Tag: Business Judgment Rule

Business Judgment Rule Protections Can Vanish Amid Conflicts of Interest

Conflicts of interest can strip board members of the protections they otherwise might have under the business judgment rule. A case involving a California HOA recently drove that point home. “The case really demonstrates the limits of the business judgment rule and how it’s very easy to step outside the limits of the law if…

Conflicts Kill Business Judgment Rule Protections

Conflicts of interest can strip board members of the protections they otherwise might have under the business judgment rule. A case involving a California HOA recently drove that point home (Coley v. Eskaton). “The case really demonstrates the limits of the business judgment rule and how it’s very easy to step outside the limits of…

Owner Sues Manager and Board Over His Own Tenant’s Behavior

Owners renting their units can lead to all sorts of complications for a community, but, just when you think you’ve got your arms around the potential issues, another one can pop up. The manager and board of directors for a condominium association in New York City, for example, probably never considered the possibility that an…

Business Judgment Rule isn’t an Absolute Shield for the Board

When owners sue a community association board of directors, the board often turns to the business judgment rule as a defense to the allegations. The defense may lead to the dismissal of the case before trial — but not always. A recent case out of New York is a stark reminder that board members don’t…

Help Your Boards Avoid Disaster-Related Missteps

Hurricanes, earthquakes, tornadoes, wildfires, and thunderstorms, hail storms, and other kinds of freak storms — no community association is immune to disasters these days. Most boards of directors recognize this, but they may find the very idea of disaster planning and response intimidating. This week’s article explains how managers can help their boards reduce the…

Recipe for Disaster: How Associations Can Fumble Emergency Planning and Response

While few doubt the importance of disaster preparedness for community associations, boards of directors can find it daunting. And rightly so — well-intentioned boards can make emergency planning and response mistakes that ultimately cause more damage and even leave them open to liability. It’s up to association managers to provide some critical guidance and help…

Use Business Judgment Rule to Avoid Association Lawsuits

Typically, if decisions made by the board turn out well, members are happy. But if the decisions lead to unforeseen costly expenses to the community, some members might sue, regardless of the board members’ good intentions. That’s why it’s more important than ever that your board’s judgments be the result of a sound, deliberative decision-making process. If they are, there’s a much better chance that courts will defer to them in case of a lawsuit.

How Business Judgment Rule Can Protect Association from Lawsuits

Typically, if decisions made by the board turn out well, members are happy. But if the decisions lead to unforeseen costly expenses to the community, some members might sue, regardless of the board members’ good intentions. That’s why it’s more important than ever that your board’s judgments be the result of a sound, deliberative decision-making process. If they are, there’s a much better chance that courts will defer to them in case of a lawsuit.

Reevaluate Home Business Ban to Foster Community’s Marketability

Telecommuting has become commonplace in many industries, with workers being encouraged to work from locations other than their company’s office. Small business owners might try to save money initially by finding a solution to running their operation other than leasing commercial space that locks them into a lease and rent. And parents of young children sometimes decide to watch other children to bring in additional income. Seemingly diverse types of workers often have one thing in common: Their homes must sometimes double as work space.

Board of Directors Not Liable for Maintenance Decisions

Facts: The association and its management company were responsible under the association’s governing documents for maintaining the common areas of a condominium building. But the management company failed to waterproof areas of the building, leading to water intrusion and deterioration. The board of directors spent reserve funds for purposes other than the repair, restoration, replacement, or maintenance of the common areas.