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Yes, HOA’s can be sued that’s why they carry insurance

Q: I have a question. Can a homeowners association be sued? One of the board member who has been bullying the owners for years has also been suing. The legal paperwork only mentioned this specific board member. We are paying the legal consultation with the HOA money. I thought the HOA cannot be sued, but the management company tells me that we can get sued.

A: Yes, associations can be sued, which is why associations carry multiple kinds of insurance. In your case, the lawsuit should be forwarded to the insurance company who provides the directors and officers insurance policy.

Q: I enjoy reading your column in the Las Vegas Review-Journal, and have learned a lot from you regarding the ins and outs of HOAs. I am a new board member for a small HOA with 75 homes, and our board is looking at hiring a new collection agency to reduce our outstanding delinquency.

Can you give me some insight on what type of questions I should be asking when interviewing these collection agencies? I have their fee schedule and it looks like they are all regulated to charge the same for their services.

A: You are correct that much of the fee schedule looks the same because of state regulations as to cost to the delinquent homeowner. Having stated that, with any company, your association would want to review the collection contract and have your legal counsel also review it.

Here are some of the questions you should ask:

■ Is there a website the board or manager can access as to the delinquent status?

■ What support is provided to the association. Is there a designated representative for your association?

■ Do you provide any education for our board to help understand the collection process?

■ Will you provide samples of the letters that you send to our homeowners?

■ What is your success rate in collecting delinquent assessments?

■ What kinds of insurance do you have?

■ In your contract, is there a reciprocal indemnification clause in case of a lawsuit, i.e. if your firm makes an error versus if the association makes an error?

■ Ask for a list of clients that you may contact.

Q: Wondering if there are any viable options to protect candidates from cheating in an election by a management company?

A: Yes. If you cheat and are caught be prepared to go to court on a felony D charge. If convicted you can face imprisonment of a minimum term of not less than one year and not more than four years. In addition, the court may impose a fine of not more than $ 5,000.

Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to holland744o@gmail.com.

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