HOA Boards: When Good Judgment Goes Wrong

HOA boards have a lot of power, but they can't just do whatever they want. The Business Judgment Rule (BJR) is supposed to protect them from lawsuits when they make mistakes. But it's not a free pass. Courts usually side with HOA boards, but only if they follow the rules. In 1999, a homeowner sued their HOA over termite problems. The court said boards have the right to make decisions, even if people disagree. This rule applies to all kinds of decisions, not just maintenance. It's important because it lets boards govern without being sued every time someone complains. But the BJR isn't a blank check. Boards can't just ignore the law or their own rules. In 2010, an HOA tried to make a homeowner fix a sewer pipe. The court said no, because the HOA was trying to avoid its own responsibilities. Boards also can't pick and choose which rules to follow. In 2008, an HOA tried to exempt some palm trees from height rules. The court said no again, because the HOA was ignoring its own rules.Boards can't ignore building codes either. In another 2008 case, an HOA tried to make a homeowner fix a common area problem. The court said no, because the HOA was trying to avoid fixing something it was responsible for. And inaction isn't a decision. In 2011, an HOA kept repairing the same sewage problem for years without fixing the real issue. The court said that wasn't good enough. So, while the BJR gives HOA boards a lot of power, it's not unlimited. Boards have to follow the law, their own rules, and actually address problems. Otherwise, they might find themselves in court.