Community association and HOA boards have to be very careful about how they manage the day-to-day operations and financial management of the association. They have a fiduciary duty to serve the membership and protect each member’s investment. Understandably, community association risk management must be a top managerial priority.
Associations’ property insurance should be adequate to perform major repairs in the event of serious damage to the premises. Its general liability insurance must sufficiently address claims against the association by members, guests, or even business entities. Furthermore, associations may need to have a separate policy for officers and directors. This type of policy spares board members from personal financial liability if there is a legal judgment against an association.
Maintenance Policies and Procedures
Good maintenance will help the common areas of a community or HOA stay in good condition. It also mitigates the risk that someone will experience an accident due to a hazardous condition.
Meticulous financial oversight will help assure that boards are using resources well. Associations should work with knowledgeable and responsive professionals to balance their books and advise them on important financial matters.
Proactive planning is imperative for community associations. It reduces the likelihood of problems and equips them to navigate problems if they occur.