Lawsuits are frequently filed against homeowners’ associations. Owners have different views, which may not always match those held by the HOA board and association or boards sometimes make mistakes.
HOA boards should seek legal representation and contact their insurance carrier if a lawsuit is filed against them. Fortunately, most lawsuits are settled without going to court.
Acting in the best interest of the HOA and following its governing documents are strong defenses against lawsuits. Boards have discretion and can often justify their actions if they were not acting arbitrarily and were trying to address unique circumstances.
Homeowners often sue their HOA if its board does not perform its fiduciary duties and responsibilities contained in its governing documents. Homeowners may also sue an HOA for failing to exercise ordinary care or not acting in a reasonable and prudent matter. For example, an owner may file this negligence claim for suffering an injury because the HOA did not remove ice from its sidewalks.
Common reasons for lawsuits include:
- Failure to upkeep, replace or repair a structure, sidewalk or other infrastructure under its responsibility.
- Denial of an owner’s architectural change request.
- Disputes over the board election process and results.
- Wrongful fine or accusation levied against a homeowner.
- To prevent HOA boards from taking actions such as making expenditures or adding services requiring additional fees.
- Pet disputes.
Individual board member suits
Board members are usually immune from liability for actions taken in good faith and in the best interests of the HOA, even if it was an error. But they may be sued for misconduct, such as theft from the association.
These lawsuits happen frequently but are rarely successful. Board members should have directors’ and officers’ liability insurance coverage to cover any liability in a lawsuit.
HOA boards should call their insurance carrier and attorney if they are sued. Attorneys can help assure that deadlines are met and protect their interests.