HOA Fiduciary? You Could Be Liable in Homeowner Disputes

Whether you have served as an HOA fiduciary or are a homeowner in a development, you probably realize these organizations can wield quite a lot of power in a small community; in fact, before moving into a neighborhood, it is not only important to find out as much as possible about your potential new home—but also the HOA.

Usually formed as non-profits, homeowner’s associations offer many benefits, as well as some drawbacks. An HOA that has their act together and serves the community well will see that it maintains a tidy and attractive appearance through proper landscaping and maintenance of common areas. You will probably have access to a pool and clubhouse, convenient for having small parties or receptions, and there may even be a gym or more. With all these perks though come fees, and often homeowners find them to be unconscionably high—along with including services that having no bearing on their lifestyles. You may or may not agree with being required to hefty HOA fees along with your own property taxes and other home maintenance and repair bills that are left to you.

The HOA may be a force to contend with in many communities, but if you are serving as a member on an HOA board, you will discover on the flip side that this is very serious business as well—and you are beholden to both the Board and the homeowners. Even though you are probably not paid for your duties, acting as a volunteer from the community, if you are on the Board, your duties may be extensive and even stressful at times.

In taking on the role of a fiduciary, you are serving as a representative of the HOA and can be held legally responsible if found negligent. You must be able to remain neutral in matters of the development—some of which are confidential—and adhere to the schedule for meetings, creating budgets, and handling issues that may apply to other homeowners. The general concepts to be upheld by the fiduciary as follows:

Duty of care
Duty of loyalty
Duty to act within the scope of authority

Because homeowners can sue not only the HOA but members of the Board personally, you must have a clear understanding of your responsibilities and make sure that you are always acting in good faith. Be educated on your role so that you do not become liable for a fiduciary breach. Read the governing documents thoroughly as well as finding out what the limits on liability are for your HOA.

If you are concerned about your duties within the HOA or have liability concerns, contact Attorney Shane Coons, experienced in handling a wide range of business matters, to include fiduciary duty disputes. We would be glad to review your case and help you explore your options. Call now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com.

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HOA Fiduciary? You Could Be Liable in Homeowner Disputes

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