LIABILITY OF CONDOMINIUM ASSOCIATIONS & ASSOCIATION DIRECTOR

The premise concerning the issues of liability of directors and officers is that directors and officers of a condominium association cannot be held liable for corporate acts simply by reason of their official relationship to the association.  Taylor v. Wellington Station Condominium Ass’n, Inc., 633 So. 2d 43 (Fla. 5th DCA 1994); Munder v. Circle One Condominium, Inc., 596 So. 2d 144 (Fla. 4th DCA 1992); B & J Holding Corp. v. Weiss, 353 So. 2d 141 (Fla. 3d DCA 1977).

The case of Perlow v. Goldberg sets forth the several laws which must be alleged to have been violated in order to find liability on the part of a director.  700 So. 2d 148 (Fla. 3rd DCA 1997).  In Goldberg, condominium owners brought suit against association directors for breach of fiduciary duty in administering insurance proceeds; the court found that the case was properly dismissed because the owners failed to allege fraud, criminal activity, or self-dealing and unjust enrichment as required by: the Condominium Act, specifically Fla. Stat. § 718.111(2) and Fla. Stat. § 718.303(1)(d); the Florida Business Corporation Act, specifically Fla. Stat. § 607.0831(1); and the Florida Not For Profit Corporation Act, specifically Fla. Stat. § 617.0834(1).  Id.

As a general proposition, a condominium association will be immune from liability under the business judgment rule when its board of directors acts in a reasonable manner.  See Garcia v. Crescent Plaza Condominium Ass’n, Inc., 813 So. 2d 975 (Fla. 2d DCA 2002) (case remanded to determine whether board acted reasonably in leasing common element parking spaces to owner).  However, an association may be held liable for an officer or director’s negligent act or breach of fiduciary duty under the condominium declaration or the Condominium Act (Chapter 718, Fla. Stat.), even if the individual officer or director is not found to be individually liable.  See e.g., Munder v. Circle One Condominium, Inc., 596 So. 2d 144 (Fla. 4^th DCA 1992) (Although the association director was not held liable for failing to maintain insurance as required by the condominium documents and Condominium Act, the condominium association was still found liable).