4th DCA 2019) (quoting Hollywood Towers Condo. However, Florida courts have adopted and applied the business judgment rule to decisions made by the board of directors of community associations as well. Traditionally, the business judgment rule applied to protect corporate directors from personal liability. The business judgment rule operates by creating a presumption that the board of directors acted in compliance with their fiduciary duty. ![]() Application of Business Judgment Rule to Community Associations 2004), the ruling was that directors of a condominium association were not personally liable for failing to maintain and repair common elements because there was no showing of fraud, self-dealing, or unjust enrichment. Generally, the decisions of directors will not be questioned unless there is a showing of fraud, criminal activity, self-dealing, dishonesty, or incompetency. The directors of community associations owe this fiduciary duty to the members of the association. In a manner he or she reasonably believes to be in the best interests of the corporation.The duties of directors are codified in section 607.0830(1), Florida Statutes, which states that each member of a board of directors must act: Fiduciary Duty of DirectorsĬommunity associations, such as HOAs and condominium associations, are governed by an elected board of directors. In the event the dispute evolves into a lawsuit, the business judgment rule will protect directors from personal liability so long as they did not breach their fiduciary duty. ![]() As a result, disputes sometimes arise between the association and its members. The board of directors of community associations are responsible for making important decisions affecting the community and its members.
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