Homeowners in condominium complexes, subdivisions and more recent developments of planned units are governed by homeowners associations. The homeowners association is a limited liability company and is usually governed by an unpaid governing council and voluntary owners. It makes important decisions regarding the common parts of the property, executes and supervises the daily tasks of maintaining the property and its finances. The homeowners pay monthly fees to cover community expenses. The homeowners association may be required to pay compensation in the event of a claim.
It follows a set of rules set forth in its conditions, obligations, and restrictions which establish the duties of homeowners association and its board of directors and the rules to be followed. It also provides information on finances and explains the scope and limitations of homeowners’ insurance policy. The master policy protects the interests of the owners and, in some cases, the employees of the association, covering damages to the shared parts of the community or damage to their owners.
A primary insurance policy may include coverage to protect employees against claims. The policy’s general liability coverage pays owners damages when employees of the homeowners association or, in some cases, the hired homeowners association management company, make errors that cause damage to homeowners. The key employees responsible for making important decisions about how to manage the complex or community may not act in a way that harms the homeowner or endanger the investment of their homes. The owner can sue the employee directly as well as the association.
A homeowner association insurance policy can protect the board members by paying their legal defense fees and paying homeowners when members lose in a lawsuit. The coverage of directors and officers protects board members individually and in groups, against claims of wrongful acts or omissions of the quality of a representative of the owners association. Although it is difficult to sue a board member personally, the landlord may be entitled to damages by the HOA with this type of coverage if it proves that the board member acted beyond his scope of authority.
Common claims that may result in the homeowners’ compensation for damages involve personal injury, discrimination against employees, claims against contractors, and fraud by the board member. For example, an owner can win a case against owners association if, for not having made a repair, causes the owner to slip and fall. Instead of having owners pay their neighbor’s damages individually, the association with adequate liability coverage causes their insurance provider to pay. The deductible can increase as a result, which can lead to an increase in the maintenance fee.
You can also contact the owners association management companies Dubai for specialized assistance.