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You know, this is a good thing to bring up. The people I know that live in HOAs, quite a few of them really believe the board or management office is taking care of everything. Things look good, they feel served well when the lawns are mowed and there is the annual yard sale promoted by the mgr and the trees are trimmed and the path is nicely trimmed. Maybe a beautiful pool. All looks taken care of.
One woman is concerned about the airbnbs that have started opening in her HOA. Her concern was about any accidents by strangers who are unfamiliar with the place and is there enough insurance.
The HOA has a case against their insurance company. When any accident happens, it is turned over to the insurance company. In FL, the HOA has no say anymore. The insurance company makes the decisions and does the negotiations. I am on and HOA board and have had experience with lawsuits that the HOA's insurance company litigated and decided.
As to the question of selling, yes a homeowner could sell, but he/she would have to disclose the situation to a prospective buyer or they could get sued for holding back facts that they knew would affect the value of the property.
Your information is incorrect it was the insurance company that had the authority to take the settlement they chose go to trial not the HOA.
"The (HOA) board didn't have authority," McKelleb explained. "The policy provided that authority to the insurance carrier... The insurance company turned that down and went to trial."
The legal fees are mounting they are now appealing the original verdict and suing the insurance company for choosing go to trial. The insurance company if they win they also get all their legal fees paid by contract with the HOA.
This entire case is being controlled by attorneys who end up the winners here.
I won't ever be buying a home in an HOA that's my solution
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Originally Posted by macrodome2
The HOA has a case against their insurance company. When any accident happens, it is turned over to the insurance company. In FL, the HOA has no say anymore. The insurance company makes the decisions and does the negotiations. I am on and HOA board and have had experience with lawsuits that the HOA's insurance company litigated and decided.
As to the question of selling, yes a homeowner could sell, but he/she would have to disclose the situation to a prospective buyer or they could get sued for holding back facts that they knew would affect the value of the property.
Macrodome is correct, in most states, if an insurer can settle the case with a full release within the policy limits and chooses not to do so, they can end up being on the hook for the excess. I don't know Nevada law specifically, but I worked as an insurance defense attorney for many years, and saw a fair number of cases where this happened. Insurance companies carry their own insurance (called reinsurance) to help protect them against this kind of situation. Most likely outcome will be that the insurance company negotiates some settlement above their policy limits where they have to pay out some, but the individual homeowners are not obligated to pay anything extra.
However, as also mentioned upthread, it's a good idea to have loss assessment coverage if you live in an HOA. Not every case can be settled for policy limits and in some cases, individual homeowners can potentially be liable for an excess judgement.
But of course none of this is limited to people who own in an HOA. Any homeowner could end being a defendant in a lawsuit with a judgement that exceeds their policy limits. It's foolish to make this sound like it's solely an issue with living in an HOA.
Macrodome is correct, in most states, if an insurer can settle the case with a full release within the policy limits and chooses not to do so, they can end up being on the hook for the excess. I don't know Nevada law specifically, but I worked as an insurance defense attorney for many years, and saw a fair number of cases where this happened. Insurance companies carry their own insurance (called reinsurance) to help protect them against this kind of situation. Most likely outcome will be that the insurance company negotiates some settlement above their policy limits where they have to pay out some, but the individual homeowners are not obligated to pay anything extra.
However, as also mentioned upthread, it's a good idea to have loss assessment coverage if you live in an HOA. Not every case can be settled for policy limits and in some cases, individual homeowners can potentially be liable for an excess judgement.
But of course none of this is limited to people who own in an HOA. Any homeowner could end being a defendant in a lawsuit with a judgement that exceeds their policy limits. It's foolish to make this sound like it's solely an issue with living in an HOA.
For $20 a year can have an extra 100k of insurance well worth the $1.66 a month peace of mind I disagree an HOA is far more likely to be sued then a single homeowner just due to the fact they are exposed to many more people on the property which could be hurt.
Your only guessing that the HOA insurance company is going to settle and payout the 20 million or what it might be reduced to. I have an investment which was involved in a title insurance loss the insurance company has been fighting with us for 10 years. Your just speculating we will see as the months go by I think the insurance company is going to fight the HOA .
I disagree private home is not open to the public, so the obligation is different. Plaintiff has to show negligence on the part of the homeowner was known. This also happens where an HOA gets into a legal dispute with someone they lose that lawsuit.
Typically neighborhood spaces such as playgrounds and pools are not open to the public. In this case it was a resident that was injured, so the notion of public versus private really doesn't apply.
There's also apparently some negligence on behalf of the HOA:
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the HOA knew the play equipment was deficient, yet it neglected to pay for a maintenance plan recommended by the installer. The HOA also failed to provide its own maintenance services for the swing set.
So the same thing certainly can happen to a homeowner if he is negligent in the maintenance of something on his property and he allows someone else to use it. For that matter I'm sure there are cases that went against a homeowner who did not give permission, but left unmaintained equipment accessible even though it was on private property.
As to the question of selling, yes a homeowner could sell, but he/she would have to disclose the situation to a prospective buyer or they could get sued for holding back facts that they knew would affect the value of the property.
While an all-cash buyer could purchase a property, I suspect anyone requiring a large mortgage would not be able to secure financing.
While an all-cash buyer could purchase a property, I suspect anyone requiring a large mortgage would not be able to secure financing.
That is my suspicion as well, and as good a reason as any for me to continue steering clear of HOAs! An insurance settlement is one thing, but being stuck in life because of drawn out litigation you aren’t even a part of is horrible. Plus I imagine even an all-cash buyer won’t be enthused about the potential resident obligation toward the lawsuit, even if they can technically purchase the property.
Side note - has that community dissolved their HOA yet and if not, why do you think not? It clearly wasn’t functioning as it was supposed to and what a mess this is.
That is my suspicion as well, and as good a reason as any for me to continue steering clear of HOAs!
For the vast majority of HOAs, residents have the power to make changes. All it takes is getting involved in the association. Attend board meetings, review budgets and financial statements, sit on a committee, run for the board. If you see something that makes you uncomfortable (i.e.: little to no reserve, inadequate insurance, improperly maintained community equipment, liability risk) then file complaints with the board and/or the management company. Make some noise and get some neighbors on your side. If you just sit on the sidelines and let others run the association, then you really can't complain when they do something stupid. It's YOUR association since you are are homeowner.
I know there are HOAs that are run by power hungry owners who lock out the majority and make it hard to effect change, but in my experience those situations are very much in the minority. Most HOAs are operating the way they intended, but they also suffer from a tremendous lack of participation from the people they're supposed to represent.
Now, if you don't really want the hassle of keeping up with an HOA, then you shouldn't buy a house in a neighborhood controlled by one. And that's perfectly fine. Sometimes that works out well, and sometimes you end up between a fuchsia house and a house with a dirt parking lot (with 10 cars) for a front yard.
For $20 a year can have an extra 100k of insurance well worth the $1.66 a month peace of mind I disagree an HOA is far more likely to be sued then a single homeowner just due to the fact they are exposed to many more people on the property which could be hurt.
Your only guessing that the HOA insurance company is going to settle and payout the 20 million or what it might be reduced to. I have an investment which was involved in a title insurance loss the insurance company has been fighting with us for 10 years. Your just speculating we will see as the months go by I think the insurance company is going to fight the HOA .
A title company fighting a first party claim isn't remotely the same thing as a bad faith claim by a policy holder against an insurance company who could have settled within the policy limits and didn't, triggering an excess judgement.
And no, I'm not "guessing" - I'm speaking from 20 years experience as an insurance defense attorney as to what happens in these situations. It's possible Nevada law doesn't have this kind of standard but it's the norm in most states that the insurance company and not the policy holder is responsible for the excess in these cases.
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