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IMMUNITY OF BOARD MEMBERS?
An Opinion
By Jan Bergemann
Published
September 8, 2026
For years on end we have discussed the
immunity of board members. We have heard all the arguments telling
us that board members are more or less “UNTOUCHABLES”.
We have discussed the implications of
the Business Judgment Rule and the fact that the governing documents
are indemnifying board members and even pay for their defense if
accused of wrongdoing.
And we all know that the Florida
Legislature didn’t make any changes to the actual community
association statutes. But they made important changes to FS 617 –
NONPROFIT CORPORATIONS, the statutes that kick in once the
community association statutes are silent on this matter.
In
House Bill 797 – signed by
Governor DeSantis as Chapter No.2026-168 – the Legislature clarified
the Liability of Directors and Officers in Not-For-Profit
Corporations.
This is the important wording that clarifies the issue of board
member immunity:
617.0834 Liability
of directors and officers.—
(1) A
director or an officer is not personally liable for
monetary damages to the corporation or any person
for any statement, vote, decision to take or not to
take an action, or any failure to take any action,
as a director or an officer, unless:
(a) The
director or officer breached or failed to
perform the director’s or officer’s duties as a
director or an officer; and
(b) The
director’s or officer’s breach of, or failure to
perform, the director’s or officer’s duties
constitutes any of the following:
1. A
violation of the criminal law, unless the
director or officer had reasonable cause to
believe the director’s or officer’s conduct
was lawful or had no reasonable cause to
believe the director’s or officer’s conduct
was unlawful. A judgment or other final
adjudication against a director or an
officer in any criminal proceeding for
violation of the criminal law estops that
director or officer from contesting the fact
that the director’s or officer’s breach, or
failure to perform, constitutes a violation
of the criminal law, but does not estop the
director or officer from establishing that
the director or officer had reasonable cause
to believe that the director’s or officer’s
conduct was lawful or had no reasonable
cause to believe that the director’s or
officer’s conduct was unlawful;
2. A
transaction from which the director or
officer derived an improper personal
benefit, directly or indirectly;
3. In
a proceeding by or in the right of the
corporation to procure a judgment in its
favor or by or in the right of a member,
conscious disregard for the best interest of
the corporation, or willful or intentional
misconduct; or
4. In
a proceeding by or in the right of someone
other than the corporation or a member,
recklessness or an act or omission that was
committed in bad faith or with malicious
purpose or in a manner exhibiting wanton and
willful disregard of human rights, safety,
or property.
(2) A
director or an officer is deemed not to have derived
an improper personal benefit from any transaction if
the transaction and the nature of any personal
benefit derived by the director or officer are not
prohibited by state or federal law or regulation
and, without further limitation, the transaction is
fair to the corporation at the time it is
authorized, approved, or ratified as determined in
accordance with s. 617.0832.
(3) The
circumstances set forth in subsection (2) are not
exclusive and do not preclude the existence of other
circumstances under which a director or officer will
be deemed not to have derived an improper benefit.
(4) For
the purposes of this section, the term:
(a) “Director”
means a person who serves as a director,
trustee, or member of the governing board of an
organization.
(b) “Officer”
means a person who serves as an officer without
compensation except reimbursement for actual
expenses incurred or to be incurred.
(c) “Recklessness”
means the acting, or omission to act, in
conscious disregard of a risk:
1. Known,
or so obvious that it should have been
known, to the director or officer; and
2. Known
to the director or officer, or so obvious
that it should have been known, to be so
great as to make it highly probable that
harm would follow from such action or
omission.
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I hope that especially some state
attorneys in various counties are getting familiar with this new
wording and stop treating criminal actions in community associations
as civil matters, just because community associations are created by
contract law.
The language is clear and I don’t
think that law enforcement in Florida can use any further excuses to
not prosecute criminal actions in community associations. |
