Start the New Year off right! Take a look at the top reasons community members bring a claim against the association. Learn from what others have experienced so that this year can be your best year yet!

#1 Claim Driver: Discrimination

• Discrimination claims can appear in many ways so take care and consider a homeowner’s request carefully
• If you grant one homeowner’s request, but deny another homeowner’s similar request, it can lead to a discrimination or selective enforcement claim
• Consider a homeowner’s request for an assistance animal to make sure you do not violate the Fair Housing Act (FHA)² or the Americans With Disability Act (ADA)³
• Engage in the interactive process with the homeowner when in receipt of a request for an accommodation

#2 Claim Driver: Maintenance/Repair of Common Elements

• Maintaining the community is vital to the enjoyment and safety of the homeowners
• Conduct regular inspections to help identify necessary maintenance needs
• Caring for and repairing common areas can be costly so prepare by funding reserves adequately
• Consider conducting a reserve study to help determine what funds are needed in the short and long term

#3 Claim Driver: Improper Assessments

• Make sure assessments are fair and applied to all equally
• Provide sufficient notice when special assessments are levied
• Be transparent as to why a special assessment is being made

#4 Claim Driver: Architectural Review Decisions

• Respond timely to architectural requests from homeowners
• Act consistently when making decisions
• Follow the association’s bylaws as they appear in the Covenants, Conditions, and Restrictions (the CC&Rs)

#5 Claim Driver: Breach of contract

• Follow your fiduciary duties as a board member which require you to put the association’s needs above your own
• Make decisions based on sound judgment
• When entering a contract with an outside vendor, research who will do the best job for the best price
• Understand your financial and contractual responsibilities and obligations

#6 Claim Driver: Intentional Acts

• Act responsibly and honestly in handling association funds to avoid fraud, theft or misappropriation allegations
• Record financial transactions to avoid allegations of misrepresentations
• Provide notice to a homeowner of entry to prevent a claim of invasion of privacy, trespass and/or wrongful entry

#7 Claim Driver: Harassment

• Treat homeowners fairly and avoid singling any homeowner out
• Have a procedure to address complaints timely
• Work to create an environment where homeowners feel their concerns are addressed

#8 Claim Driver: Records Request Compliance

• Communicate with homeowners
• Maintain proper records

#9 Claim Driver: Board Election Disputes

• Know the state and local legal requirements that should be followed when conducting board elections
• Consider engaging the assistance of counsel in drafting election guidelines
• Follow election procedures as outlined in the association’s bylaws

#10 Claim Driver: Defamation

• Be aware of what is written in the association’s newsletter, website and any material distributed within the community
• Consider creating a forum for disputes to be heard and addressed
• Set standards as to what behavior will not be tolerated

For more information and a broad overview of these topics see: https://www.ihginsurance.com/Risk-Education/Other/What-it-Means-to-be-a-Member-of-the-Board-An-Onboarding-Guide

 

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Disclaimer: The purpose of this Alert is to provide information, rather than advice or opinion. The information it contains is accurate to the best of the author’s knowledge as of the date it was written, but it does not constitute and cannot substitute for the advice of a retained legal professional. Only your own attorney can provide you with assurances that the information contained in this article is applicable or appropriate to your particular situation. Accordingly, you should not rely upon (or act upon, or refrain from acting upon) this article without first seeking legal advice from a lawyer admitted to practice in the relevant jurisdiction.

The examples described in this article are for illustrative purposes only. They are not intended to constitute a contract, to establish any duties or standards of care, or to acknowledge or imply that any given factual situation would be covered under any CNA insurance policy. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All CNA products and services may not be available in all states and may be subject to change without notice.

“CNA” is a registered trademark of CNA Financial Corporation. Certain CNA Financial Corporation subsidiaries use the “CNA” trademark in connection with insurance underwriting and claims activities. Copyright © 2024 CNA. All rights reserved.

¹Based on CNA claims data from January 2021 to December 2023.
²42 U.S. Code § 3604
³42 U.S. Code § 12101