Association Use of Indemnity Agreements as a Condition of Approving Modifications Requested by Homeowners

Homeowners and condominium owners’ associations are commonly called upon to approve modifications to an owner’s separate interest. Most state statutes and/or association declarations (CC&Rs) allow the association, acting through its board of directors, or an architectural control or review committee, to either grant approval of requested modifications, deny approval, or grant approval subject to conditions. How associations respond to an owner’s request for approval of modifications to their separate interest property depends in large part on whether the desired modifications have the potential to create damage to common area components or the property of a neighboring owner.

When addressing an owner’s request to make modifications to their separate interest, associations must take special care to protect against potential future issues involving common areas that the association is responsible for and the separate interests of other owners that may be impacted by the desired modifications being considered. As fiduciaries, board members must exercise their authority relative to the approval of modifications requested by an owner in a manner that is not detrimental to the association.

To protect the association against future issues associated with owner modifications that are approved, associations will frequently impose various conditions on the approval of the modifications. Common conditions that are imposed include: