Question:
I am currently a member of my community’s HOA board. I serve as the BOD’s secretary and have done so for the past year. Just recently, a homeowner has hinted at her intention to sue the board for supposed breaches of processes she feels are not being done correctly (ie, providing contracts and bids for homeowners to review, etc) and recently received a legal response from our legal counsel detailing what we could and couldnt provide them as homeowners etc in a very legal jargoned letter. This letter which was indirectly submitted by the board ( we didn’t give verbal approval via email but were asked for any objections to the letter…which I did reply to the whole board with my objections to the legal response letter but it was sent on anyways) but our individual board member names were included in the letter so this homeowner has alluded that she is going to name us in whatever action she intends to take. I have decided it is my time to leave the board, yes this drama is playing a role, but this decision has been leading up for some time. My question is, if I resign, am I still liable if included in her legal suit if she names me personally as a board member because I was on the board when she received the letter stemming her actions….and IF YES still liable, am I covered under any board insurance even though I am not on the board any longer.
Our master declarations have an Indemnification section that states: “To the maximum extent allowed by North Carolina law, the Association shall indemnify every officer, director, and committee member against all expenses, including counsel fees, reasonably incurred in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding if approved by the then Board) to which he or she may be party by reason of being or having been an officer, director, or committee member…”
– Colby
Answer:
Hi Colby,
You may be held liable without sufficient Directors & Officers (D&O) Insurance coverage. However, the declaration’s indemnification clause may play a part in determining liability. It’s best to consult a lawyer for further guidance.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
