AZHOC - Arizona Homeowners Coalition
Voice for homeowner rights and justice.

potential homeowner liability


I have been trying to educate myself about HOAs. Your site is very helpful.

My question today has to do with trying to understand potential long term liability as a home owner in an HOA that incurs a legally enforceable judgment against it for a considerable amount of money.

For example, let’s say that the board of the HOA took actions that generated a law suit against the HOA and that resulted in a judgment of $1,000,000. If I own a house in the HOA that has 100 homeowners,, then would I be liable for one, one hundredth of the judgment? If I had sold my house prior to the judgment being finalized, would I still be liable for the same portion of the judgment, or would I be free of the financial obligation?

1 Response

  1. Dennis Legere


    Most association carry liability insurance for just this issue. How must the association policy covers, varies but can span from at least 1 million to tens of millions for condominiums and anything in between. The association homeowners would be liable for any shortfall between the insurance and the judgement in proportion to their share of the association. Additionally most associations also cover what is called D&O (directors and officers) insurance that protect the association law suits against the directors of the association.


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