Maine Alliance for Road Associations
We are a road association with about 2 miles of road with multiple lots on it. One of the lots is owned by our Road Association and is a beach lot that all members share.
Some members want to put a dock on the beach lot for all members to share. A question of liability came up with the addition of the dock. The area is already used for kayak, canoe and john boat use and swimming. There is a boat launch that is not frequently used and only for small crafts.
Our Road Association is governed by 9 Board of directors which include a President, Vice President, Clerk and Treasurer. We presently have no insurance protection on any of our directors or the beach property.
My questions are:
Can a road association own property?
Does the liability protections in the law apply to the beach?
How should we properly protect our directors and members as far as liability is concerned?
What advice would you give us about putting a dock at the beach?
Thank you very much for your guidance with regards to our concerns.
You didn't say whether your road association is a Non-Profit or a Statutory Association. First of all, I suggest you read the law on Statutory Associations carefully. Here's a link: https://legislature.maine.gov/legis/statutes/23/title23sec3101.html
Use the arrow at the top right of that page to scroll through the statutes that follow, sections 3101-3104.
A Statutory Association is supposed to use its member dues ONLY for road maintenance (plus a few other things like administrative costs and insurance.) A dock would not qualify as road maintenance. A Non-Profit probably would allow it. Or as a Statutory Association, you could probably set up a separate fund that people could donate to voluntarily above and beyond their dues if they want a dock.
I don't think a road association can be prohibited from owning property if it was already granted to them, but a Statutory Association cannot buy property, and cannot use member dues to maintain property other than the road. That sounds more like a Homeowners' Association. I must confess I know nothing about Homeowners' Associations, and not much more about Non-Profit road associations!
The liability protections within the law on Statutory Associations would not apply to the beach. It provides only limited protection for the officers, basically for performing their administrative duties. I would recommend you look into finding a policy that would cover what you need, both for liability in case someone were to have an accident on the road, and for your beach. Our association has a policy that covers us for liability on two miles of road, and it costs us about $700 - $800 dollars a year. But that's without a beach or a dock! I would suggest you look into what it would cost for insurance with or without a dock before you decide whether you want a dock or not. If you're a Statutory Association, I believe the extra cost of the policy to cover the beach and dock should also be paid by a separate fund, not by member dues. If you're a Non-Profit, I don't know what laws apply.
Sorry if that sounds confusing - maybe someone with a Non-Profit road association or with a Homeowners' Association can give you a better answer.
The association for which I serve as President is a non-profit corporation organized under the laws of the Maine and it owns 2 lots of common land for the benefit of the residents in the association.
I do not know which liability protections in the law you refer to. Can you please elaborate?
I would recommend your association purchase Directors and Officers coverage from an insurance carrier.
Regarding a dock, it depends on your association’s needs. Our road association removed a deteriorating dock because of (1) the potential liability leaving it in place presented (we found evidence of strangers using the dock), (2) the extra cost to our insurance premium of maintaining a dock, (3) the cost to repair the dock, (4) other association members have their own docks and (5) our association is located close to a public boat launch.
What is your ratio of Officers/Directors to homeowners/lot owners? I think your premium for Director and Officer coverage will depend on the number of Director and Officer positions you are seeking to insure.
If this is a Statutory Road Association, I believe the only liability protection in the law is in 23 MRS 3101 paragraph 7:
7. Immunity from suit. A commissioner, board or owner of a parcel of land who undertakes activities of a road association under this subchapter is immune from civil liability in all actions by owners or lessees of other lots for the following activities:
A. The determination of repairs and maintenance to be undertaken; [PL 2009, c. 238, §1 (NEW).]
B. The determination of materials to be furnished or amount of money to be paid by each owner for repairs and maintenance; [PL 2009, c. 238, §1 (NEW).]
C. The collection of the money from each owner; and [PL 2009, c. 238, §1 (NEW).]
D. The awarding of a contract authorized under section 3103. [PL 2009, c. 238, §1 (NEW).]
The Maine Alliance for Road Associations