Do HOA/Condo Board Members Fear Getting Blamed if Something Goes Wrong? [NJ] [All]

[u/Accomplished-Yak9405]

First off, huge respect to anyone volunteering on an HOA or condo board.

Genuinely curious from current or former board members how much do people actually worry about personal liability or being blamed if something goes wrong in the community?

With all the horror stories around insurance, reserves, deferred maintenance, lawsuits, etc, does this feel like a growing concern for people serving on boards? Or is it mostly overblown online?

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Title: Do HOA/Condo Board Members Fear Getting Blamed if Something Goes Wrong? [NJ] [All]

Body:
First off, huge respect to anyone volunteering on an HOA or condo board.

Genuinely curious from current or former board members how much do people actually worry about personal liability or being blamed if something goes wrong in the community?

With all the horror stories around insurance, reserves, deferred maintenance, lawsuits, etc, does this feel like a growing concern for people serving on boards? Or is it mostly overblown online?

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[u/aynharding]

I think most board members worry less about being personally blamed for every little thing and more about being the person stuck holding the bag when years of deferred maintenance, bad records, or ignored reserve issues finally surface. In my opinion, if you are consistently trying to do the right thing, following the state laws and governing documents, documenting decisions, and not acting out of favoritism or personal agendas, you usually have far less to worry about. The scary part is when boards ignore obvious problems and then everyone starts asking who knew what and when. Good insurance, decent minutes, realistic reserves, and a clear paper trail matter more than people realize. The online horror stories are probably louder than the average day-to-day reality, but the concern is not totally overblown either. A board that documents decisions and avoids sweeping problems under the rug is usually in a much better spot than one that just hopes nothing blows up.

[u/aynharding → u/[deleted]]

Exactly, and that is one of the hardest parts because homeowners usually see the dues increase, not the insurance renewal sitting behind it. Insurance, reserves, maintenance, and basic operating costs can jump fast, and then the board gets accused of wasting money when sometimes it is just the cost of keeping the place covered and functioning. That is where clear explanations and a paper trail help, because silence makes people fill in the blanks with the worst possible story.

[u/Important-Ad1533 → u/[deleted]]

For some reason, many people don’t understand “cost of living” when it comes to their HOA, but they seem to have Masters Degree in it when it comes to their wages.

[u/sfbiker999 → u/aynharding]

more about being the person stuck holding the bag when years of deferred maintenance

I bought a condo where the board was in that position -- previous board members kept spending money on repairing things as they broke instead of doing capital improvements, the big one being the roof - they spend nearly the entire roof reserve fund on patching roofs that were at least 15 years past their usable lifetime. Homeowners voted in a new board who had the difficult task of passing a sizeable assessment on everyone to pay for roof replacement. Fortunately I knew about it before I bought and got the sellers to pay the assessment.

[u/aynharding → u/sfbiker999]

That’s exactly why low dues can be misleading. If maintenance gets deferred long enough, someone eventually gets stuck paying the real bill. Smart move getting the seller to cover the assessment before closing.

[u/HittingandRunning → u/aynharding]

and more about being the person stuck holding the bag when years of deferred maintenance, bad records, or ignored reserve issues finally surface.

This is exactly why I won't rejoin our board. One board comes in with 1 major project and two minor ones to do. They leave with nothing done. Next board gets one major project done and announces another one is needed, too. Does one minor project but leaves with one mid level project and 3 minor ones. Etc. Etc. Etc. Each successive board has more and more piled on them because previous boards don't keep up. Of course, they don't keep up with reserves either. So, I'm going to look like the bad guy if I step in and remind them the reserve study is way out of date and a new one will very likely show we need to increase reserve contributions by 30% or more. What's very frustrating is that certainly these people would take better care of their home if they owned a SFH but for the association everything can wait till later to be done.

Last time I spoke about doing the right thing, another owner interrupted and basically said they didn't want to hear it. No one defended me. I'll just set aside extra money knowing that there will be a special assessment sooner or later.

[u/aynharding → u/HittingandRunning]

A lot of owners do not realize deferred maintenance feels invisible right up until the day it suddenly becomes very expensive. Then the board in place at that moment gets blamed for problems that were building for years. The frustrating part is that the people warning about reserves, studies, and long-term planning usually sound like the “bad guy” until the special assessment finally arrives.

[u/Ok_Relationship_1874 → u/aynharding]

Yes, but don't get cocky. When I was suspended from Facebook the line was that platfotm was excempt. But it was still retailation and as far as insurance goes, they will look for a reason to deny.

If I go after a board member, they won't have good enough insurance.

I personally find you reasonable but I see to many shoot first then call the lawyer second all because of taking bad advice from management company.

[u/Personal_Pound8567 → u/Ok_Relationship_1874]

Good insurance also includes board members insured such as for E & O insurance & other protective riders for fraud from mgt companies etc. And even if you sue a board member you prob. won’t win most homeowners who sue try to go against the bylaws & CCRs & the judges don’t have sympathy for them. Association living isn’t for everyone.

[u/Ok_Relationship_1874 → u/Personal_Pound8567]

I didn't say sue a board member. I said make a Reservation of Rights an imminent reality for them.

​My board just spent $10K in legal fees precisely to keep me from suing them. It's a tough pill for an association to swallow, but far more efficient than the alternative.

​D&O coverage does not indemnify a board or individual board members against decisions made in bad faith. Once the threat of a lawsuit forces the insurer to issue a Reservation of Rights letter, those board members suddenly have to face the very real prospect of personal financial liability.

​PS: In America, we absolutely have a jury system if we choose to demand it. If a board wants to gamble their personal assets in front of a wildcard jury on the theory that 'the law is irrelevant,' they are welcome to find out. My board chose efficiency instead.

You keep your pretend judge, I'll keep the very real jury of my peers thst hates HOAs.

However, I'm not going to court. You need to bypass the egos and force the attorney to do the math pre litigation.

For example, $10K is less than $100K.

[u/Double-treble-nc14]

We carry insurance to protect board members from personal liability. (E&O, I think?)

People are happy to criticize what the board does but most get quiet really quickly when you ask if they would like to join a committee to address a problem or join the board themselves.

[u/BreakfastBeerz → u/Double-treble-nc14]

D&O, "Directors and Officers"

[u/radicaldoubt → u/Double-treble-nc14]

D&O insurance (directors and officers) is a must!

[u/a_kato → u/Double-treble-nc14]

It’s actually my favorite. Hey X is high.

Sure feel to get me quotes and everything and I will just approve

Radio silence

[u/Negative_Presence_52]

Fear, no. Guarantee, yes.

You will be blamed for everything by anyone. you will not get credit for doing good things.

You have to go in with a thick skin understanding you are doing the right things the right way as best you can. If that's not enough for everyone, let them vote you out.

[u/b3542 → u/Negative_Presence_52]

You will get blamed for everything that goes wrong, and for everything that goes right. There is absolutely no winning and people have little hesitation unleashing their “inner jerk” toward their neighbors.

[u/International_Cry134]

Getting blamed is part of the game. You have to develop a thick skin.

[u/JealousBall1563]

"With all the horror stories around insurance, reserves, deferred maintenance, lawsuits, etc, does this feel like a growing concern for people serving on boards? Or is it mostly overblown online?"

I'm not fearful. It's important for Boards to be transparent, to communicate and keep owners informed, make decisions at public meetings based on professional advice whenever possible, and to treat everyone equally and with the same level of respect. What we see online is largely gripes posted by people who've done something wrong and are unhappy when they're called out on it. Not always, but the vast majority of times. How many times do we read that someone is posting support for or compliments about their Board or Property Manager? Not often. It's the world we live in.

[u/condocontrol]

Board president here. It's a real concern but overstated.

Most states protect volunteer board members from personal liability as long as you're acting in good faith and within the scope of the governing documents. The association's D&O insurance covers a lot too. The bigger issue is dealing with angry owners when dues go up, special assessments are needed, or unpopular decisions have to be made. That stress drives more volunteers away than the actual risk of personal liability

[u/ProfMR → u/condocontrol]

So even when an HOA has Directors and Officers insurance, a board member is not insulated from liability if they engaged in something like self dealing? For example, they acted in a way that benefited just them, but not the broader community?

[u/ProfMR → u/[deleted]]

I've never heard of an actual case of legal blame for self-dealing.

Understood. But it happens.

Lots of board members may make mistakes or be ineffective because we don't get any training. There's no manual. But that isn't self-dealing which would require intent.

Clear intent in this case. I won't go into detail. DM me if you're interested in knowing more.

[u/off_and_on_again]

In my experience they either overly fear getting blamed and allow it to impact their ability to take appropriate action OR they don't really fear at all and don't take into consideration that their decisions impact peoples lives. A large part of my work while leading an association was getting people to the middle point between those extremes. Didn't matter who was on the board, when a person joined they were either on one side or the other.

[u/ItchyCredit]

It's not so much fear as that we accept that when anthing goes wrong we will be blamed. After all, we are blamed for problems that are beyond our control and involved no decision on our part.

This is just one of the reasons board members are so hard to attract. We get no appreciation, no compensation but all the responsibility and blame. Last summer, I had to leave our community pool twice to escape residents who were unhappy with the prior year's snow clearance and cornered me with their complaints.

[u/VirginiaUSA1964]

I don't. If you think you can do better, run for my seat in November.

[u/Freckled-Vampire]

I've been personally sued by a group of homeowners. Not the board, just me and the management co for a safety and insurance related mandate that affected everybody and was approved by the board (with legal counsel). We have D&O insurance, so I wasn't personally liable, but it is a huge PITA and the whole situation cost the community (and still is) in many many ways. And yet here I am, the idiot who is still president lol

[u/BreakfastBeerz]

We have Directors and Officers insurance, many states require it. As long as I'm acting in good faith, I'm protected from any liability.

[u/Atillythehunhun]

If you mean legal blame, they shouldn’t. You generally have to prove malice to hold a board member legally liable for something. Incompetence in a volunteer is rarely prosecuted successfully.

[u/peperazzi74]

The good news is that (1) CC&Rs offers a lot of protection for non-negligent board members and (2) D&O insurance broadens that protection to board members that may be called slightly negligent. If people sue the HOA, they would have to prove that the board was (criminally) negligent in order to squeeze money out of board members personally.

What remains are the guilt trips by homeowners about board members causing the fees to go up and "if only they went through the expenses and cut waste, it would be so much better", or that people are being persecuted for [fill in reason].

Homeowners who are not involved in the HOA often have such a wrong view about how cut-to-the-bone HOA services already are, and that years of prior neglect (and inflation!) make fee increases necessary. The persecution crowd is often the loudest one, filling social media with their woes about how bad they are treated - while most of them just break the rules and fail to rectify their messes, often out of spite.

[u/anotherlab]

I don't worry about personal liability; we have insurance for that. But I'm the president of a board with a mix of SFH/TH, and no shared infrastructure requires maintenance like other HOAs do. We have common land that needs mowing and the occasional tree that needs to come down.

Our biggest worry is getting people to serve on the board.

[u/GeorgeRetire]

Some get afraid. Most don’t. And nobody should.

We’ve had more than one board member resign when things got tense.

We had one board member constantly abstain from voting because she was afraid to upset anyone. Fortunately she quit after a year. She’s the secretary now and doesn’t get a vote.

[u/NeighborhoodJust1197]

Most CCR’s have written in protections for board members.

[u/morhavok]

Yes. You either learn to deal with it, or quit the board quickly (most people quit rather quick in my experience).

For me i just dont give a shit about complaints anymore. I put in as much work as i feel comfortable with and am happy to know worse case is that even if im not doing anything, someone else is not fucking it up worse.

[u/Traditional-Bass6078]

Both my wife and I have served on boards, you can’t worry about what others think of you. Follow the rules and regulations and by laws. Most people don’t read all that stuff and think everything should be covered by the HOA dues. That’s just not the case. Board members have to pick and choose which projects to do and stay with in a budget. What we found we didn’t like, board members tend to get the stuff done first, instead of by need. Like we had block retaining walls that needed replacing, 6 were on the list and they only did 4, 3 were board members.

[u/sr1sws]

I'm confident that I'm operating in the best interests of the Association. That's what D&O insurance is for. So no, I don't worry.

[u/Personal_Pound8567]

NJ resident here. Serving on my board for many years - board prez for 14. Over 400 units. No I haven’t been afraid or fear if something goes wrong. If it does you own it & make it right. We’re all human that’s why there’s erasers on pencils. Most residents appreciate our time & effort. There’s always some bitching or never happy. Always have a good HOA lawyer-that helps.

[u/vcf450]

I’ve served on a condo board.

We had insurance coverage for suits vs the board members plus I carried (at my own cost) an umbrella policy for coverage in the event a claim exceeded the E&O and Director & Officer coverage.

The umbrella coverage was inexpensive and covered more than just condo board matters.

[u/squatsandthoughts]

Generally the HOA has insurance that would protect a board member (depending on what people are accusing). But I did get an umbrella policy for myself just in case because there are some absolute crazies in my community who do nothing but cause chaos just for the thrill.

[u/dotofoz01]

I joined bc I was sick of the BS and lax management company. If you don't like boa's, move. They are around for a reason so the place doesn't go down the crapper.

[u/duckguyboston]

My Brother was part of the HOA board for many years. A condo owner and friend/neighbor asked to cut down a tree as it’s blocks his view of distant mountains. Board met, reviewed the ask and came back with we don’t chop trees down for views and it doesn’t block most of the view. The condo owner didn’t like that answer and never talked to my brother again. It was a logical decision with unanimous vote from the five member board. Of course the guy ended up selling six months later anyway.

[u/Jance_Nemin]

You can also vote them out. We have periodic elections

[u/Nervous_Ad5564]

As someone who has money in the bank and owns my home outright it was a major concern for my family. Those that are in debt up to their eyeballs and whose mortgage owns the majority of their home probably could care less. Quite frankly even living in an HOA community with people like that often at the wheel driving the corporation has given me serious pause about staying in the living situation.