Most Common Reasons Board Members are Sued

Association Boards sometimes find themselves in legal trouble for many reasons. After reviewing facts in previous suits, claims filed against directors and officers can often be avoided.

One top reason Board members are sued is because owner’s don’t always read governing documents when purchasing property within an association. This leads to misunderstandings, and factors into poor decision making. When purchasing a property in a community, all owners need to read the governing documents. If an owner seeks a Board position, the candidate must revisit the governing documents for a refresher. Encourage all owners, new and established, to read governing documents and understand their responsibilities. Board members need to understand their role and the specific boundaries stated in the governing documents, as well. Poor and uniformed decisions or decisions outside ones authority can potentially cause a claim situation. Boards must consider adopting a transition process for new Board members that includes sharing and reviewing governing documents. This will help reduce the association’s exposure to lawsuits.

A second reason Boards find themselves entangled in a suit is because members do not understand their roles and responsibilities. When a Board member finishes a Board meeting, they become an owner again. They no longer wear the Board member hat or have Board member authority. Board members may find themselves in trouble when overstepping this boundary. A Board member’s responsibilities include following and enforcing an association’s governing documents, and ensuring an association runs smoothly.

When Board members understand their boundaries and roles, an association will reduce their liability risk and possibly avoid costly lawsuits. Consider joining an organization such as CAI, Community Association Institute (http://www.caioregon.org/). Trade associations like CAI are vital educational agencies for communities. They provide resources, educational programs, and access to other community association specialists. These industry experts can help foster economic and financial stability within our community associations.