R.M. from Garland County, Arkansas writes:
Dear Mister Condo,
Can a POA exist with no legal documents? I have been able to find any filings with the county or the state. Can the POA be sued personally without the corporation protecting them? How is this situation resolved?
Mister Condo replies:
R.M., I am not an attorney and offer no legal advice in this column. I find it highly unlikely that a Property Owners Association (POA) exists without having been formed legally by the filing of papers. Any deeded home that has been bought or sold within the POA since the POA was formed is likely deed-restricted by the POA. That means the closing papers should include a copy of the POA agreement (deed) that binds the homeowner to the POA. If those papers truly don’t exist, I would say the POA would have a very difficult time enforcing or defending the POA agreement. When you ask about the POA being sued individually, I assume you are referring to the Board Members as the POA itself is a business. Both the POA and the Board Members can be sued but the Board Members are typically covered by Directors and Officers Insurance (D&O) that protects them as long as they are conducting business in good faith. They are not indemnified from other claims (racism, theft, and so on). Typical resolution of a challenge against any type of POA, COA, or HOA is handled in court or through an arbitrator. If you feel you have a legal claim and wish to file a lawsuit, my advice would be to speak with a locally qualified attorney. I hope that helps. Good luck!