likely others, that share my position.”

In a legal brief filed with the Superior Court of California, L.A. County in Santa Monica, May wrote “The 1974 CC&Rs expired because of Petitioner’s gross negligence and its failure to fulfill its fiduciary duties, notwithstanding documented reminders over a six-year period.”

In that case, Judge Mark Young ruled January 23  that he denied a court order to approve the reinstatement and amendment of the associations expired CC&Rs (Civ. Code 4275 and Corp Code 7515) or, in the alternative to reduce the number of votes and percentage for approval of amendment.

In the back drop of the condo pool is Atria, a senior residence, which survived the fire.

Condominimus first emerged in California in the 1960s and were regulated under the 1963 California Condominium Act. In January 1986 the Davis-Sterling Act (Common Interest Development Act) went into effect to help address issues not addressed in the 1963 act. The Davis-Sterling Act was rewritten in 2014, but did not address expiration of CC&Rs, which governs California condominiums, cooperatives and planned development communities. It is estimated that in California between 7 to 9 percent of housing is condos.

Some like Comey have lived in that Palisades building since they were born in 1993. His grandparents had invested in the unit in 1974. He is the caretaker for his disabled mother and blind father and wants the rebuild to go forward.

In addition to the building insurance money, he was able to secure a $150,000, zero-interest, 30-year loan from Habitat for Humanity, as well as an additional $300,000 from the SBA. Both programs require funds to be drawn down and construction to begin within strict post-disaster timelines, often within two years.

The insurance money is there, additional funds have been approved for a rebuild, but instead Comey said, “we’re in legal limbo, with no path forward.”

He warns, “this loophole doesn’t just affect my community, it threatens hundreds of aging condominium projects statewide, particularly in disaster-prone areas.”

Comey said it seems the only solution is a narrow legislative fix to the Davis-Stirling Act.

With attorney David Greifinger, also a resident, they have reached out to Senator Ben Allen, L.A. County Supervisor Lindsey Horvath, LA. Councilmember Traci Park and Governor Gavin Newsom and asked that Civil Code sections 4265, 4270, and 4275 be amended to enable members of Common Interest Developments to revive expired CC&Rs by a majority (or a reasonable supermajority) vote.