Legal Articles

Pet-ifying Your HOA
The three greatest bones of contention within a homeowner association are Pets, Parking and People. Pets are particularly irksome because to non-pet owners they’re animals but to the owners they’re family. These opposing views are a setup for conflict. In the past, some HOAs have tried to dodge the problem altogether by banning pets of all kinds. But pet ownership is considered such a basic right that bans inevitably create willful violations. Then there are the exceptions which every HOA must make for "service" pets. While this used to mean seeing eye dogs, there is now a whole range of acceptable "services" that qualify a pet including (get ready) companionship.

Since they are such an integral part of human existence, the HOA should find a reasonable middle ground policy. Such a policy is not likely to satisfy the extremists but will work in most cases. Here are some basic provisions to work into your policy:

Only dogs, cats, birds or other traditional household pets are permitted.
No animal shall be kept or bred for commercial purposes.
Pets may not exceed ____ pounds fully grown.
Total number of pets and offspring per residence is limited to ____.
All pets shall be registered and inoculated as required by local law.
No pets are permitted to run at large.
All pets must be under the owner’s physical control (by leash or otherwise) when in the common area.
Pet damage is the responsibility of the owner. Damage to common area will be repaired by the HOA and repair costs billed to the resident (or the unit owner if the pet owner is a renter).
Owners must pick up and dispose of all pet litter immediately.
Any pet that disturbs the neighbors, is allowed to run freely, is aggressive or destructive to association property is subject to permanent removal from the property. In such case, the pet owner (or the unit owner if the pet owner is a renter) will be given notice to remove the pet from the property within ___ days. If the pet is not removed by the deadline, a fine of $___ per day will be chargeable to unit owner’s account and subject to normal collection procedures established by the association.

Procedure for Filing Complaints: If a pet is being offensive, offended party should first discuss the issue with the pet owner and request correction. If the condition persists, submit a written request for relief to the Board explaining the offense, time and place. As with any rule, the Board needs to provide for give and take. For example, since animals do wander, some of the pet complaints could originate from pets of neighboring properties. If the issue involves a resident animal, be sensitive but firm. Criticizing a pet is like criticizing someone’s kid. It must be done tactfully. Try not to be too "dog-matic" or you may run "a fowl" with "cat-astrophic" results. (Ouch!) BACK

Beat the Press
An overweight dog, a disabled man and a media firestorm. Who would have thought that a condo board could raise such a brouhaha for doing the right thing?

It all started with a pet policy that placed a 40-pound weight restriction. So when Robert Landes and his 60 pound Airedale moved in, the board quickly informed him that there was a problem. Besides the weight issue, neighbors claimed the dog was running loose and vicious. The board attempted to mediate with no success. After a series of ultimatums, the board voted to evict Landes.

That move landed the condo in a federal lawsuit. Landes, who is mentally and physically disabled, filed a suit claiming that the condominium’s rules are insensitive to the needs of disabled people and violate the Americans With Disabilities Act (ADA) and the Fair Housing Act. The HOA’s attorney maintains that Landes was well aware of the restriction prior to purchase, but chose to ignore it.

"No one is denying that Landes is disabled," said the HOA’s attorney, "but we dispute whether the dog is functional or just a companion. If it’s not functional to his disability, ADA doesn’t protect that. He can enjoy the unit without that dog. He can also get a dog that weighs less and will be an equal companion after a time."

Couldn’t the board just have let this one go? Because the rule is a covenant in the governing documents, it is not just a matter of the board voting to drop it. The board’s action was predetermined. A covenant can only be changed after a vote by all the owners. The board did exactly what it should have. It was clear what the rule was, it enforced it, made attempts at mediation, and acted quickly.

What about the bad publicity? An article in the local newspaper, for example, didn’t mention the efforts the board had made in mediating the problem or the other issues besides the dog’s weight, only that it was voting to evict Landes. There’s not a lot a board can do about a one-sided press account, but the negative murmurs among the members can be reduced by a letter of explanation.

In tough cases like this, the board needs to decide on a long-range course. How strongly does it feel about the restriction? Exceptions can be made as long as they don’t trample on other people’s rights. But the board needs to decide if the issue is really is worth fighting for. By Michael Sullivan. BACK

No Smoking Verdict
June 15, 2005. In a case that tobacco law specialists say is one of the first of its kind in the nation, a Boston Housing Court jury ruled that a South Boston couple could be evicted from their rented water-view loft for heavy smoking, even though smoking was allowed in their lease.

The landlord who rented the Sleeper Street unit to Erin Carey and Ted Baar ordered them out within a week last November, after neighbors complained of the smoke odors filtering into their apartments. Carey and Baar, who each smoke about a pack a day and run an information technology sales business out of the one-bedroom unit, fought the eviction, arguing in court that the converted warehouse's shoddy construction and aging ventilation system were to blame for the wayward odors.

Last Friday, a jury ruled in favor of the landlord and the eviction. Even though the landlord could have written a nonsmoking clause into the lease and didn't, the jury found that the couple's heavy smoking violated a more general clause banning ''any nuisance; any offensive noise, odor or fumes; or any hazard to health."

Although the verdict is not binding on other courts, tobacco law specialists said the decision is one of the nation's first to declare smoking a nuisance serious enough to become grounds for eviction.

''It is very important, because it is a sign that people are more aware of how dangerous second-hand smoke is," said Professor Richard Daynard, chairman of Northeastern University's Tobacco Products Liability Project, which tracks second-hand smoke litigation nationally. I believe this decision could accelerate the willingness of courts to decide that, if you are creating smoke that is seeping into other people's units, you are doing something that has to stop." He said the verdict could be cited in other Boston tenant-landlord disputes.

John Forcier, another member of the Dockside Place Condominium Trust board who is acting as its spokesman, said that the smell of smoke wafting into the other units was overwhelming and that one neighbor feared for the health of her 4-month-old baby.

Forcier said that the couple's heavy smoking, not the construction of the building, was the problem. At least a half-dozen other residents of the building are known smokers, he said, but the only complaints the board ever received were about Carey and Baar. ''You could walk in the hallway and smell it," said Forcier, who said his unit isn't affected. ''One time, after spending about an hour in the unit upstairs from them, I went home smelling like I had been in a bar."

The landlord’s lawyer, Peter S. Brooks, said yesterday that the jury correctly found that, under the state sanitary code, landlords are not required to ''prevent odors from escaping an apartment" and that it was the couple's responsibility to moderate their smoking. Brooks said last week's decision will become a useful tool for protecting the health of other tenants.

Excerpts from article by Ralph Ranalli and Jonathan Saltzman, Boston Globe BACK

What are CC&Rs?
"CC&Rs" is an acronym commonly used in the homeowner association industry. It means "Codes, Conditions & Restrictions". It is used generically for any HOA rule or policy. But it’s more complicated than that. In the HOA environment, there may be policies, procedures, rules, regulations and resolutions. All are necessary to do the HOA business properly. But what exactly are policies, procedures, rules, regulations and resolutions?

Policy: A policy is a standard adopted by the Board that sets out the beliefs, values and objectives that causes the homeowner association to act. (like a collection policy, an enforcement policy, or a conduct of meetings policy). A homeowner association’s policies communicate, organize, and focus the resources of the homeowner association.

Procedure: A procedure is the process that accomplishes a particular objective. For example, the homeowner association should have a clear and defined policy regarding assessment collection The detailed steps of how this policy is achieved comprises the procedure of collecting assessments.

Rule or Regulation: A homeowner association’s board of directors adopts rules, regulations or guidelines to define desired behaviors and to set limits on allowable uses of the common elements and homes or units, architectural changes and the behavior of residents and guests. Some typical examples of rules include pets, parking, noise and use of HOA facilities.

Resolutions: A resolution is a method of formalizing a decision made by an homeowner association’s board of directors. Resolutions are used to adopt policies, procedures, rules and regulations or to clarify ambiguous terms in the governing documents. Resolutions should include four components:

1) Authority. The section of the governing documents that gives the board authority to adopt resolutions;
2) Purpose. Why the resolution is needed or being adopted;
3) Scope and Intent. Who will be affected, the reach, range and extent
4) Specifications. A clear and complete statement on what those bound by the rule are expected to do.

So there you have it. Now you can speak like an HOA authority. CC&Rs aren’t just for acronymizing anymore.

Thanks to www.OrtenHindman.com BACK

Deconflicting the Directors
When homeowner association members are elected to the board, there is the possibility that, knowingly or unknowingly, a conflict of interest will develop. It is almost impossible to avoid them but how they are handled is critical. Conflicts of interest come in several sizes and blatancy. For example, hiring a personal friend to do HOA work has a small degree of conflict of interest. Accepting a "gratuity" for getting him the job is a blatant conflict of interest.

Board members sometimes get caught in self serving situations when there is a shortage of reserve funds to take care of things like painting or roofing. In those cases, some homes will get painted or roofed before others. If any of those homes belong to board members, there will always be suspicion that the board stacked the deck in its favor. This may or may not be true but the perception will be that it’s true.

In cases like these, the board should distance itself as much as possible by purposefully putting their homes somewhere down the list or to hire an outside consultant to recommend the priority list. Both techniques can be used effectively where limited resources dictate that some members will benefit over others.

Another technique for avoiding conflict of interest is for a director to abstain from voting when the outcome is self-benefitting. And it’s important that the secretary records in the meeting minutes that "(fill in name) abstained due to a conflict of interest". That way, the written record will show no intent to sway the vote.

Disclosure is another way of avoiding conflict of interest. The idea behind disclosure is that any possible conflict is brought to the attention of the Board. But beware. Technically, if you advise the Board that your brother in law, the HOA’s landscape contractor, is giving you massive kick backs to influence the contract, you’ve provided disclosure. If the rest of the Board wants in on the action and makes it known, they’ve also provided disclosure. No foul, right? Hardly.

Disclosure can smooth over minor conflicts of interest but if there are significant implications, the disclosure should be made to all members in writing for the record. And this may raise more questions than answers. Many conflicts of interest are best avoided altogether.

One of the best ways for the Board to avoid self dealing is to deal openly. Board meetings should be open to all members and minutes should be complete and quickly available. Frequent newsletters should advise of upcoming events. If the Board knows someone is watching, it’s less likely to engage in self serving activity.

Some homeowner association developers engage in blatant conflict of interest by failing to disclose HOA responsibilities clearly in marketing material or grossly underbudgeting the HOA operation to keep HOA fees low to attract buyers. This is done to maximize profit.

These strategies are based in a conflict of interest which often comes back to haunt the developer after turnover because of disgruntled buyers. The cure lies in getting outside consultants to draw governing documents and to build adequate budgets. Arranging HOA training for prospective Board members also demonstrates the developer’s good will and investment in the HOA’s future success.

All are capable of feathering their own nest even when unaware of doing it. The best policy is to avoid the perception of wrong doing. Ask yourself if what you’re doing could be misconstrued by outsiders. Trust is a fragile thing. Treat it like fine crystal. BACK

Speed Demons
Drivers who do not obey the speed limit within a homeowner association can be a deadly problem. Speed limits are designed to keep residents safe. Factors such as street location, street size and number of vehicles per day are all used to determine the safest speed vehicles should travel. The board has a duty to take reasonable measures to protect the residents. Here are some ways to address this issue.

1. Create a Traffic Safety Committee to research the speeding problem and provide solutions to reduce speeding.

2. Check with your city to find out if they have a speed awareness or speed reduction program.

3. Remind the members using your newsletter, website, bulletin boards and notices.

4. Place a speed radar unit on streets where there is a speeding concern. They display each passing driver's speed to remind them of the speeding issue. Some municipalities will provide this equipment free or for rent. You can purchase your own unit on the internet if you have an ongoing need and multiple locations to monitor. Some units come solar powered.

5. Use a radar tracking device. The Traffic Enforcement Committee can use a hand held radar unit and camera to monitor and record traffic speed and vehicle information. If they are residents or owners, send a letter informing them of the violation and request that they obey posted speed limits. If they are a non-owner, the information can be turned over to the police for further action or as evidence that more police speed monitoring is needed.

6. Make sure speed signs are posted and clearly visible. They can be purchased on the internet in a variety of sizes.

7. Use speed humps, traffic circles and traffic diverters. Your local municipality will have specifications and requirements for these speed reducers. You will need a permit to install them.

8. Contact HOA vendors who speed. Having the ability to cancel their contract for non-compliance is a heavy hammer.

9. If you have private streets and posted speed limits, fine repeat offender owners after written notice. If streets are public, ask the police to monitor areas of concern. If the won’t, use the radar option. It does work.

Speed demons in a homeowner association are an accident waiting to happen. Use these "pitchforks" to remind them that there will be hell to pay if they don’t change their evil ways. BACK

Pool & Playground Legal Check Up
With summer here, it’s time to make sure that your pools and playgrounds are legally ready for action. With the proliferation of lawsuits and regulations, there are sound reasons for doing a legal checkup.

Eliminate rules that discriminate against children or single them out for special treatment.
Make sure the rules designate hours open.
Make sure the rules are distributed to all owners and residents.
Review adequacy of signage. It does little good to establish pool or playground rules if they are not clearly posted.
Physically inspect gates, locks, and fences to ensure they are in proper working order.
Conduct an insurance inspection with your agent who can advise of ways to reduce the HOA’s liability exposure.
Review local and state ordinances and regulations. Most regulate pool fences and gates however, the type of fence, height, material etc. varies widely from jurisdiction to jurisdiction. County and state health departments impose regulations concerning chemicals and water purification which need to be adhered to and systematically recorded.
Review safety procedures and equipment. If your HOA employs lifeguards, review and verify their training.
If you utilize "pool monitors" be certain they receive training that covers pool rules, what authority they have to enforce those rules and safety procedures.
Review pool maintenance contract. In addition to the standard boilerplate language, the contract should also require the contractor to indemnify and hold harmless the HOA in the event of injury or damage resulting from the negligence of the contractor.
Review maintenance duties by performing walk throughs with regular contractors.
Comply with the requirements of the Americans with Disabilities Act (ADA) if you make your pool or playground available to the public.
The Virginia Graeme Baker Pool and Spa Safety Act was effective December 20, 2007. It applies to pools and spas and requires safety drain covers and suction entrapment prevention devices.
Suspension of privileges. Many governing documents and/or Collection Policies allow the HOA to suspend the privileges of a delinquent owner, including access to the pool and clubhouse. If you invoke this, make sure the specifics are detailed in the rules and policies.

by Debra J. Oppenheimer, Esq. of HindmanSanchez P.C. BACK

Chiropractical Amendments
A homeowner association’s (HOA) governing documents are the backbone of the organization. As chiropractors can demonstrate, adjusting the backbone can produce beneficial results. Adjusting or amending an HOA's documents impacts both legal and practical considerations. Since amending them is both time consuming and expensive, the reasons to do so should be compelling such as:

1. To delete or add use restrictions
2. To conform with federal or state law
3. To correct clerical errors, or
4. To eliminate a restriction in violation of the Fair Housing Act.

There are two ways to amend documents. The first is to amend individual provisions by editing, deletion or addition. The other way is to "amend and restate" the entire set of documents. Legally, "amended and restated" documents are simply an amendment to the existing documents. Practically speaking, they produce a new, organized and easier-to-read set of documents.

A restatement is a much more extensive, time-consuming and expensive project than a partial amendment. While not appropriate for every situation, an amendment and restatement should be considered if current governing documents have either been amended many times or that they are cumbersome or confusing. It’s also appropriate if the HOA is contemplating a substantial number of changes at one time.

Before beginning any amendment project, an important consideration is what level of vote is required to pass the amendment. Requirements are usually found in the governing documents themselves or may be governed by statute. If the amendment requires a high percentage of owner approval, it may be prudent to forego the amendment since the chances of passage are remote.

Here are some general recommendations:

1. Amend the Amendment Procedure. If your documents have difficult or onerous amendment procedures, consider "amending the amendment procedure" to ease future changes. Provisions that require a super majority (2/3rds or more of the membership) to approve make amending almost impossible. This restriction can produce catastrophic results if the board needs a super majority to set a reasonable budget to run the HOA. Consider a procedure that allows an amendment by a simple majority vote at a valid membership meeting.

2. Withhold Controversial Changes. If you are trying to pass several amendments simultaneously, withhold controversial amendments that may serve to defeat otherwise approvable changes. Present controversial changes individually at a later date so that you have the opportunity to adequately focus on the issues surrounding that amendment.

3. Retroactivity & Grandfathering. Amendments should not be retroactive, such as banning existing pets, and should provide for a "grandfather" provision which either permits existing violations or a reasonable time period for compliance. This is particularly important when it comes to imposing rental or pet restrictions.

4. Developer Language. Resist the temptation to amend simply to delete references to the original developer. These amendments serve little purpose.

5. Member Forum. Consider holding a special meeting to answer questions and address concerns regarding proposed amendments before they come up for vote. Educating the membership can go a long way in helping to get amendments adopted.

6. Use a Lawyer. Amending governing documents should be done only in consultation with an attorney knowledgeable in homeowner association law. Lawyers know things that the board does not and can make sure the process is done properly, including recording the documents at the right place and in the proper manner.

7. Don’t Amend at All. The governing documents often give the board the authority to enact policies that are "in keeping" with the governing documents. Sometimes the objective can be accomplished without amending the documents.

8. Use Plain English. User friendly documents are more likely to be read and understood. Legalese is not required.

Performing a therapeutic "adjustment" can streamline policies, rules and procedures and raise the level of compliance. Thoughtful amendments make for a kinder HOA. BACK

HOA Design Standards
In urban settings, homeowner associations have become a dominant form of construction. While HOA homeowners carry many rights and privileges, they often concede certain freedoms enjoyed in more traditional home ownership. One particular area of concession involves remodeling,

To control the look and feel of the community, many HOAs have material, color and design standards which must be adhered to. In common wall communities, structural integrity demands that changes made by one unit do not jeopardize the viability of the building. For these reasons, it is important for the board to keep the owners informed and reminded of material standards and violations. Here are a number of guidelines which can be included in a Design Policy as appropriate:

1. For aesthetic only projects (like painting, no structural or utility work involved), submit to the board for written approval prior to commencement of work a description of the work to be performed, who will do it and the anticipated schedule.

2. For more involved projects (includes structural, plumbing, electrical work, etc.) submit architectural plans, copy of permits and signed contractor agreements to the board for written approval which must be received prior to commencing work. If warranted, the board can seek the review and approval of an architect or engineer with related costs to be paid by owner.

3. If view is a consideration in your HOA, require disclosure of proposed structure height and whether removal of trees is involved for view purposes.

4. All power tool operation must be accomplished either in the unit or off property unless authorized by the board in writing and provided there is no unreasonable objection from the neighbors.

5. Contractors are permitted to work only from 9:00 a.m. to 5:00 p.m. Monday through Saturdays.

6. All demolition and construction material shall be disposed of off property, not in HOA dumpsters.

7. Contractor shall clean up any affected common area daily.

8. Owner will provide adequate parking for contractor. Contractor should not use guest parking or block fire lanes.

9. Common utility (electrical, water, gas, etc.) interruption must be approved and coordinated by the board.

10. If landscaping renovation is proposed and the HOA has a landscape standard, a comprehensive plan should be submitted showing proposed changes.

11. Establish specific standards (brand, model, color) for paint color, roofing material, storm doors, screen doors, awnings and other common add-ons.

Since the desire to remodel can happen anytime the spirit moves the remodeler, the board needs to be proactive in keeping owners informed of expectations. Publish the Design Policy on the HOA website and reference it in all newsletters and periodic email updates. Since remodeling will happen, make sure you do all possible to direct a model outcome. BACK

Fair Housing Act Requirements
The elderly population throughout the United States increased roughly 11-fold during the 1900s and it is anticipated that elderly growth rates will increase dramatically over the next 20 years as the Baby-Boom generation ages. Many of these individuals will seek "housing for older persons" as defined in the Fair Housing Act (FHA) and under State law. This article explains the key requirements for homeowner associations (HOAs) to maintain their status - and special legal privileges - as "housing for older persons" which is of greater importance as the population ages. Failure to comply with the FHA can result in civil fines, damages, attorney fees and litigation costs.

The FHA was passed to prohibit discrimination in the housing market on the basis of race, color, national origin, religion, sex, familial status or handicap. The FHA defines "familial status" as one or more persons under the age of 18 who are domiciled with a parent or legal guardian. In other words, the FHA prohibits discrimination in housing against people living with children.

However, perhaps contrary to common sense, the FHA not only permits but actually encourages age discrimination in certain situations. One of those situations concerns "housing for older persons" as defined by the Housing for Older Persons Act of 1995 (HOPA), an amendment to the FHA. Pursuant to its 1995 amendments, the FHA exempts housing for older persons from the prohibition against familial status discrimination in the following situations:

The Secretary for the U.S. Department of Housing and Urban Development (HUD) specifically determines that a particular community was designed for and operated to assist elderly persons under a Federal or State program;

The housing is occupied solely by people who are 62 years old or older; or

The housing has at least one person who is 55 years of age or more in at least 80% of the occupied units, and the housing has a strict policy demonstrating the intent to house persons who are 55 years old or older.

In order for this final provision to apply, three requirements must be met. First, the housing must meet the 80% occupancy requirements for those who are at least 55 years old. Next, the HOA must publish policies and procedures specifically evidencing the intent to maintain elderly housing. Third, the HOA must consistently follow those policies and procedures.

Under the Federal regulations, a number of factors and written materials are considered when deciding whether an HOA demonstrates the intent to operate as housing for people at least 55 years old. These factors include: how the HOA is described to prospective residents; the HOA's advertising materials; what is mentioned in lease agreements concerning its residential units; what the HOA's written rules and regulations state; whether there are public postings in common areas that describe the HOA as housing for persons 55 years old or more; and the actual practices of the HOA, including consistency in applying its rules and regulations. Simply being described as "adult living" or "adult community" is insufficient for compliance with the FHA.

As long as 80% of the units are occupied by at least one person who is 55 or older, then the HOA can, without violating the FHA or State law, make its own rules as to the occupancy of the remaining 20% of the units, which includes allowing children to live in those units. However, in these situations, the HOA must take greater steps to ensure compliance with the 80% requirement. These steps include taking surveys of the residents, as well as reviewing reliable governmental identification evidence, such as birth certificate, driver's license, military identification and passport. These surveys must be performed at least once every two years, and the records must be maintained for inspection.

The publishing and adherence of specific policies is also helpful for avoiding disagreements. Circumstances in which residents are uncertain of the rules can often lead to disagreements with the HOA, neighbors and even family members. Itnot uncommon for these disagreements to result in HUD or state agency involvement or litigation.

There are numerous examples of HOAs and residents ending up in litigation because elderly residents assist younger family members in contravention of the HOA's published policies. At times an HOA or its employees are tempted to turn a blind eye to these transgressions. In these situations, it is not uncommon for a neighbor to eventually complain about the situation, causing the HOA to choose between strict adherence to policy or leniency. By that time, if a pattern of lenient behavior has developed, the children or other younger family members and their elderly hosts may believe that they have a right to maintain their living arrangement. These beliefs are not easily given up, and can result in costly litigation between the parties.

The failure to adhere to a policy could also result in a loss of the "housing for older persons" exemption, which can then lead to discrimination complaints based upon "familial status." The Office of Fair Housing and Equal Opportunity (FHEO) investigates HUD complaints. If the FHEO determines that reasonable cause exists showing a discriminatory practice, it can issue a Charge of Discrimination that will result in a hearing before an HUD administrative judge or Federal court judge. This can result in equitable relief to rectify discriminatory actions, fines, damages, attorney fees and litigation costs, and Federal courts can also award punitive damages in extreme situations.

Publishing and consistently adhering to rules demonstrating the intent to operate as housing for older persons is crucial for HOAs to maintain their exemption from Federal and State laws prohibiting familial status discrimination.

By Anthony Rafel and Jason Harrington, Rafel Law Group PLLC BACK

Legal Baker’s Dozen
There are times when a homeowner association (HOA) board needs competent advice to make informed decisions. One key area of competency involves matters of law. Since lawyer fees are high, the board needs to be prudent about the reason for ringing them up. Some things to consider:

Business Judgment Rule. Directors are protected against personal liability by the Business Judgment Rule which states that they perform their duties in good faith, in a manner believed to be in the best interest of the HOA and with care that a prudent person would use.

Breach of Duties. As part of their reasonable inquiry or "due diligence", boards can seek the advice of legal counsel. Failure to seek advice on an important legal issue that results in damage to the HOA could serve as the basis for an action against the board for breach of their fiduciary duties.

That said, here are thirteen valid reasons to engage an attorney:

1. Amending Documents. Whenever the governing documents are revised, legal counsel should be involved in drafting and recording the changes.

2. Architectural Restrictions. Failure to enforce or arbitrary enforcement of architectural restrictions can lead to costly litigation. Whenever an architectural dispute arises, legal counsel should be called to assist in proper resolution.

3. Assessment Collection. Setting up proper collection policies and consistently following those policies is important to maintaining the HOA's finances and minimizing legal challenges.

4. Contracts. Agreements not reviewed by an attorney can have significant hidden liabilities.

5. Ethics. Whenever a director or committee member has a conflict of interest and refuses to recuse themselves, it is time to call legal counsel.

6. Injuries. Whether it be a slip and fall or another type of injury in the common area involving residents, guests, employees, vendors or otherwise, injuries should immediately be reported to insurance and to the HOA's attorney so conditions can be documented and steps taken to protect against further injury.

7. Lawsuit Threatened. In addition to putting the HOA's insurance carrier on notice of a potential claim, boards should talk to legal counsel about how best to respond to the threat to reduce the risk that a claim is actually filed, better position the HOA to defend itself in the event one is filed and take the matter into mediation if appropriate.

8. Lawsuit Served. Tendering a claim to the HOA's insurance carrier is the first order of business. Sending a copy of the complaint to the attorney is the second. General counsel needs to know of the litigation so he can protect the HOA's interest in the event insurance is slow to respond or declines coverage. In addition, the board may need guidance on how to respond to the plaintiff on issues outside of the litigated matter.

9. Personnel. The most common high-risk areas are when an employee is hired, disciplined or fired. Employment litigation tends to be expensive so it is best to avoid it.

10. Recall Petition. Emotions run high in recall elections and issues of defamation often arise. Failure to properly handle a recall can lead to significant problems.

11. Request for Reasonable Accommodation. Failure to properly evaluate and respond to a request for disability accommodation can result in costly litigation.

12. Rules & Regulations. The HOA's rules and regulations rules should be reviewed to make sure proper fine and hearing procedures have been established and to ensure they are enforceable and not discriminatory, such as rules against children or restrictions on who may use pools, etc. If enforcement issues are more than routine because of the particular individuals involved or because the issues may be more complex than normal such as with architectural issues, then legal counsel should be consulted before matters deteriorate into litigation.

13. Vendor Disputes. Disputes between the HOA and its vendors can lead to litigation. Legal counsel needs to analyze appropriate contract provisions, evaluate the alleged breach and advise the board on how best to resolve the dispute.

By Adams Kessler PLC BACK