HOA Maintenance Or $20M Lawsuit?

In February 2018, a Nevada teenager successfully sued a homeowners association for $20 million after suffering a traumatic brain injury when a swing set’s metal bar broke and landed on the teenager’s head. The old saying, “If it ain’t broke, don’t fix it,” shouldn’t apply to HOA maintenance and repairs in homeowners associations. Rather than pay for routine maintenance of the swing set, this Nevada HOA chose to wait and ultimately waited until it was too late. After the HOA lost the lawsuit, HOA residents decided to sue the Florida HOA for failing to inform them of the litigation and settlement that would impact the value of their homes. 

HOA Maintenance Isn’t An Option, It’s Essential

This case highlights the importance of regular maintenance inspections. From repairing asphalt cracks to fixing a faulty swing set, every HOA needs a routine maintenance schedule and inspection plan to avoid accidents and lawsuits. A Reserve Study would have ensured the HOA was well funded when the time came to replace the swing set.

The teenager’s injury and their consequent lawsuit could have easily been avoided by paying the $150 monthly inspection fee offered by the manufacturer. Our office provides maintenance inspections of HOA common areas and equipment for less than that on a monthly or quarterly basis. Every HOA should have regular maintenance inspections and reserve studies performed. You can’t afford not to!

Deferring Maintenance Offers False Hope

Sometimes, an HOA board chooses to delay a scheduled maintenance task to prevent increasing HOA assessments or to save money. However, this is a slippery slope toward a lawsuit like the one mentioned at the beginning of this article. Maintaining low assessments provides homeowners with a false sense of hope and a skewed view of their budget, resulting in shock at dramatic assessment increases or special assessments. 

This is why companies like ours exist: to help homeowners associations maintain a well-funded reserve fund. Hiring a certified Reserve Specialist is the easiest and most prudent way to protect your investment and ensure that the HOA is in good financial health, prepared to make necessary repairs when needed. 

A routine maintenance inspection and a reserve study help HOAs ensure that they can repair and maintain a faulty stair railing or swing set in a timely manner to avoid accidents and the consequent lawsuit. A professional reserve study informs a homeowners association’s budget and sets the foundation for repairs to be funded adequately without the need for special assessments to afford critical maintenance and repairs.

According to the Community Association Institute, there are over 45,000 homeowner associations in California. That’s a lot of stairs and swing sets! Who knows how many of those HOAs are lacking in routine maintenance inspections and Reserve Studies.We encourage any and all HOAs and managers to take the steps necessary to put these routine items in place. It’s a small change, but it could potentially save you from a $20-million-dollar mistake or having an underfunded reserve fund. In related news, the Bureau of Labor Statistics is estimating there will be 65,000 more lawyers by 2026.

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