As Harris B. Katz, Esq., Managing Partner of Boca Raton law firm Goede, Adamczyk, DeBoest & Cross, PLLC., puts it “Unfortunately, it is a fairly common occurrence that Board members are brought into lawsuits as Defendants.”
In his piece in the TC Palm he explains that there may be insurance covering you as a community association board member when you’re sued by a resident, you’re still named as a defendant and have to be represented by an attorney. He goes on to explain that a legal doctrine called the “business judgement rule” should protect you from ultimately liability. According to Attorney Katz, “Florida law requires directors of a condominium association discharge their duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner they reasonably believe to be in the best interests of the corporation (i.e., the Association).” He continues, “To determine if a director’s actions fall under the business judgment rule, Florida Courts look at (1) whether the association has the contractual or statutory authority to perform the relevant act and (2) the decision is reasonable.”
What board members overlook is that it is typical for them to be sued as a board member. People get agitated and they blame the board members. Board members who are sued have to put on a defense in the lawsuit and need the association’s records to do that. Information regarding decision making by the board and how the board member exercised their fiduciary duty so that the Business Judgment Rule protect them from liability is crucial. Who has the documents and information? One of the board members? Management? How long will it take to get those records and that information?
With Office of the Board, everything is in one central place for you to access whenever and wherever you need. This is precisely the protection the board members need; particularly when they are sued individually and have to put on a defense. If you’re a board member without a central place for board business, you may want to reconsider serving unless that changes.