Protect your HOA from a lawsuit

Editor's note: This is a transcript of the audio file.

Your homeowners association means well by offering a crime watch program. But a program like this could get your HOA sued.

There are ways you can protect your association and your own pocketbook. I'm Janet Stauble with your Bankrate.com Personal Finance Minute.

Lawsuits can drain the financial resources of associations and even require special assessments on residents to cover legal expenses.

Review the HOA's Neighborhood Watch program rules. A resident or committee shouldn't be the security contact. An HOA should rely on local law enforcement and not give the impression that they're providing security.

If your community has volunteer crime watch, there should be training from a police officer and written rules stating volunteers should only observe and report crime, not intervene.

For added security, HOAs can contract a professional security firm for liability protection.

Check the HOA's liability insurance coverage. Criminal activity is often excluded from commercial liability coverage. Ask your association if resident volunteers are covered under the liability policy.

Want to learn more? Log onto Bankrate.com. I'm Janet Stauble.