Ellen Shapiro – Condominium Board Member Responsibility

New board members are often surprised to learn that they do not represent unit owners; instead, they represent the entity (i.e., association), whether it is a trust, a corporation, or an unincorporated association.

Board member responsibilities include the following:

  • Enforce governing documents
  • Protect from liability
  • Preserve and increase property values

If a mistake is made by board members, they should be protected from liability if:

  • their decision was made in good faith.
  • they have no personal interest at stake.
  • they are fully informed.
  • the decision was made with the best interests of the association in mind.

While judges are not required to apply the business judgment rule to condominium boards, there are steps that can be taken to dramatically reduce the liability of board members who are serving. These include making sure board members do the following:

  • get familiar with the governing documents.
  • learn about the association’s insurance.
  • review the financials regularly.
  • make decisions after careful deliberation.
  • seek advice from appropriate experts.
  • avoid conflicts of interest.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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