As the HOA president am I liable personally?

Started by DaleF1 • 7 replies • 1680 views

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DaleF1 (Virginia)
Posts: 2

Posted:

I was appointed president of my HOA after going to just one meeting. This HOA is not a big organization, we only have 18 units (Townhomes). I'm concerned that I will be liable for any wrong doing of the board from the past. I need to know what I'm walking into. What is expected of me in my new role? If possible, please give me as much advice to help me on my new adventure. Thank you in advance for your help.

Dale

MicheleD (Kentucky)
Posts: 4,491

Posted:

I'm not sure of the laws in Virginia, however, it would be wise to discern whether the organization has Directors and Officers insurance.

That will put some layer of protection in for you personally in regards to any actions you take (or don't take) in the course of your duties as president.

It doesn't protect you from any criminal acts you might indulge in while in office, however.

JS1 (Nevada)
Posts: 30

Posted:

Dale, Welcome to the wonderful world of HOA volunteers! First of all you will want to clarify if you elected or appointed. Some D&O insurance carriers don't cover "appointed" officers. So some of the words of wisdom I would offer are, 1. read and understand to the best of your ability the governing documents of your association and the state and applicable federal laws that governern unit owner associations. 2. Communicate with the homeowners on a regular and meaning basis. 3. Encourage other to volunteer to help direct the corporation.
and 4th - You are not in this alone, I think that on this website you will find people who have gone through about everything imaginable. So on behalf of everyone who shares this path with you.... Good luck, keep your sense of humor, and welcome to one of the most meaningful and thankless volunteer jobs you'll ever have.

JimS (Delaware)
Posts: 10

Posted:

Do you have by laws. This should explain your duties. There should also be a clause in the by laws or covenants regarding the liability of directors. We have insurance for our common grounds and for liability of the directors. If it isn't clear, check the state laws and see an insurance agent who is familiar with hoas to be sure you are covered.

It is fun!!

RogerB (Colorado)
Posts: 5,067

Posted:

Dale,
You can be held personally liable for wrong doing - fraud, theft, and knowingly not complying with your governing documents. In other words alway act in good faith using good business judgement.
In addition
1) have D&O insurance coverage;
2) be incorporated and have proper indemnification wording; and
3) have proper indemnification wording in the By-laws.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

DaleF1: You need to refer to your official documents to learn IF they request the Board, past and current, holds D&O liability insurance. IF not, your state docs probably do. Further, If the Board does hold the insurance currently, speak to the insurance company about your concerns. They will advise you directly on the present coverage.

DaleF1 (Virginia)
Posts: 2

Posted:

Thank you so much for all of your advise.
I purchased my home last July and became president last month so this is a very interesting challenge.

SharonM3 (Virginia)
Posts: 23

Posted:

Dale,
You personally might also want to consider an umbrella policy for yourself - contact your property and casualty agent(s) to discuss. Make sure you inform them that you are on a board. A little extra protection, both for home and auto, as well as for this. Note that this is in addition to - not a substitute for - the Association having D&O insurance.

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