Threats of lawsuits and settlement costs can be deterrents, but HOA Boards have to know when they overstep their bounds and begin practicing law. Legal counsel is important, so don’t let threats discourage you. Unfortunately, there is no one-size-fits-all solution. Rules vary from state to state and from situation to situation. So, part of each Board member’s responsibility is knowing when you need to reach out to an attorney.
Many people wait until there’s a serious issue to consult an attorney, and that thinking costs Homeowner Associations a lot of money. If there’s any question or something the Board is uncomfortable with, it pays to run it by legal counsel. Reviewing existing documents and questions/answers is a great way to start.
How long has it been since your HOA Board has reviewed the original association documents? Today’s economic climate has changed, so it pays to look at and amend old or outdated rules. Here are some of the rules and projects to review with the association attorney.
- Draft, record and amend documents that impact the title to a parcel of land.
- Review proposed resolutions before they are implemented.
- Evaluate collection policies to ensure that state and federal laws are met.
- Seek judgments and garnishments for unpaid assessments in local courts.
- Review insurance policies and claims before they are filed.
- Review vendor contracts before they are signed.
- Purchase or sale of association owned real estate.
You may want to ask your association attorney to prepare a maintenance and repair guide that answers routine questions such as who has responsibility for each area. This document, when shared with owners, can answer many of the questions that the HOA Board receives. This helps you ensure that your “canned” answers remain legal as regulations change.
Associations should commit to spending whatever is necessary to stay within the law. Part of that expense is education that is only gained with experience, so it pays to consult an attorney now instead of paying later when you find that you are outside of the law.
Unraveling the tangled web of legalities can be a huge advantage for the Board as well as association owners and residents. Knowing appropriate responses and potential legal pitfalls can help the Board build a solid legal foundation. Make sure your Board isn’t practicing law. If you reach out to an attorney as you work on projects and rules, you can prevent some of the more serious legal issues.
Wise Property Solutions serves condominium and homeowners associations by addressing their financial, association and facilities management needs. The only certified and licensed community association management firm serving the Mountain South (Virginia, North & South Carolina, Tennessee) with offices in the Tri-Cities and Knoxville. Wise Property Solutions provides condo and homeowners association management services in Johnson City, TN; Bristol, TN; Kingsport, TN; Knoxville, TN and the surrounding region.