Homeowners associations are governed by a private board, generally comprised of residents of the condominium. Just because board members are unpaid volunteers, however, does not exempt them from exposure to lawsuits. Indeed, HOA board members are held to the same standard as their for-profit corporate counterparts where the law is concerned.
According to the Community Associations Institute (CAI), 54.6 million people lived in private associations in 2005—up from just 9.6 million 25 years ago. With so many residents, lawsuits are an inevitability. A homeowners association's exposure could range from mismanagement of funds by a board of directors or a board member, to slip-and-fall lawsuits for negligent sidewalk maintenance during an ice storm, to disputes with contractors, employees and residents.
What kinds of legal actions are the most common in New Jersey? How can homeowners associations lessen their risk of exposure? What steps can be taken to redress small problems before mountains are made of proverbial molehills? And are lawsuits as ubiquitous as they seem? The following may shed light on these questions and more.
It's the Money, Stupid
If there's one thread that joins the disparate types of lawsuits seen in the state involving homeowners associations, it's green in color.
"It's always about money," says Karim Kaspar, an attorney with the Law Offices of Lowenstein Sandler in Roseland.