There are many reasons homeowner associations are sued. HOAs may be sued by homeowners, guests of homeowners, visitors to· the property, contractors, neighboring properties or their owners, and others.

Some lawsuits filed against homeowner associations are covered by insurance, others are not which means the association is on its own and must hire a law firm to provide a defense.

Some lawsuits are conditionally covered by the insurance company with a reservation of rights. When an insurance carrier issues a reservation of rights letter to the insured, it is a notice or warning that they are conducting an investigation into the claim and may deny the claim at any time. During the investigation, they mayor may not respond to the lawsuit. This places an HOA into a very dangerous situation.

Typical lawsuits against homeowner associations include:

• The alleged failure to maintain the common area (roof, windows, skylights, and walls) leading to interior water damage, mold, and potential personal injury.
• Loss of property value due to the alleged failure of the board to establish adequate assessment income and reserves;
• The alleged failure to maintain the common areas, leading to a trip or fall injury;
• Defamation;
• Wrongful assessment collection actions;
• Alleged breach of contract; and
• Discrimination.

When a homeowner association is sued, the board should immediately notify its insurance company, its general counsel, and an experienced litigation manager. See: Reasons HOA Defendants Hire Litigation Managers.