HOAs and the Business Judgment Rule: Bad Law

Should the business judgment rule (herein “BJR”) rather than the alternative, reasonableness test for decision-making be the standard for HOA board actions? The courts grant HOA boards broad rights over homeowners by currently holding that the board is the best decider of what’s good for the HOA, not the courts, regardless of any test of the reasonableness of actions. We believe that the rational for this position was reached by faulty analysis and a bias toward treating the HOA government as the best arbiter of “the stability of the common living arrangement.”

We believe this holding deprives homeowners of their due process rights, especially when board the decisions relate to rules and regulations regarding use of private property and the conduct of the homeowner.

Read more at Judgment.

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Published in: on January 19, 2007 at 5:29 pm  Comments (1)  

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One CommentLeave a comment

  1. I think the business judgment rule has thwarted or diminished property rights, essentially saying that business expertise trumps the rights that owners have over their property. I’ve just posted on this…relating it to the public interest.


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