Lawsuit

The treasurer on our board is suing the HOA. This information is being kept a secret from owners. The only reason I know is my husband is on the board and I overheard him discussing it with the Pres of the board on the telephone. Also, we just held elections for our board and I wonder how many would have voted for this man had they known we were being sued by him. Thoughts?

According to our Bylaws an owner engaged in any legal action against the HOA can neither run for nor serve on the BOD. In the case of the OP, the BOD Member suing the BOD would have been suspended from the BOD while awaiting the result of the lawsuit.

A lawsuit shouldn't be kept secret from the HOA members. Now that doesn't mean one goes running their mouths about the details of the case. Just that there is a pending lawsuit against the HOA. That it is about X and they want X. Lawsuits can't be hidden even with big corporations.

Now the board should have 1 person usually the President assigned to talk to the HOA's lawyer. The board can discuss the issue but should be limited to approving the President/POC to be the one to actually be point to the lawyer. It will lessen confusion and expense.

Suing your HOA is suing yourself and your neighbors. So it's not something that should be kept in the dark. Just the details being discussed with the lawyer.

Not a lawyer, but I suspect it's due to the difference between suing a corporation (the HOA) vs. suing the homeowners as individuals. I know that I'm never notified about lawsuits against corporations in which I own stock, even though I am "an owner" and may suffer a financial loss as a result.

I do agree that at some point homeowners should know about it. I'm just not sure exactly when that should occur, and I suspect it depends on the nature of the lawsuit, so we can't generalize.

You are correct.

Oo oo oo, I know all about mold in condos!

* Your governing documents will spell out what is part of the unit and what is common area. The homeowner is responsible for repairs to his unit and the association is responsible for repairs to the common area.

* The only time this changes is if the association is carrying what's called all-in insurance. If there is an insurable event, the association's insurance may cover repairs to the unit. Not all condo associations have this type of insurance - some insure only the common areas. So you need to know what kind you have.

* People often confuse maintenance and insurable events. Association insurance will cover events that are sudden and not preventable (as the broken pipes or storm damage). Mold is almost always considered a maintenance item since it results from water intrusion occurring over an extended period of time.

* Boards often take responsibility for unit damage originating in the common area. According to my insurance agent, they should not do that. Insurance doesn't look at "who is to blame" - it's strictly who is responsible for what according to the policies and the governing documents.

* With the incident above, there would be negligence only if the unit owner was aware of the leak in the common area *and* reported that leak promptly *and* the association failed to make repairs. The problem with small leaks is that the mold is often your first clue that there is a problem, and it generally takes months or even years to make itself known. That is not negligence. That is why condo owners carry insurance on their units.

I hope the person with the mold did his homework, because he may be spending a lot of money on legal bills as well as condo repairs.

But, debra, what was the source of the moisture or water that caused the mold?

What is a "drop down" part of a ceiling? A soffit?

Why is this a lawsuit and not an insurance claim?

Cathy3A - You said that you have never been notified about lawsuits your corporations you have stock in. This is a requirement of the corporation to tell their stockholders. It is in the company's "Prospectus" that is sent out to their stock holders. If you read the "fine print" as I call it, it has to be revealed in it. So if you get a "Prospectus" from a corporation READ it. The good and the bad has to be revealed in it.

It’s a lower part of the ceiling where duct work, electric wires, etc are. He is claiming because the unit next door to him opened up their part of the drop down it caused moisture from humidity into his unit. It’s extremely hard for me to understand. He is not living in the unit, has not treated the mold, it is continuing to grow, and the court date is not until 2021. There was no actual water leak. It’s all from humidity. We live on the beach. I am terribly concerned because I am on a fixed income and a large special assessment would wipe me out.

The homeowners are paying for this attorney so how can it be right to keep it from us?

It shouldn't be kept. Also this person suing has the legal obligation to mitigate their own damages. Meaning they can't just let the mold grow. They need to take the proper steps of rectifying the situation. It is the expense of them doing so or insurance claim money they are to sue for.

I think your HOA is dealing with a bit of an idiot or a suspicious Treasurer. I'd remove him from that position ASAP. Anyone knows if you live near a beach that you are going to be at a higher risk of getting mold. Also living in a salt environment other outside items are subject to erosion issues.

Your HOA should contact their insurance company and maybe use their lawyer to represent the HOA. Plus make sure the HOA is using just ONE POC to talk to the lawyer. Your HOA can also file a countersuit and ask for it's legal expenses to be paid if they lose. Which they have a very good chance or atleast only getting the expenses back they spent on remediating the mold problem.

I would also say if they are blaming the neighbor, then it may not even be a HOA issue. It should be a claim against that owner's homeowner's insurance. So would not be surprised if case is thrown out of court based on the wrong party being sued. Something should also question with the lawyer. Hopefully your HOA didn't hire one that says "I will do whatever you tell me to do" type. That should raise red flags...

Thank you so much for your advice. My husband is secretary on the board so tonight I read every page of his big book. I found only one small paragraph pertaining to the complaint. Turns out it says nothing about a”drop down” ceiling being opened and causing moisture. His complaint says his next door neighbor left her sliding glass door opened causing temp to rise to 77 degrees and supposedly causing condensation in his unit resulting in mold. I don’t know or understand why it is a lawsuit and not an insurance claim. My husband was just elected to the board two months ago so he has a lot to learn. I’m glad I found this forum to ask questions and get advice. I’m sorry everybody for confusion with the drop down ceiling because that’s the hearsay info. Then I read the initial complaint. Thanks for all your helpful advice everyone!

He can't legally rent the place out if it has mold. So this guy sounds like he's going to take the HOA for a ride. Otherwise why is he waiting? Why is this a HOA matter? He claims his neighbor did the damage, then why the HOA responsible?

I would have the HOA talk to their insurance carrier about this situation. It could be filed as an insurance claim later. Something to consider.

The owners should NOT be in the dark about the lawsuit. Details of what is discussed with the lawyer yes. There is a form (PUD) form that is filled out for certain loans. (FHA etc...) That form the HOA has to reveal if the HOA is involved with a lawsuit, liens, or foreclosure. Plus their rental percentage. This matter for the offering of some loan programs and the rate of refinancing. Re-fi rates can be effected. FHA loans or other government like loans may not be offered.

We aren't talking about making a big deal on this. Just that there is one filed and for what. Suing your HOA is suing yourself and your neighbors. So considering you are ALL neighbors, you should know the effects of such filings.

The fact still remains you sue your HOA your suing yourself and your neighbors. So it's just the consequences you have to accept or decide NOT to accept. There are ALWAYS consequences to your actions. No judging if you are right or wrong when I say this. Pointing out a CONSEQUENCE you should be prepared for and understand. Not everyone is going to be on your side when they find out your suing them. Your best bet if your suing your HOA is to do it as a large group. However, if you have a large enough group then you don't have to sue at all. You can vote out a board or change the rules.