Can Condo Board Hire Firm Without Residents’ Input?
Real Estate Q&A: The condo board hired a firm to remove iguanas from common areas. Can they do that without a vote? Yes, under the “business judgement rule.”
FORT LAUDERDALE, Fla. – Question: Recently, our condominium’s board announced that our maintenance dues would go up next year. A week later, we received a newsletter stating that our community had hired a company to remove iguanas from the common areas. There was no mention of this cost, and we feel it’s an issue that should’ve been discussed and voted on by the homeowners. Can the board make costly decisions on behalf of the residents without their input for non-critical things like this? — Susan
Answer: Yes. In many ways, the role of community association board members is much like local government elected officials. In other ways, it is more like running a business.
Their job is to ensure the community is well maintained and control the association budget. They hire and manage vendors and association employees. Homeowners elect board members to use their discretion and do their best to make good decisions about how the community is run.
If everyone in the community had to vote on every maintenance contract, employment decision, and budget item, very little would get accomplished. Instead, people volunteer to be elected to represent their neighbors’ interests and help manage the community.
This does not mean that the board’s authority is absolute.
The full membership must vote on significant issues and renovations. Board members have a “fiduciary duty,” meaning they must put the community’s goals before their own. They must act prudently and in the best interest of the community.
If community members feel that board members are not doing a good job, they can vote them out in the next election and, in rare cases, recall them.
That said, as long as their decisions are reasonable and within their authority under the association’s governing documents, they will be protected from liability.
This is known as the “business judgment rule” and allows board members to use their judgment when managing your association.
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