How do HOA board members feel when HOA is sued?

Hi Paul,

A recent threat of a lawsuit against the HOA was not taken personally by me as board member. I understood the logic and still disagreed w/ the dues payer and was prepared to fight as representative of the neighborhood given what the person was demanding of the HOA. Sometimes, sadly, it's how the game is played between owners and the HOA.

It depends on the details of the case. People sue HOAs for all sorts of reasons, some of which may be justified and others not.

In general I'm concerned that someone is spending "my" money. However, there can be times when the expense is justified to prevent more serious harm down the road. (And I won't serve on a board where I'm the sole voice of reason who can't stop the clueless majority from running amok. I'll be on the opposite side trying to replace the bad board members.)

The folks I get annoyed at are the ones that threaten to sue for frivolous or self-serving reasons. As a board member, my Unwritten Rule #1 is "don't get sued", and Unwritten Rule #1.5 is "be very sure that if you are sued, you will win." When I was on the board, we always made sure of ourselves legally before we took actions. (Fortunately we have a law firm on retainer that specialized in association law. In return for that retainer, we get unlimited free 15 minute phone calls plus quarterly free seminars plus other educational materials. Their motto is "educate, don't litigate", and I can't say enough good things about them.) As a result, whenever anyone threatened to sue us, my reaction was "bring it on, buddy."

As a BOD Member I will talk to an owner threatening a lawsuit. Once that suit is filed all communication will be via the BOD's lawyer. I think....as we have never been sued.....LOL

Never been sued. But a good number of threats.

If we got sued, I would think positively on it. Someone took the time and spent the money to pursue a grievance. Great. We need to do the same in return.

Nor do I have an issue when homeowners threaten to sue. Usually they're just mouthing off. Some think that copying a lawyer on a nasty email to the HOA will add something, but the truth is that most of my BOD is immune from such threats. It's not going to influence their thinking.

My gripe is with letters from lawyers. It's obvious right away that the letter is from a friend or family member who is doing a "favor". I can tell that the work is done for free because, even if the issue went to court, the recovery wouldn't cover the cost of the lawyer.

The problem with a lawyer threat letter is that it creates a dilemma for the BOD. One one hand, there's a fiduciary responsibility against wasting HOA money. On the other, we're a corporation, and if things go to court, we're obligated to be represented by counsel. So that means that the BOD has to engage in an elaborate discussion of the situation. A group of 5 people, none of them lawyers, are up against someone skilled in ways that they aren't. And that conversation is difficult, especially for a relatively new BOD member who hasn't been through the experience before.

Two things we do:
1. We write a letter from the BOD to the lawyer. We always open by saying: "We received your threat letter." We always want to dispel any notion that this is a "friendly" communication that the lawyer began. "Slick" and "friendly" are not the same thing.
2. We shut off all communications to the homeowner. Everything goes to the homeowner's lawyer. We aren't going to get caught in the cross-fire from the lawyer and the lawyer's "client".

My personal reaction is that it's an incredible drain on our limited time.

Real world example. We got a threat letter from a NJ lawyer that we were violating the FDCPA, a federal statute. He's not licensed to practice law in PA. But since NJ and PA are both in the 3rd Circuit, he can get away with writing a threat letter to a PA HOA. We called him on it. We sent all HOA communications to him instead of his client. Ultimately, he blocked our emails. Which was fine with us.

It didn't bother me - probably because we didn't have too many lawsuits! If you're in an organization, you will always come across some people who get P.O.ed for one reason or another and react in various ways. Sometimes they threaten to sue. A few even go as far as to file the papers in court.

As much as possible, I think HOA boards should behave in a responsible manner and explain what's being done, how it'll be done, when and so forth. Keep educating your homeowners - sometimes you'll have to repeat things over and over, but it takes a few people more time before they realize this is how it is. Got a better idea - bring it! That'll reduce a huge number of problems, but as for the rest, do your due diligence as far as following your procedures (and document the hell out of them), be fair but consistent.

I agree the board should try to talk things out, but you also know some people just don't listen to reason and think they can do whatever they want for whatever reason. For those folk, let them go to court - if the board did its job, there's a good chance contrary people will get their ass handed to them by the judge when the Association can back up everything they did.