HOA getting sued buy home owners that it is Fraudulent

Started by MarkH • 6 replies • 2317 views

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MarkH (Ohio)
Posts: 3

Posted:

Please Help, 5 year old HOA in OHIO getting sued by Homeowners and "HomeOwner Lawyer". They want out out of the association. After five years our dam broke and it created a $2500 assesment to all 44 members now 20 of these members dont want to pay. Our insurance company says let them out they are no good to us. I say we can't they are fragmented throught the neighborhood. The court and lawyers have spent 50k arguing so far and no trial yet. I NEED A PRO who know association law WE HAVE E&O INSURANCE AND THEIR LAWYER SEEMS TO be watching out for the Insurance company amd pay-out versus what is best for the Association.
Does a Association membership have a value$$ (I know the short 5 years I have been in it I have paid out over 3500 in dues and assestments....
Can I(we) be told to take on more liability? just because
Our deeds and bylaws say we must maintain the common property.

Thanks in advance

RogerB (Colorado)
Posts: 5,067

Posted:

Mark, what does your lawyer (pro) say? I don't see where they have any chance of winning, and it can cost them much more than $2,500 each. Also it may include the prevailing parties legal expenses. Are these owners aware of their potential costs and chance of winning? I bet the attorneys for neither side have advised their client on these two critical items.

It seems to me the only way for them to get out of the HOA is under the conditions by which the Declaration can be terminated .. OR .. if the courts find a basis to order termination of the HOA. And this doesn't seem likely since the HOA is responsible for maintaining the dam and other common areas. The courts would need to establish there is another governmental agency which would take over this responsibility.

If I wanted out of this HOA I would pay the special assessment, sell, and move.

EdR (Texas)
Posts: 170

Posted:

Is insurance claim not a possibility to pay for this dam breaking--that's over $100,000 you are talking about. Were your homeowners told when they bought into the assn. that the dam COULD break and there could be a special assessment? And, was this a natural act, like a heavy rainfall or erosion over a period of time? Why is there a dam in the first place? The reason for the dam breaking might be what you need to focus on. For example, if your assn's pool gets worn out from normal wear and tear over a long period of time, it's been shared by everyone, etc., but a sudden reduction of water by vandalism or negligence, etc., and the walls cave in, might be insurable, etc.?
It's not that easy to move just because you don't want to pay a special assessment,and who knows what other issues might be involved. And, it could also be very reasonable, but $2.5K would be a lot to me to pay out at this time, even though I'd rather pay it than pay an attorney. The reason I'm asking about what caused it is as you've probably figured out from some of my posts, our assn. is digging deeper into our dues and reserves to overhaul a swimming pool. Admittedly, it's time for SOME of the work, but the pool has had a lot of use, extra wear and tear, from outsiders permitted by the people in the HOA who have solicited over one-third from outside for their swimteam just so they can stay in a certain division, and not have to travel as far to meets. One pool repair person told the board that the wear and tear was accelerated because of the additional use by such a large swim team---everyone in the assn. is paying for that without havnig been given a choice, ever. It is possible that the dam could be a similar problem, or that no one got permission from the assn. members to allow activity that caused destruction or erosion--like it was with our board. Bottomline, it isn't fair for a few to decide about everyone's monies, before or after they spend it. Just my thoughts.
EdR

MarkH (Ohio)
Posts: 3

Posted:

Yes the dam was passed on in bad shape and no we only have liability and e&O insuance. But the matter that is important right now is that Our "Insuance lawyer" that is representing the association is recomending that we let these people out 22 of them 1/2 of the Association. He does not want this to go to court. I feel that I the judge would make a decision to let them out because of some technical error our officers did then the E&O insurnce would have to pay the surviving owners for damages. (Increased liability)... However if he is sucessfull into scaring my HOA into letting them out on our own free will then the Insurance company is off th hook. I feel this Lawyer is not advers to Association law or Associations power in not worth the paper there rules are written on....
Does anybody have any cases where a judge order people to be let out of the Association.
Is there a formula of what a membership is worth??

RogerB (Colorado)
Posts: 5,067

Posted:

Mark, the insurance lawyer represents the insurance company not the Association. Get your own HOA attorney and his opinion on what insurance coverage you have; what liability the previous owner of the dam might have; and how the Association should deal with the insurance company and their lawyer.

I have never hear of a judge letting select people out of an HOA. When a "contiguous segment" of an HOA wants to be 'de-annexed' (if there is such a word) and this is approved by over 50% or more of all owners and mortgagees as allowed by the Declaration a judge might approve their request. Technical errors of officers is not a basis.

No formula.

LisaS (Illinois)
Posts: 341

Posted:

I agree with Roger. At the very least you need to schedule a consultation with an HOA attorney. You need someone who is experienced and will represent the interests of the association. They may also have advice regarding what to do about the dam (liability, etc).

It is not as easy to be 'let out' of an association as you have apparently been told. The 'membership' is attached to the deed for the land, as well as your CCR's.

I would be willing to guess that if this went to court, the association would be left intact. And those that broguht the suit would likely be left with the bill for ALL attorney fees and court costs. This would be substantial.

Best of Luck,
Lisa

MarkH (Ohio)
Posts: 3

Posted:

Thankyou all,
I am schedule to meet a HOA attorney next week.

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