Condo owners at a 539 unit, 48- storey condo tower have sued former board members for acting improperly in their board positions and self serving themselves. Once elected, the owners claims that “the group would use their position of trust and power, authority and discretion to access the operating budgets of the condo corporations to bind the condo corporations to contracts with businesses that they, or their associates, controlled in order to insidiously divert funds for their own benefit.” This all happened in 2016 and it wasn’t until after the condo fell so far into debt and required a $750,000 special assessment that owners woke up and took a look back at what their trusted board members had done several years ago.
Board members are fiduciaries who are trusted to act in the best interest of the entire condo community, not their individual interests. Conflicts of interest abound and many states including New York are passing laws to root out board member conflict of interests. States like Florida are requiring owner access to Official Records through a web portal for condos with 150 or more units so that owners can oversee their boards and avoid the type of self serving board governance that got these condo owners $750,000 in debt.
With an Office of the Board in place, legal requirements like conflict of interest laws in New York and Official Record access and web portal requirements like Florida’s are satisfied and allow board members to oversee each other and owners to oversee those trusted board members. Situations like the one in this condo could have been avoided with an Office of the Board.