No Liability Insurance on Common Open Space

How many owners are there in your association? You may be able to able to endorse your homeowner's policy to cover some of your risk or exposure as a Board Member when it comes to E&O coverage, but probably not general liability for the association. IMO, I think that you're running an unneccesary risk by not having General Liability coverage for the association. Have you asked a commercial agent or someone that specializes in this type of risk? I can't imagine that the premiums on something like this would be that substantial. Have you inquired about this and priced the risk? While placing no tresspassing signs on the property might help mitigate your liability exposure, it won't keep someone from suing you for any reason!

Also work out something with the homeowner that has blocked the common area. I can't visualize how he's making the easement part of his property, but this is not something that you want to walk away from and then try to address it several years later.

Certainly, you have HOA docs - How do they read? Most HOA documents specifically say that the HOA MUST carry liability insurance.

Good luck.

Hi Mike, Thank you for your response. We have 40 homes in our development. Problem is most everyone was told by the builders agent, at the model house, there was no HOA here. So after moving in we found we had an HOA for the common open space. The stormwater management could be put in our HOA if 100 % of the owners signed a statement saying they wanted that to happen. As it is now we only have the 21 Acres of commmon open space which is deeded to the HOA to worry about. We do have Covenants and Restrictions. These are no more than what the county would enforce except for the part about common open space not being utilized by a property owner for private use. The COS is for the enjoyment of all. Nothing like most places have. However, no one is enforcing them because we have no active HOA. Tried to have a meeting to discuss our issues like liability insurance which will cost us $300.00 per year or $7.50 a year per lot. Meeting ended up with two people convincing most everyone it is best to forget the insurance so we do not have to have an HOA. They said the No-Trespassing signs were all that will ever be needed. So most everyone sided with this and only a few are now concerned as to what could happen if someone is hurt on the Common Open Space. One lot owner said having an HOA to obtain insurance is making a mountain out of a mole hill.

I'll try to explain the fence. We live in a development that consists of two cuddle sacks. You enter the development on the access road then turn left for the North side and right for the South side. Each end of the development (north and south) have common open space. The south end has 6 acres that is behind the two houses at the horse shoe bend of the the cuddle sack. The easement is about one acre long starts at the street going between the two houses back to the 6 acres of common open space that runs a long the back of the development. This is the only easement to access this 6 acres from inside the development. Otherwise you must go out of the development and down about 1/2 mile to another road then gain access to the 6 acres from the back. The two lot owners that have fenced in the easement know what they have done but are very vociferous about keeping people from the easement, for what ever reasons no one else in the development seems to care. I know this is not right. I am concerned about liability for something I have no access to. I would like access to walk along the wood line especially in the fall but, I would have to jump a fence and face the dogs. If we have no active HOA and no one else cares whats to do??

$7.50 per household? That's peace of mind for a cheap price... I would think. It sounds like you need to talk to a PM or attorney in Md. I would think that if someone did in fact file suit against the HOA, that you would all might be liable and might be subject to a special assessment. I take it that the streets are state or county maintained and not maintained by the HOA? Is that the case? Is this HOA voluntary or mandatory?

Yes, I agree that $7.50 per year is cheap, very cheap! However, it requires having an active HOA. Yes, We have a mandatory HOA , state law says any development with 12 or more houses will have an HOA. We are incorporated. Streets are maintained by the county. Even if we could dissolve the corporation we would still be stuck with the common open space deeded to the HOA. Two people are telling everyone that we just let ithe HOA die out and in 8-10 years the state will drop us from the corporate docs. I believe if we do that we could be resurrected by a court and have to pay all back dues and the law suit too, if an accident ever did happen on the Common open space. A lawyer told me this was so but no one believes that. So... any ideas on how a few can protect ourselves from a law suit in case of an accident on the Common Open Space??

Jadedone, forgot to say that all the time the developer had control of our HOA we have never had a meeting or paid dues. Guess that is one reason most lot owners see no need to start up an active HOA now.

Dilly,
You owners are FAR from being ready for a turnover. You need legal advise and a engineering study before you should accept anything from the developer.
On your purchase contract, was there a deed restricted community clause that you signed? If so, you are stuck with having a HOA for now. Get all of the owners together and get some information but do not sign for a takeover.
Also look up to see if the developer has a bond either with your county or your so called association. If he does, do not sign a release on that. He has failed to keep his end of the deal with what you have told us.

Donna, I agree we owners are FAR from being ready for a turnover. However, the developer is not carrying any liability insurance on the Common Open Space because he too sees no need to do so. He also believes if we just post no-trespassing signs we will be ok. This is where some people are getting the idea that we do not need
a liability policy or a HOA. If I had documentation to prove this is true I would be a happy camper too...but right now all I have is the say so of the developer. The developer also told one member that only 10% of the HOAs in our county are active so no problem if we follow suit. Again, that may be true but is it a wise choice?? Any one have an opinion?