Can a Neighborhood Association Be Sued? 8 Years, 11 Months ago
I am not a lawyer, but a simple answer is "yes." Not on the basis that anyone can sue anyone (or any entity), but on the basis that a NA or its officers can be sued and held responsible when actions of the NA or its officers have caused harm.
Several years ago I investigated the status of a NA as a nonprofit organization as concerns protecting officers from liability. Some people consulted stated that a NA was a division or entity of the City because the City defines how NAs may be organized and establishes rules and guidelines for how they may organize and operate. IMO I seriously doubt that such a definition limits the ability to sue.
One means for a NA to provide protection to itself and its officers would be to organize as an Arizona nonprofit corporation. The "umbrella" of corporate protection does not protect officers or the NA from harm caused by negligent actions, but limits actions against officers, and limits damages from legal action to the assets of the corporation. (This is general information and is not intended to be legal advice.)
A few Tucson NAs are organized as IRS 501(c)(3) organizations, however that is improper. Tucson Attorney Louis Ochoa who is a specialist in the area of nonprofits states that NAs are not eligible to be 501(c)(3) as they do not meet the criteria, which generally deal with charities and education entities. (In my experience I have seen many organizations with 501(c)(3) status that should not have been approved. They put the right words on the application, and the IRS does little follow-up on nonprofits unless there are complaints. That's not to be encouraged as there are fines and penalties involved for misrepresentation, deliberate or not.)
How did this question come about? I was recently contacted by a neighbor in another neighborhood where NA officers are allegedly calling City Parkwise anonymously to request ticketing vehicles parked on easements at the edge of streets (no sidewalks). Several residents in the neighborhood are planning to sue the NA and its officers. Again, I'm not a lawyer, but the basis appears groundless as Tucson ordinances were violated, and enforcement was proper. The individual also wanted to know how we dealt with this in my neighborhood as Parkwise had provided a copy of a past newsletter from Toumey Park NA. In the fall of 2006 we received a letter (sent to all NAs) that Parkwise could come into neighborhoods and give warnings and/or tickets for parking violations. Ward 6 advised that this would never happen, while Parkwise insisted it might. Our NA finally decided to notify all residents through our newsletter about what parking violations could incur tickets, in English and Spanish. BTW, it did happen on a limited basis. The biggest contributing problem in Toumey Park NA and many others is that streets are so narrow that residents park on sidewalks or in the City right of way or easement at the street.