Homeowners’ associations (HOAs) serve as an important presence in managing and maintaining community standards and amenities. An HOA board also has its share of legal responsibilities and the potential risks it faces.
Understanding why HOAs get sued can help board members take proactive measures to mitigate these risks. Lawsuits against HOAs can arise from various issues, and being prepared is crucial for effective and responsible board management.
Breach of the association’s governing documents
One of the most frequent causes of litigation against HOAs is the alleged breach of the association’s governing documents, like the Covenants, Conditions, and Restrictions (CC&Rs), bylaws or rules and regulations. This can occur if an HOA enforces rules inconsistently, fails to enforce certain rules, or takes actions that aren’t supported by the documents. Regularly reviewing these documents and ensuring all actions comply with them is essential to avoid such disputes.
HOAs must adhere to federal and state anti-discrimination laws, including the Fair Housing Act. Understanding these laws and having specific rules in the governing documents is critical for HOAs. Lawsuits can arise if residents feel they have been discriminated against based on race, color, religion, national origin, sex, disability or familial status. Ensuring that all policies and actions of an HOA are non-discriminatory and respectful of all members’ rights is imperative.
Failure to maintain common areas
Another common reason for lawsuits is an HOA’s failure to maintain common areas or perform necessary repairs. This may lead to accidents or damage to individual properties. The board must ensure that all common areas are well-maintained and that any repair issues are addressed promptly to avoid such liabilities.
Disputes over assessments and fees
Disagreements over the imposition of assessments, dues or special fees can also lead to legal challenges. Transparency in financial dealings, clear communication about fee structures, and adherence to the governing documents when levying assessments are vital practices to avoid such disputes.
What to do if the HOA is sued
If your HOA faces a lawsuit, it’s crucial to gather all relevant documents, including the HOA’s governing documents, any relevant correspondence and records of board meetings. The board should avoid discussing the case with anyone outside its legal team to prevent miscommunication or additional legal complications. Finally, it’s essential to review the situation that led to the lawsuit and consider measures to prevent similar issues down the road.