Tripp Scott

Mar. 21, 2022

Why it is safe to join the Board of your HOA

A SPECIAL REPORT by Tripp Scott's Chuck Tatelbaum

When residents of our neighborhoods are approached about joining the board of the area's homeowners association, quite often the response is "I would love to do it, I and my employer are concerned about any potential liability as a result of being a director." While at one time, this may have been a valid concern, based upon current applicable federal law, volunteers who serve on boards of directors of not-for-profit associations or organizations are, except in limited special circumstances, immune from any claim for directors' liability for their service as a board member.

When considering the issue and possibly joining the board of an HOA, it must be remembered that homeowners associations are quite different from boards of directors of condominium associations. The condo boards operate and manage the facilities and the common areas of the condominium as well as setting rules and regulations for the owners of the units. While the members of these boards serve an important and needed function, condo boards of directors are totally different from those of neighborhood homeowners associations

Homeowners associations are generally not-for-profit volunteer organizations seeking to improve the neighborhoods and the lifestyle of those residing in the area. These associations play a critical and important role in being the conduit for the residents to the elected city, county, and state officials, to municipal employees and administrators, and in providing social and charitable benefits for the community members. Recent examples of the effectiveness of our local associations have been to improve parks and recreation facilities, increase fire and EMS protection and facilities, helping to draft revised noise ordinances, and maintaining police and safety patrols within the community.

As a result of concerns for individuals as to potential liability as a result of services a board member for not-for-profit organizations, in June 1997, Congress passed and President Clinton signed what became known as the Volunteer Protection Act (111 STAT. 218). This federal law covers all not-for-profit organizations within the United States and preempts any state laws that may be more restrictive and not provide the protection afforded by the federal statute. The Volunteer Protection Act provides:

Except as provided in subsections (b) and (d), no volunteer of a nonprofit organization or governmental entity shall be liable for harm caused by an act or omission of the volunteer on behalf of the organization or entity if— (1) the volunteer was acting within the scope of the volunteer’s responsibilities in the nonprofit organization or governmental entity at the time of the act or omission

The exceptions referenced in the statute deal with willful and inappropriate conduct, criminal activities, and liability when using a motor vehicle or vessel owned by the not-for-profit organization. Thus, in almost all instances, the activities of board members of homeowners associations fall within the protection afforded by the Volunteer Protection Act.

As a result of the applicability of the federal Volunteer Protection Act, our neighbors no longer need to have a concern that they may become subject to a claim made by a dissatisfied neighbor or one who disagrees with the board's activities.

Furthermore, as a result of the immunity created by the Volunteer Protection Act, in consultation with an association's legal counsel and insurance professionals, a homeowners association may no longer need to carry directors and officers insurance, or if such insurance is felt to still be necessary, the limits of liability, and thus the cost, may be substantially reduced. It is also important to have the homeowners association's attorney make sure that the association is properly chartered as a Florida not-for-profit corporation.

With our neighborhoods becoming more diverse in many ways, it is important that members of the community be active in order for the homeowner's associations boards to fully represent the constituency of the community. Service as a member of the board of a homeowners association is rewarding and a valuable contribution to the community, and there should no longer be any hesitation or concern because of the fear of liability for serving the community as a member of an HOA board.

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