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Protecting Your Lake Association

November 7, 2014

Earlier this year I wrote about a lake association facing liability for activities on a lot maintained by the association and used for lake access. You can review that post here. Though there is no way for any individual or entity to guarantee it will never be sued, there are certainly protective measures that can be taken. Many lake associations are informal groups of volunteers with little structure or organizational memory. Serving on the board of an association, or otherwise assuming a leadership position, could expose you to liability. There are certain things lake associations should due to protect both the association and its board members from potential liability:

  1. Consider incorporating if you have not already done so. If you have already incorporated, ensure that the corporation is still in good standing. Many lake associations have been automatically dissolved for failure to file annual reports. 
  2. If incorporated, does the association have bylaws?
  3. If the association is incorporated, does it have regular meetings, keep meeting minutes and otherwise respect required corporate “formalities”?
  4. If the association is tax exempt, has it maintained that status? Is the association engaging in activities that could threaten that status?
  5. Does the association have appropriate insurance in place? This is particularly important if the association owns any real property. Is there D & O insurance for the benefit of the officers and directors?

This list is certainly not exhaustive, but is a good starting point. For a modest fee an attorney experienced in riparian rights matters can provide guidance as to whether your association and its leadership are protected from the potential hazards of being a volunteer and good neighbor.

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