There are certain qualities of treatment that homeowners should expect from their association. These expectations are based on rights established in the law, or on basic standards of decency and respect. As an association, it’s absolutely crucial that you understand what your obligations are to your community and its residents. If you fail to deliver a necessary service, or one of your association board members does not properly serve the community, resident satisfaction will wane and the association could find itself on the line for a Directors & Officers claim.
In addition to protecting your association with a comprehensive HOA Insurance program, make sure to understand your association’s obligations when it comes to property maintenance and service.
Obligations
HOAs are entrusted with making the decisions that affect the values of the properties in the community. One of the primary responsibilities is to protect, preserve, and enhance the value of the physical property governed by the community association. It is also HOA responsibility to facilitate the enjoyment of the community, by setting rules and regulations for residential conduct, including usage of common spaces, landscaping standards, and anything else that affects the overall residential environment of a community.
In most developments, maintaining, repairing, and replacing the common areas are among the HOA’s major duties, while adopting an annual budget for anticipated costs to maintain the common areas. Common area maintenance responsibilities will vary depending on community but may include acts like heating and lighting a clubhouse, maintaining the community pools and elevators, and providing landscaping services for the common parks. The HOA should also take care of repairs or replacements for issues such as broken roofs, damaged fitness equipment, or an old, unsafe elevator.
HOAs must respond to all inquiries, unless they are ludicrous or threatening.
Records should be kept in a reliable routine manner, while disclosure procedures ensure easy access to most documents within a reasonable time and with fair restrictions.
Residents have the right to a timely notice and a fair opportunity to be heard if the HOA intends to take disciplinary action against them with consistent treatment in enforcement of rules and regulations.
Resident Action for Breach of Duty
Residents have right to sue the HOA for breach of fiduciary duties. To fulfill these duties, the HOA must exercise ordinary care, in a reasonable and good faith manner, in the performance of its duties. A breach of duty might be found for example if the HOA is failing to maintain the common areas due to poor financial management. A board member could be liable for breach of fiduciary duty if their is failure to perform any of these duties in a reasonably diligent and prudent manner. HOAs must act in the best interest of the community. A resident might have a claim for breach of duty against a board member who votes to invest the dues in the stock market instead of maintenance.
Residents have the right to expect the HOA to exercise ordinary care in the performance of its duties. If the HOA fails to act in a reasonably safe and prudent manner, a negligence claim can be filed.
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.
