Condo association has to foot bill for president’s misstep
Palm Beach Post
By Ryan Poliakoff
23 July 2016

Question:
We live in a seven-unit condo on the beach. Our town owns the vacant property between our condo and the ocean. The president of our condo took it upon himself to destroy 28-year-old landscaping on the town property. The cost of destroying their property was $760. If this landscaping change had occurred on our property, the destruction of mature landscaping would have been a material change and would have required six of the seven members to agree.

The president maintains that this was general maintenance. Why would he think that we should pay for maintaining the town property? The town has its own maintenance department. There was no board meeting. He acted totally on his own accord.

Why should our condo be held responsible? The town now wants the condominium to pay to landscape the destroyed area with mature trees and plants, at a cost of $2,500. The members of our association are very upset. How can we be held accountable for the actions of an out-of-control president? Do we have any alternatives other than removing him from the board? We do not see why we have to pay for our president’s illegal behavior. — D.G.

Answer:
First, given his conduct, it’s not clear to me why you don’t want to remove this man from the board, or at the very least, why the board would not elect a different president. Consider yourself lucky that this was just a four-figure mistake.

The first question that comes to mind is whether it can be argued that your president was acting on his own, as an individual, and totally unrelated to his service to the association. If that were the case, presumably the town would go after him individually (as they would if a non-board member had destroyed town property). But, given that he is on the board, is an officer, and was purporting to do “maintenance” on behalf of the association, it is unsurprising that the town is looking to the corporation to repair the damage.

Therefore, the next question is whether your president breached his fiduciary duty to the association and may be held personally liable for the expense. As you may know, every director and officer has a duty to the unit owners to put the needs of the owners, and the association, above his or her individual needs. He or she is required to discharge his or her duties in good faith, with the same care as an ordinarily prudent person in the same position and under the same circumstances, and in a manner believed to be in the interests of the association. But, despite this duty (called a “fiduciary duty”), the Condominium Act, in conjunction with Florida’s Not for Profit Corporation Act, provides additional protections for directors and officers against personal liability.

Pursuant to both laws, a director or officer may not be held personally liable for acts taken on behalf of the association unless those acts constitute a violation of criminal law, constitute a transaction from which the officer or director derived an improper personal benefit, or constitute an act of recklessness or omission that was in bad faith, with malicious purpose, or in a manner exhibiting wanton and willful disregard of human rights, safety or property.

As you can tell, this is an extremely high standard, and suits for breach of fiduciary duty are rarely successful. The only argument I can see in your case is that the president trespassed onto and destroyed town property, both of which acts are undoubtedly crimes. So, you might be able to argue that he breached his duty of reasonable care in trespassing onto and destroying neighboring property, and by committing a crime in the process. But, the law further protects directors and officers if the person had reasonable cause to believe that his or her conduct was lawful, or had no reasonable cause to believe his or her act was unlawful; and so, I think you still have an uphill battle. Plus, you might not be able to recover attorney’s fees expended in trying to pursue the president, so you would likely spend far more on the principle of holding him accountable than the amount of actual damages that the association could recover.

Instead, I suggest you chalk this up to a relatively inexpensive lesson for you and your neighbors, and that you immediately vote to remove him from the board.


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