, CMCA, AMS, is a community manager learning specialist with Associa’s Learning and Development Team. With more than 16 years of experience as a portfolio community manager, 10 of those years involved working with high-risk or lawsuit-engaged communities, helping navigate and turn around liabilities with successful outcomes.
Community Association Board Members
Mar 10, 2025
Legal Responsibilities and Liabilities. This article first appeared in The Communicator Magazine, Winter 2025 Issue.
WHETHER YOU LIVE in a quiet suburban neighborhood, condo, coop, master, sub, or other type of planned community association, you likely have a board of well-intentioned volunteers dedicated to maintaining the charm and harmony of their shared slice of home. However, when what seems like a minor decision about a violation or property boundary ends up leading to a lawsuit, it becomes clear that the board has unknowingly overstepped their legal authority.
This scenario is not uncommon. Across the country, community association boards face significant legal challenges, often stemming from misunderstandings or misapplications of the law or their responsibilities. These legal missteps can lead to costly consequences for both the board members and the communities they serve, highlighting the critical importance of understanding the legal responsibilities and possible liabilities within which these boards must operate.
Community Associations are tasked with maintaining order while enhancing the quality of life within each community. Governed by elected volunteer board members, they manage common areas or amenities, enforce community rules, and oversee financial matters. This authority comes with a large legal responsibility and liabilities. Understanding obligations is an essential part of being an effective board member; to fulfil duties, while also protecting against risk.
- Rule Enforcement: Boards must ensure a balancing act when enforcing community covenants, conditions, and restrictions (CC&Rs). While ultimately the goal is compliance with regulations for property maintenance, boards must also ensure fair and consistent enforcement of architectural guidelines and other rules.
- Financial Management: While overseeing association finances, which include budgeting, collecting assessments, paying bills, and maintaining records, boards must act as fiduciaries to carefully and transparently safeguard association funds, while also meeting their financial obligations.
- Maintenance and Repairs: Maintaining common areas and amenities involves ensuring regular upkeep, repair, and timely renovations to preserve appearance and functionality, while also balancing day-to-day operations.
- Dispute Resolution: Boards may at times need to address grievances, or even mediate disputes among residents. Fair and impartial conflict resolution is crucial for maintaining peace and harmony within the community.
- Legal Compliance: Compliance with federal, state, local laws, and individual governing documents is paramount. It is important that boards understand their requirements and seek appropriate legal counsel when needed.
Serving on a community association board could expose liabilities if board members are not properly and carefully performing their duties. Some of the risks involve:
- Breach of Fiduciary Duty: Board members have a requirement to act in the best interest of the community. Breaches of this duty, such as self-serving interests, conflicts of interest, and mismanagement of funds can bring legal action against the association or individual board members.
- Discrimination Claims: Engaging in discriminatory practices that would be prohibited by fair housing laws based on things like race, color, religion, national origin, sex, disability, or familial status could result in legal action or lawsuits and damage the community’s reputation in the process.
- Negligent Maintenance: Inadequate maintenance of common areas can pose safety hazards or liability for property damage and injuries suffered by residents or visitors. The board should make efforts to minimize hazards and risk, prioritize maintenance, and promptly address reported maintenance issues.
- Failure to Enforce Rules Consistently: Efforts should be made by all board members to standardize and ensure fair and consistent practices for violations. Inconsistencies in enforcement of community rules can undermine the association’s authority and lead to accusations of selective enforcement, discrimination, or harassment. Board members should create policies and procedures to apply rules uniformly and fairly to all residents to avoid this legal challenge.
- Mismanagement of Finances: Mishandling of association funds comes in different forms, such as embezzlement, misappropriation, or failure to maintain adequate reserves. The results can mean financial instability for the association, which could result in its inability to comply with the requirements of the governing documents. Legal consequences could be sought against board members, so transparency in financial practices and independent audits are crucial backup to help prevent such issues.
To best protect the association and its board members, proactive measures should be taken to mitigate risk.
- Education: Board members should receive training in their legal responsibilities, including fiduciary duties, fair housing laws, and governance practices.
- Protection: Boards should trust their industry experts for things like insurance to understand, identify, and obtain the appropriate coverage, including general liability insurance, directors and officers, and property insurance at a minimum. These policies can provide protection against some liabilities and legal expenses.
- Listen to the Experts: When in doubt, seek guidance from experienced legal professionals specializing in community association law. Attorneys can provide valuable advice on contractual matters, dispute resolution, compliance issues, and other litigation avoidance or defense strategies.
- Put it in Writing: Boards should have clear policies and procedures for governing their operations, decision-making processes, rules enforcement, and financial management. Adhering to these standardized protocols and processes consistently, while sharing them transparently with the members, can help hold everyone accountable with the association.
- Spread the Word: Transparency goes further to build and foster trust and cooperation throughout the community and can help to reduce the likelihood of disputes or misunderstandings. Boards can utilize newsletters, websites, or other digital platforms to inform residents about policies, initiatives, and decisions at community meetings.
Community association board members shoulder a significant legal responsibility. If they put in the effort to build their understanding of their complex duties, adhere to best practices, and seek professional guidance when needed, they can effectively fulfill their roles and protect the interests of the community. This will allow them to reach their goal of promoting harmony, stability, and prosperity within their neighborhood while also minimizing legal exposure.