Homeowner associations (HOAs) can be great, especially since homeowners
have less to think about. When someone buys a
condo or townhome with an HOA, they don’t have to worry about caring for
their lawn, keeping the gym equipment maintained, or replacing the roof,
nor do they have to worry about painting the outside of the building,
or taking care of the pool. After all, buying a property with an HOA is
all about convenience and
While HOAs are run by a private board, which is usually made up of residents
who live in the condominium complex, and who volunteer their time, it
doesn’t mean the HOA is free of lawsuits.
Indeed, HOA board members may be unpaid volunteers, but they are still
held to the same standard as employees who work at a for-profit company
as far as the law is concerned. What types of HOA legal actions are common
in Chicago? Read on as we shed light on the subject.
It’s All About the Money
If you ask business law attorneys who represent HOAs, they’ll tell
you it’s “all about the money.” Probably the most common
type of lawsuit filed against HOAs is the “slip and fall”
personal injury lawsuit, which is based on the theory of negligence.
For example, if ice is not removed promptly from the steps and a resident
slips and breaks their wrist or their hip – they have an automatic
lawsuit. In these premises liability/slip and fall cases, the board usually
contacts their insurance company, who assigns an attorney to the case.
Even when a personal injury claim is paid by the liability insurance, the
claim can still make the rates increase significantly, putting more of
a strain on the HOA's funds.
Large condominiums can have numerous employees, which increases the chances
of a lawsuit. Employees must be hired and fired, which opens HOAs up to
employment law and civil rights violations. If an employee sexually harasses
a co-worker or a resident on the property, the HOA can face a sexual harassment
or sexual abuse lawsuit.
If an employee is injured on the job, they will most likely file a workers’
compensation claim. Since HOAs have employees, they carry workers’
HOAs and Contractor Disputes
Aside from employee lawsuits and workers’ compensation claims, HOAs
often have issues with contractors. It’s not uncommon for a contractor
to have a dispute with a board, or for the board to have a dispute with
a contractor, and for the problem to escalate to litigation.
Building defects is another issue. For example, a homeowner association
may discover that a contractor installed a defective HVAC system, but
the contractor can countersue, arguing that the problem was inadequate
maintenance, not the system itself.
There are also internal conflicts that involve neighbor-to-neighbor disputes,
or a resident against the board. For instance, a resident may think like
a tenant and when they have a dispute, they quit paying their HOA dues.
In response, the board files an action to recover its fees, and the resident
countersues – you get the picture.
If you are a board member and the HOA is facing a lawsuit, do not hesitate to
contact Rifkind Patrick LLC for professional legal representation. Our Chicago
business lawyers stand ready to serve you.