RealManage Insight

HOA Volunteer Standard of Care: 5 Layers of Immunity to Litigation

by Stacy Titleman on Jun 10, 2021 9:40:00 PM

While being an HOA board director is a fulfilling responsibility, it comes with downsides. Among those is a vulnerability to lawsuits.

Homeowners are allowed to sue their homeowners association if they fail to perform their duties and obligations under the community governing documents, or if they violate local or federal laws. For example, if the HOA fails to maintain the common areas, then a homeowner may be able to sue them under a breach of contract theory. (Legal Match)

Fortunately, there are layers of immunity you can put into place to lower the risk of litigation for those serving as volunteer HOA board members. 

HOA Volunteer Standard of Care: 5 Layers of Immunity to Litigation 

Most of these layers are related to maintaining a high standard of care for your community.

The Volunteer Protection Act of 1997

In the 1990s, the Volunteer Protection Act (VPA) was passed to protect volunteers in general. However, its provisions do cover HOA volunteer positions, and as federal law, it carries the greatest weight.

Though there is quite a bit of nuance to the law, the VPA protects uncompensated, properly licensed/certified/authorized volunteers of non-profits from being liable for damages resulting from their unintentional acts of ordinary negligence while performing activities that fall within the scope of their duties as volunteers. It does not, however, protect against criminal acts, intentional misconduct, or acts of gross negligence.

Therefore, if your HOA members are properly authorized and not committing crimes or being negligent, the VPA will provide a broad layer of immunity to litigation.

State Laws Protecting Volunteer HOA Directors

Every state in the U.S. has statutes protecting volunteers from litigation. These add to the foundation of federal protection provided by the VPA.

  • Some state statutes offer conditional legal immunity or protections specifically to HOA board members.
  • States may offer protections that reference the HOA's governing documents or the HOA's liability insurance.

Because every state is different, it's vital that volunteer HOA directors familiarize themselves with their state's applicable legal protections and how they fit in with other layers of legal protection afforded them.

Bringing the HOA's lawyer in to help could prove helpful in understanding the full scope of this layer of immunity.

Protections Within the HOA's Governing Documents

In some states, the HOA governing documents can include additional legal protections to their directors over and above those provided at the federal and state levels. HOA board members should familiarize themselves with the relevant section of their governing documents, where applicable, as they may offer additional relief.

Protections Within an HOA's Individual Insurance Policy

In addition to federal and state protections, an HOA's individual insurance policy can provide yet another important layer of protection from litigation.

The HOA's general liability insurance, along with any policies directors and officers may have purchased individually, can provide individual board members with substantial protection against damages arising from lawsuits.

However, it's important to look at each policy for the specific language governing the following variations:

  • The amount of protection
  • The scope of the coverage
  • The complete list of conditions and exclusions

It's also critical to check for any connections the individual insurance policies may have to your state law. 

Personal Litigation Umbrella Insurance

As an HOA volunteer, the prospect of spending your own money to protect yourself against the potential repercussions of your actions can be unsettling.

However, the reality is that even after all the layers of protection above have been taken into account, there may still be gaps through which a well-trained lawyer hired to represent a disgruntled member may find a loophole.

In that case, it's worth considering a reasonably priced personal umbrella policy or rider to ensure safety.

The Standard of Care

As we emphasized at the outset, all of these protections hinge on one foundational assumption: that you are providing a high-quality standard of care for the members of your community.

  • Fulfilling your role within the HOA
  • Holding too high standards
  • Not committing crimes

In order to qualify for protection from litigation or damages by the various sources outlined above, you must be meeting the standard of care expected of you in your role within the HOA.

That includes

  • Making reasonably well-informed decisions
  • Acting on behalf of the interests of the HOA rather than for personal gain
  • Not being grossly negligent of your fiduciary duties as a director
  • Not engaging in any activity that requires a license, certification, or authorization that you do not possess
  • Not partaking in any willful or criminal misconduct

The Bottom Line

Understandably, volunteer HOA board directors want to avoid lawsuits. However, to minimize your exposure, it's important to do the work of familiarizing yourself with each level of immunity or protection afforded by the many applicable sources that address volunteers in general and HOA board directors in particular.

RealManage Can Help

At RealManage, we offer helpful solutions to real community problems.

For more information, please contact us today!

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