Participate with peace of mind
If you own a property that is within a condominium regime, that is, in a homeowner’s association, it is very likely that you have been invited – or will be invited – to join the board of directors. This appointment represents a great responsibility to ensure the protection and conservation of the investment of all the owners, as well as the continuity of their daily operation.
While representing all condominium owners, this position involves decision-making that impacts the condominium complex, its owners, and management which inherently carries risk to the condominium association board members.
Risks in the performance of this appointment
One of the main risks is the damage that the properties have due to decision-making or lack thereof, either by not enforcing the internal regulations (the Airbnb type vacation rental of a single day is very common that is a nuisance for many owners), the hiring of a supplier, the omission in the acquisition or changes of equipment, insurance coverage, labor demands, or even accidents suffered by people in common areas.
Landlords who feel affected can, and do, sue the board of directors for what, in their judgment, should have been done or not have been done. Not to mention the lawyers of a victim who is injured or lost his or her life in the pools, in the hallways, stairs, elevators, and anywhere in the common areas. These people are likely to sue, civilly and even criminally, each of the members of the board of directors including administrative staff.
How to protect yourself?
In other countries when this board appointment is offered to one of the condominium owners, he is guaranteed to have legal protection provided by the homeowner’s association. For them, it is mandatory to purchase a civil liability insurance policy that covers them against this type of lawsuit. The solution in Mexico is to contract an insurance policy in Mexico called Professional Liability for Members of the Board and Administration staff of a Homeowners Association. It is also known as "HOA Directors & Officers" coverage.
How do I contract?
Novamar Mexico was a pioneer in bringing this coverage to Mexico, the specifications were adapted, and they focused on providing protection to condominium civil associations.
For their hiring they will be asked the annual total of the maintenance fees plus the extra contributions. That is, the total income of the association. Policies have limits of half a million or a million dollars US. The annual cost ranges from two to six thousand dollars per year. If the policy is contracted uninterruptedly, you are protected by lawsuits that occurred in years prior to the date on which the lawsuit is filed.
It is very important that, in case of any event, or threat that a lawsuit may be filed, the insurance company is contacted through Novamar, so that the insurance company lawyers intervene immediately; they will begin to advise and take the case for your defense. The documents on which they will be based for their argumentation will be, among others: the Articles of Incorporation, the By Laws, the CCR’s, the Internal Regulations, all the minutes of the annual and unofficial meetings with the agreements.
Contact us, we will gladly make a study of what your condominium association needs, and we will give you a quote with the recommendations for its implementation.
For more information you can visit us on our page
Board of Directors and Administration Professional Liability
Or contact us at
México - 322-297-6440
USA / CANADA - 949-274-4111
