Resort Real Estate

Beach Homes & Condominiums

HOA Board of Directors Liability

Homeowner Associations : Alabama & Florida


Condominium Board of Director Liability

Destin-Gulf Shores-Perdido Key-Orange Beach-Pensacola-Fort Walton

Board of Directors Liability for Condominium Homeowner Associations

Board of Directors (BOD) may be liable when representing a Homeowner Association (HOA).

Fiduciary Duty: Trust and confidence are imposed on the directors and officers to act in good faith, with prudence and diligence, in the best interest of the members, regardless of cost.

  • If a Director or Officer has breached their fiduciary duty, their personal assets are at risk; volunteer members are not relieved of fiduciary duty.
  • Upon acceptance of a Director or Officer position, the law presumes knowledge of the duties and responsibilities.

Insurance: A Directors and Officers Liability Policy offers coverage that protects officers and directors from personal liability for their actions on behalf of the Association. Protection is only available when the following conditions are met:

  • Duties are properly performed by the Directors and Officers, within the scope of their responsibilities.
  • The Directors and Officers devote the necessary time and effort to perform their duties competently.
  • The Directors and Officers are not seeking personal gain, or gain for a relative or personal friend.

Risk Management

The Board of Directors must be proactive and avoid any appearance of conflict of interest; the BOD should never perform any work for the homeowner association – always use the expertise of unbiased, third-parties:

  • Common Property:  Employ a Building Inspector to periodically evaluate the physical condition of the common property, and to identify areas that may be a liability for the HOA members.
  • Financial/Accounting:  A Certified Public Accountant (CPA) should be employed to manage the finances and taxes of the condominium association.


Community Associations : Board of Director Liability

Destin-Gulf Shores-Perdido Key-Orange Beach-Pensacola-Fort Walton

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