Condo Parking and Towing Insurance Issues

B.M. from Illinois writes:

Dear Mister Condo,

My Board set up a committee to enforce parking rules. We have cars in our lot from folks who do not live in our complex. We have a sign posted that non residents will be towed. One of the 9 lot members is against towing a car because of legal ramifications saying committee members are not protected by the Boards D&O. Others think coverage extends to committee because the Board set them up as a charter. Can members of committee be sued if a non-resident car owner brings legal action?

Mister Condo replies:

B.M., I love a good parking and towing question. The good news is there is no need to guess whether the D&O coverage will protect the Committee members. Simply call your underwriter and explain the situation. They will be glad to let you know if you are covered and likely sell you additional coverage if you are not. In America, just about anyone can sue someone else for just about anything. We are a litigious society so the reality is there will likely be lawsuits. The bigger issue with towing is legality. You need to follow local and state laws before you begin towing. With signs in place, you are likely already taking the right first steps to enforce your common parking area. You want to make sure your governance documents also support the towing of non-resident vehicles. It is also good form to announce your intentions long before the towing begins. In other words send out notices, identify the unit owners who have guests parking overnight and ask them to stop breaking the rules. Offer a carrot before reaching for the stick. Parking is always tricky in a high-density housing area like a condo. However, if the association owns the parking lot, it can enforce its own rules. Good luck!