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HOA Board Members Personally Liable

A local circuit court judge found two homeowners association board members were personally liable for levying an annual fee against an association member then suing him to collect the fee in a general district court.

Judge Dale Durrer of the Greene County Circuit Court found the two members of the Dogwood Valley Citizens Association could not avoid liability by hiding behind their board memberships for the association.

In his ruling, Judge Durrer stated, “DVCA had no authority to issue the annual fee to the defendant,” Durrer wrote. The court drew that conclusion after accepting the testimony of an expert witness.

HOA Operations

At trial in 2019, six witnesses for the defendant testified that after asking Brown and Lowe how to serve on the DVCA board, the pair allegedly attempted to sell board memberships for $5,000 apiece. Court documents also say Brown and Lowe allegedly attempted to sell the DVCA itself for $300,000.

Durrer went on to note that the board members “commingled personal funds with DVCA funds, including, without limitation, the payment of attorney’s fees from Brown’s personal checking account.”

Precedent-Setting Rulings

The judge noticed case law permitting the “piercing of the corporate veil” in finding personal liability against the two board members and levied more than $10,000 in attorney’s fees against the board members. The DVCA itself has generated numerous Supreme Court opinions and established precedent utilized by property owners association practitioners across the commonwealth.