Five Common Reasons for Potential HOA Lawsuits
As a member of your HOA Board of Directors, you have a responsibility to protect your association from lawsuits. The best course of action is being aware of the common reasons for litigation so that you can put the right processes in place to protect the community. Below are five common reasons that HOA owners initiate lawsuits.
ARB Standards – If your HOA has a few architectural review board (ARB) guidelines in place instead of clear standards that are easy to understand, you’re leaving the association open to a lawsuit. When owners request a variance to add a bedroom, a deck or an outside storage unit, you need to be able to point to clear standards as to why or why not the owner can proceed. Do your ARB standards withstand the test?
Misuse of Funds – Homeowners choose to live in a managed community because they don’t have to take care of repairs themselves. They choose to pay monthly assessments in lieu of handling the everyday maintenance problems themselves. If owners spot evidence that the money they are paying is being mismanaged, legal action is likely to follow.
Election Violations – Disputes about mishandling or election results can turn ugly, often escalating into litigation. You can avoid putting your association at risk by documenting clear procedures throughout the election process.
Discrimination – When your HOA Board fails to enforce rules consistently, you put your association at risk for a lawsuit. Your association is free to establish rules to create the community that you prefer. Make sure that your rules don’t violate the housing discrimination laws and are enforced consistently for all owners.
Maintenance – Owners pay HOA assessments to ensure that short-term and long-term maintenance is managed for them. They expect to have access to all the amenities that are listed in their contract. If amenities are left is disrepair or not properly maintained, homeowners may bring suit against the HOA.
It’s the Board’s responsibility to represent the best interests of all the homeowners in the community. Protect your community by making sure that you have processes in place that help you manage your association consistently and effectively—and put measures in places to help protect against legal action.
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