Liability
Legal responsibility for damages, injuries, or losses. An association can face liability for negligent maintenance of common areas, failure to enforce safety standards, discriminatory practices, or breach of fiduciary duty. Board members may face personal liability if they act outside their authority, engage in self-dealing, or are grossly negligent. Proper insurance and adherence to governing documents help mitigate liability risk.
Example in Context
The association faced liability for the homeowner's injury after the court found that the board had known about the broken handrail in the stairwell for months but failed to repair it.
Frequently Asked Questions
Can HOA board members be held personally liable?
Generally, board members are protected from personal liability for good-faith decisions by the business judgment rule and D&O insurance. However, they can be held personally liable for actions taken outside their authority, self-dealing, fraud, or gross negligence. Maintaining adequate D&O insurance and following proper procedures are the best protections.