Tag: Business Judgment Rule

The Washington Supreme Court has ruled that an HOA’s governing documents grant the board broad discretion in setting assessments. The court also ruled that the board’s decision on assessments was entitled to substantial deference — but not because of the business judgment rule. “This is a major win for associations in Washington state and may…

The Washington Supreme Court has ruled that an HOA’s governing documents grant the board broad discretion in setting assessments. The court also ruled that the board’s decision on assessments was entitled to substantial deference — but not because of the business judgment rule (Surowiecki v. Hat Island Community Ass’n). “This is a major win for…

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 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…

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…

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…

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…

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…

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.

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.