Can the HOA charge an extra fee because they were sued and have no money?

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Can the HOA charge an extra fee because they were sued and have no money?

A few months ago my HOA was sued for negligence that led to flooding. They have sent out a letter telling homeowners that we ‘get’ to choose how to

Asked on January 25, 2018 under Real Estate Law, Utah

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

First, an HOA is not a "company" "supposed to serve" the community: as the term "home owners association" implies, it is made up of the homeowners themselves and is not an outside entity or vendor.
Second, the homeowners/property owners are the only source of funds for the HOA; if the HOA runs low on funds, it has no place to get them but from the homeowners.
Third, homeowners in a community with an HOA are generally liable for debts of the HOA generally; the HOA is your proxy, and if it is sued, in a way, that is you--all of you, collectively--being sued. 
So yes, the HOA can put an assesstment on homeowners to rebuild funds depleted by a lawsuit against the HOA.


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