HOA living offers a myriad of great benefits to residents and prospective residents. However, residents also invest a significant amount of money into their HOA in order to take advantage of those benefits, and residents are also made to abide by the HOA’s CC&Rs or face consequences such as legal action. So naturally, it goes the other way as well. When a resident is not happy with the way things are being handled by their HOA board, they may quickly escalate their disagreement into a lawsuit.
Here are five reasons your HOA might get sued.
Your HOA likely has a number of established rules that help to keep the community a safe, attractive and desirable place to live. However, if any rule, decision, or governing document is found to be discriminatory against certain protected characteristics like race, religion, sex, national origin, familial status or disability, there may just cause for a lawsuit against the HOA.
2. Contract violations.
Just as the residents have signed a contract to live in the community, the CC&Rs serve as a contract for the HOA board to abide by. If the HOA failed to fulfill one of their contracted duties, such as not maintaining the landscape, residents would be well within their rights to file a claim.
3. Misappropriation of funds.
The HOA dues paid by residents are to be used for very specific purposes. If it appears that funds are being used improperly or board members aren’t being transparent enough about where funds are going, residents may feel it necessary to sue the HOA.
4. Board decisions.
Residents put a lot of faith into their board members, and when they feel like they aren’t being treated fairly in return, they can dispute certain board decisions. For example, if a resident’s request to add a bedroom to their home was turned down by the HOA board, but there is nothing in the CC&Rs that says adding a bedroom is against the rules, that resident may sue the board in order to move forward with their addition.
An HOA has the duty to represent the best interests of all tenants or homeowners in the association. If repairs are needed, but the HOA is slow to make them, homeowners can sue the association board for neglecting their duties.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, we are dedicated to protecting HOA’s like yours. We have a unique understanding of the industry and the common risk exposures that you face in your daily operations. In fact, we find that 90% of the policies we review are missing coverages that violate the Covenants, Conditions and Restrictions (CC&R), exposing the board, HOA and management to lawsuits– which is why our comprehensive policies are tailored to meet your specific needs at competitive prices. For more information about our products, contact our experts today at (818) 879-5980 ext. 201, or fill out our online form.