Showing posts with label duty. Show all posts
Showing posts with label duty. Show all posts

Tuesday, August 3, 2010

Civil Rights and Nuisance Claims Result in Massive Judgments Against Homeowners Association

In June, a Boston jury awarded Scott J. Hyman and Donald and Julie Prescott judgments with a combined value of over $2.5 million against their homeowners association. The owners' successful legal claims were based on nuisance and infringement of civil rights. This case serves as a reminder of the robust legal remedies (including those contained in the Civil Rights Act and the Fair Housing Act) available to address misconduct by and in community associations.

Mr. Hyman, who is Jewish, was told by members of the homeowners association’s board of directors that his kind was not welcome in the community. He was denied the right to vote on association matters. Someone smeared excrement over his living room. Shortly after an association member mentioned that “someone is going to burn him out”, Mr. Hyman's primary residence (located elsewhere) was destroyed by fire. The Prescotts stood up for him and were similarly victimized. Mr. Hyman and the Prescotts had swastikas painted on their garages and were photographed hundreds of times. This pattern of harassment persisted for two years.

Condominium and homeowners association boards can subject their associations and their members to civil liability through both action and inaction. Boards should be careful to avoid taking actions that are inconsistent with applicable statutes, their association's governing documents, or a legal duty owed to another person. Boards should also give due consideration to owner complaints and known information and take action when they have a legal duty to do so. The association’s attorney can help the board evaluate how to respond to problems as they arise.

Friday, February 19, 2010

When Homeowners Associations Attack

"HOA Sues Former Board for $70 Million" is a headline that gets your attention. An Illinois homeowners association recently filed such a lawsuit against its former developer-controlled board (among others), claiming that past board members misused common funds and mismanaged the association's financial affairs. One portion of the lawsuit alleges that board members engaged in self-dealing by using their own or related companies to perform work for the association rather than competitively bidding the work. Another portion of the complaint contends that the association has insufficient reserve funds because dues were kept too low. It remains to be seen how this lawsuit will end.

Board members must always remember that they are obligated to exercise reasonable care in making decisions and must never use their positions to obtain personal benefits. Conducting a thorough investigation, complying with the governing documents and applicable state law, and seeking professional advice when appropriate are three ways that board members can ensure that their decisions are beyond reproach. The guiding principle is always the good of the community.