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THE BLAME GAME
By
Eric Glazer, Esq.
Published September 14, 2020
So you hire a professional management company and leave it to
them to run the place. What can go wrong? Well, as lawyers, we
are trained to think that everything can go wrong.
Board members and managers are both human.
Mistakes can be made
by anyone. You may not believe this, but even lawyers make
mistakes now and then. The question is….if your management
company makes a mistake and that mistake causes damage to a
third person, who is responsible for it, the management company
or the association?
The answer to the question may largely depend upon the wording
of the contract between the management company and the
association. Management companies often times place clauses in
their contracts that make the association liable for the
negligence of the management company and requires the
association to reimburse and indemnify the management company
for any damages against the management company by a third
party. In fact, Florida Statute 468.4334 states:
(2)(a) A contract between a community association
and a community association manager or a contract between a
community association and a community association management
firm may provide that the community association indemnifies and
holds harmless the community association manager and the
community association management firm for ordinary negligence
resulting from the manager or management firm’s act or omission
that is the result of an instruction or direction of the
community association. This paragraph does not preclude any
other negotiated indemnity or hold harmless provision.
(b) Indemnification under paragraph (a) may not
cover any act or omission that violates a criminal law; derives
an improper personal benefit, either directly or indirectly; is
grossly negligent; or is reckless, is in bad faith, is with
malicious purpose, or is in a manner exhibiting wanton and
willful disregard of human rights, safety, or property.
The same statute makes it clear that the relationship between
the association and management company is one of
principal/agent.
When reviewing contracts for community associations, I like to
put language in there that simply makes each party responsible
for their own negligence. A similar indemnification provision
should be included so that if one party gets sued due to the
other’s negligence, the non-negligent party gets reimbursed all
costs and expenses.
In any event, contracts with management companies can be
tricky. You may want some legal assistance before putting your
signature to paper.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Sachs, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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