Many people are active in their condominium or home owners’ association, serving as directors, officers, and editors of association newsletters. If you are an active member of your association, consider the following risk management tips and recommendations.
- Verify that the association has directors and officers (D&O) coverage in force with reasonably high limits. If the association refuses or chooses not to obtain D&O coverage, seriously reconsider your leadership activities within the group due to your unprotected liability exposure.
- If D&O coverage is in place, verify that this policy provides errors and omissions coverage for the proper purchase of insurance. To do this, verify that the “failure to maintain insurance” exclusion is not attached to the D&O policy. Read more…
It’s a disturbing trend and one that isn’t tracked by any government agency. But according to at least one nonprofit research group, association boards are initiating more foreclosures than previously. According to a Houston-based nonprofit research study, association-initiated foreclosures jumped from 500 in 1995 to 2,200 in 2007.
Association boards have found themselves unwilling enforcers of properties and unpaid bills. That’s in part due to the fact that of the 300,000 homeowner’s associations in the country, over 50 percent of them face serious financial problems. So says a September 2010 survey by the Community Association Institute.
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If you manage an older apartment or condominium complex, you’ve either had to or will have to deal with lead. Many buildings from pre-1978 have had to undergo removal of lead-based paint products in order to comply with federal guidelines protecting residents and their children from unnecessary lead exposure. If your building hasn’t had all lead-based paint removed, this posting is for you.
October 1, 2010 came quietly enough, but many associations and their maintenance staff may now be facing increased scrutiny from the Environmental Protection Agency. That’s because the EPA is now enforcing its lead-based paint Renovation, Repair and Painting rule. Lead paint is relatively harmless until it is disturbed. Through cutting, sanding, demolition, and other common maintenance procedures, the paint is turned to dust which is easily inhaled by adults, children, and pets. Ultimately, you are responsible for hiring a contractor that performs their duties in a way which will keep your unit owners/tenants safe during this work. By closing off the work area and completing the work carefully, contracts can minimize the danger posed. In addition to hired contractors, if you employ any maintenance workers who complete work on older buildings where lead based paint may be found, you should send your employee to a training class to stay in agreement with the law. Read more…
Want to find yourself on the wrong end of a discrimination suit? Just ban children from playing on your association’s grounds.
That’s how a Boston-based condominium association found itself paying out a $150,000 in fines for discriminating against families with children. The settlement has the association paying $130,000 to the families in question and $20,000 in civil penalties. This lawsuit and the subsequent fallout gives us a prime example of an association over-stepping it’s bounds. In addition to restricting the ability of children to play outside, the association was accused of intimidating, threatening, and interfering with the rights afforded to it’s residents under the Fair Housing Act. This entire situation goes to show how difficult it can be at times for an association board to manage the needs and desires of all residents.
This is not the first case where an association has found itself on the wrong end of a discrimination suit. Other substantial instances involve associations in Indiana, Atlanta, Florida, and Washington. Regardless of guilt or if the discrimination was intentional or simply a bi-product of an otherwise harmless determination by the board, these situations can be costly to defend and extremely costly should you be found guilty.
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Foul odors emanating from bathtub and sink drains, toilets refusing to flush properly, water backups discovered in building basements or first-floor units. These are just some of the horrors condominium and apartment associations deal with when sewer pipes and drains back up.
It’s no isolated issue, and it causes significant health risks, cleanup costs, and ongoing maintenance. Sewers without proper traps can cause severe allergic attacks or potentially fatal consequences to residents. Broken pipes can cause raw sewage to empty into buildings. As a result, nasty stenches can reduce property values and associations that can’t seem to locate the cause and apply the right remedy can find themselves part of expensive claims.
Interestingly a recent lawsuit in California for damage to the interior of a unit from common area pluming found the Condominium Association liable. Read more…
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