Board Composition Puts Association Between a Rock and a Hard Place

A Maryland court found that the interested director transaction rule called into question the propriety of the board’s decision regarding an assessment to cover the costs of landscaping in a mixed community.

Such issues could become more common going forward. “We’re seeing a trend toward more mixed communities,” says Ursula Burgess, a shareholder in the Maryland law firm Rees Broome who represents several hundred community associations.

In our new article, we’ll discuss what you need to know about the potential implications for board decisions if you manage such communities, including:

  • How the interested director transaction rule plays out in an association context
  • How to steer clear of problems that come with having an inequitable board
  • How the allegations shifted the burden to the association to show the board’s decision was fair and reasonable
  • How to avoid the missteps that got the board in this case into so much trouble

Read the full article here: “Interested Director” Rule Threatens Assessment Allocation in Mixed Community

Best regards,
Matt Humphrey