Board members are volunteers, yet they can be sued?? The oddities of condominium management (Part 3)

In many cases, the role of a condominium board member is a rotating duty that comes around based on a schedule. It is positioned as a semi-compulsory volunteer role, with no compensation and no requirement for specialized knowledge.

However, this position of board member actually carries a heavier responsibility than one might imagine.

Board members are subject to a 'duty of care of a good manager,' which, simply put, is the 'duty to perform duties with the level of care normally expected of a person in that position.'

The problem arises when this duty is breached.

For example:
• Clearly postponing necessary repairs
• Entering into inappropriate contracts with specific vendors
• Making serious errors in accounting

In such cases, individual board members may be held liable for damages.

This is where many people feel something is wrong. The point is: even though they are taking on the role without compensation, are they expected to bear the same responsibilities as a business executive?

This structure is a major cause of the shortage of people willing to serve as board members. As a result, a vicious cycle is created where the burden is concentrated on a few people, and the quality of management declines.

To mitigate risks, it is essential to have not only the efforts of individual board members but also the involvement of experts and the establishment of proper systems. It can be said that condominium management has reached a stage where it cannot function on 'good intentions' alone.

Is the board structure of your condominium okay?
Simply having an expert check the operations and accounting once can significantly lower the risks.
Please feel free to consult with us.
We have concrete plans to lower risks.