Cohousing-L Mailing List: Negligence in community asset management

[Norman Gauss (normangauss]

When a separate Board is charged with managing the community assets and it
is found to be negligent, the recourse is to sue individuals of the Board
and use their private assets to satisfy any judgment against them.
Directors insurance is a common way to protect Board members.

However, if the whole community is found to be negligent in its management,
it cannot sue itself.  Thus there is no recourse.  The community can be
socked with huge financial losses if attention was not addressed to
preventative measures.

A good example is disaster insurance.  If the community decides not to have
disaster insurance and a disaster happens, there is no recourse.  However,
if the Board decides not to have disaster insurance, it can be held liable
if a disaster occurs.

Another example is liability insurance.  If the liability insurance is
insufficient or if the whole community decides that it does not need it,
there is no recourse if someone is seriously hurt because of negligence in
maintaining safe buildings or grounds.  The Board can be sued, but the
community cannot sue itself.

 

Norm Gauss

Oak Creek Commons

Paso Robles, CA