Despite the fact that most board members in homeowners’ and condominium associations are volunteers, being a board member is a job that comes with quite a bit of responsibility. Community association boards generally have a fiduciary duty to their owners, and because of this, owners may file suit in an effort to hold them accountable if they believe that duty is being breached. The good news is that there are only certain specific situations in which a suit may actually move forward against an individual. An experienced attorney may be able to help clarify matters.
Breaching Fiduciary Duty
When the law states that board members have a fiduciary duty to the association’s owners, what this means is that board members must act with care and within the scope of their authority, and make their decisions based solely on the perceived benefit of the association, rather than for any personal gain. If it can be shown that any individual board member has acted in a way that does not uphold their duty, they can be held liable for the consequences.
It is generally not uncommon for an owner to name one or more board members as defendants in a lawsuit that stems from an alleged breach of fiduciary duty, either because they genuinely believe the member has acted negligently, or because they believe that naming individual board members may put pressure on the board as a whole. If a board member has committed, for example, embezzlement, an owner or another board member may file suit against them because that action would be a breach of their fiduciary duty – but what many do not know is that if there is no breach of duty, individual board members cannot be held liable.
Negligence Implicates The Entire Board
If an owner or another party tries to file suit against an individual board member when there is an issue of negligence – as opposed to breach of their fiduciary duty – Florida law states that only the association as a whole can potentially be held liable, because it is the association that has an obligation to keep the premises in good working repair. Individual members can be party to those decisions, but they would never unilaterally make them. In addition, Florida law has a provision called the “business judgment rule,” which essentially insulates individual board members from liability in association decisions as long as they acted reasonably in making them.
This may seem unfair in some respects to the average owner, but the purpose of protecting board members in this way is to ensure that an upset owner directs their complaint toward the person or entity who should be responsible for correcting it. Unless an individual board member has committed a tort, such as fraud, or other willful misconduct, the appropriate remedy for community association business is to raise the issue with the entire association, because the entire association will be responsible for making things right (if at all possible).
Contact A Tampa Community Association Attorney
If you are a board member for your HOA or condo association, and you have been served with a lawsuit, it is generally a good idea to take it seriously, even if you are unsure whether the plaintiff has a case or not. Calling a Tampa HOA & condo association attorney can help to get your questions answered. Attorney Alicia Seward and the Seward Law Office have handled many of these matters, and we can hopefully assist you with yours. Call our office today at 813-252-6789 to set up an initial consultation.
Source:
flsenate.gov/laws/statutes/2021/720.3033
By Seward Law Office, P.A. | Posted on November 10, 2022
FAQs
If it can be shown that any individual board member has acted in a way that does not uphold their duty, they can be held liable for the consequences.
Can you sue an HOA board in Florida? ›
You can sue your Florida homeowners' association (HOA) for negligence if you or a loved one was injured because of flawed, faulty, or negligent repairs or security. HOA negligence can include unrepaired steps, driveways, or other surfaces that lead to slip and fall accidents and injuries.
What happens when a board member breaches fiduciary duty? ›
If the board of directors or individual board members have breached a fiduciary duty to the shareholders, the shareholders can bring a lawsuit to protect their interests. To file a lawsuit for breach of fiduciary duty, three conditions must be satisfied: 1. You must have had a fiduciary relationship with the defendant.
How to file a complaint against an HOA board member in Florida? ›
Filing an Official Complaint
Residents may file a Condominium/Cooperative Complaint Form (PDF) directly with the Division of Florida Condominiums, Timeshares and Mobile Homes. Hardcopies of the form can be obtained by calling 1.800. 226.9101 or 850.488. 1122.
What are Florida laws for recalling an HOA board member? ›
Section 720.303(10)((a)1. of the Florida Statutes provides that a member or members of the a homeowners' association's board of directors may be removed by a vote of the majority of the association's voting interests. The statute also provides that the recall may be without cause.
Can HOA board members be held personally liable in Florida? ›
If it can be shown that any individual board member has acted in a way that does not uphold their duty, they can be held liable for the consequences.
Can a board member be personally sued? ›
As a member of the board, you could also be sued personally, and be responsible for the cost of hiring your own attorney to defend yourself. “Serving on a nonprofit board can be a commitment of your time, talent and treasure,” says Thomas Herendeen, Non-Profit D&O Product Manager for Travelers.
What are three examples of breaches of fiduciary duty? ›
Here are some common breach of fiduciary duty examples.
- Misappropriation of Assets. ...
- Conflict of Interest. ...
- Self-Dealing. ...
- Negligent Management of Assets. ...
- Inadequate Record-Keeping or Failure to Account. ...
- Failure to Distribute Assets.
A fiduciary breach in this area most commonly occurs when a board fails to enforce rules and regulations within their governing documents, fails to conduct needed inquires before investing community funds into a costly project, or failed to properly budget and plan for the current needs and future reserves of the ...
What are the three breaches of fiduciary duty? ›
A breach of fiduciary duty in California happens when an individual or entity is in a position of trust and fails to act in their client's best interests. In California, the responsibility for proving a breach of fiduciary duty falls on the plaintiff (i.e. beneficiary, ward, advisee, client).
Legal Actions Against the HOA or Board Members
Alternatively, homeowners can pursue legal action against individual members of the board who are believed to have breached their fiduciary obligations. This can include claims for negligence, mismanagement of association funds, or other related misconduct.
How do you remove a board member from an HOA in Florida? ›
of the Florida Statutes, members of the board of an HOA will need to be removed via a majority vote of the board of directors. The recall can be without cause, but this can lead to problems with the recalled person if they decide to take legal action for being recalled or removed.
Who oversees HOA boards in Florida? ›
While they must file with the county government, homeowners' associations in Florida are not governed by a government agency. Community associations must operate within the guidelines of Chapter 720 and if they are out of compliance, it is up to the community members to litigate against the HOA.
Why would an HOA board member be recalled? ›
There are three legal grounds for recalling HOA board members: With cause: for example, when a board member fails to attend meetings, fails to meet the qualification of directors, is of unsound mind, or has a felony conviction. Without cause: no specific reason is given by those issuing the recall.
What powers does the president of an HOA have in Florida? ›
The HOA board president is vested with the same powers typically given to the chief executive officer of a corporation. This office should be the authority on the rules and laws that govern the board, handle procedural duties, and serve as the spokesperson for business matters.
Who has the right to remove members of the board? ›
California Corporations Code Section 12362 allows for the removal of board members without cause, but it requires a vote by the members of the corporation. Removal without cause does not require a statement as to why the director should be removed.
Can a homeowner sue an HOA in Florida? ›
In Florida, you can sue your HOA or Condominium Association for negligence if you, a loved one, or your property were adversely affected due to their flawed, faulty, or negligent maintenance, repairs, or security. This includes both personal injuries and property damage.
What is an example of a breach of fiduciary duty in HOA? ›
A fiduciary breach in this area most commonly occurs when a board fails to enforce rules and regulations within their governing documents, fails to conduct needed inquires before investing community funds into a costly project, or failed to properly budget and plan for the current needs and future reserves of the ...
How do I recall an HOA board of directors in Florida? ›
The recall process is outlined in detail in the Florida Statutes 723.078. The first step in the process is to send a written demand to the board member that the homeowners wish to remove. This demand must state the reason for the removal and must be signed by a majority of the homeowners in the HOA.
How do I fight an HOA in Florida? ›
Options for Conflict Resolution
Not being able to sue an HOA, leaves disputing homeowners with a reduced set of options including negotiation, mediation and arbitration. Collectively, these three options comprise the alternative dispute resolutions (ADRs) that can be used outside of the courtroom to take action.
