Has anyone encountered a financial entry “contract liability” in their financial statements? Please look because what it means is that your HOA is holding a 3rd party harmless from financial damages.
To explain, if the 3rd party has been sued and is required to make financial payments, which could be substantial, your HOA agreed to hold that 3rd party harmless. Guess who that 3rd party may be. Check now!
“A contract liability is a responsibility or obligation that one party of a contract has to another party. It can be used to transfer the risk of lawsuits or damages from one party to another.”
I am aware of once such California HOA subject to a $3 million plus and growing amount. And the HOA is only a $2 million operation!
HOA Constitutional Government 
Our management company attempted to build that into their contract. The problem is that their contract is fraud because only one non board member signed the contract when it is required that at least two board of directors are required to sign all instruments of the corporation.