Q: I live in a community with a homeowner's association. The board hired unlicensed workers to paint and replace fences. The city then cited our association with a code violation and a fairly substantial fine. There is also the expense to fix the issue. The board members want to pass the fines along to the homeowners who live close to those fences. Can they legally do this? Are the board members individually liable?
_Michael
A: The fence maintenance is the association's responsibility, and the closest homeowners can't be singled out to pay. Everyone will have to share in the expense of fixing the fences and paying the fine, just as all the owners contribute for a project that affects the common areas.
It's very difficult to hold board members liable individually. To do so, you would need to prove that they deliberately acted in bad faith. In this case, you would have to demonstrate that the board hired unlicensed contractors in an effort to hurt the community or enrich themselves.
As long as board members act diligently and in good faith, they are protected from personal liability by a legal concept known as the "business judgment rule." The court will look at whether the board had the authority to do what it did and whether it acted reasonably. If so, the board members couldn't be held personally liable.
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