An appeals court ruled that the trial court erred in judgement for condo owners in a dispute over association fees. While the court agreed that the association must turn over its financial audits, it was determined that the rest of the case should be reconsidered because courts should generally not interfere in board decisions without clear wrongdoing.

The case involved a master condo association that provides shared services (like maintenance and cable) to several smaller associations. The board’s budget included about $248,000 for cable costs, although it had settled a dispute with the cable company for $100,000. One of the smaller associations, Fifth Horizons, argued this was unfair and that they overpaid their share. The trial court ruled in their favor, saying the board acted outside its authority and awarded damages.

The appeals court disagreed, explaining that under the Business Judgment Rule, courts usually defer to decisions made by boards as long as they act in good faith. The court also clarified that in Florida, the business judgment rule has been codified by statute for corporations, limited liability companies, and not-for-profit corporations, See § 607.0831(1), Fla. Stat. (2021). This protection applies automatically, even if not specifically raised as a defense. Importantly, the appeals court stated that it was within the board’s authority to create budgets and charge assessments, so although this was a disputed act, it wasn’t illegal.

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New Horizons Condo. Master Ass’n, Inc. v. Harding, (Fla. 3d DCA)