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M A R C H , 2 0 1 7
2004), where board members were
alleged to have breached their fiducia-
ry duties by changing the method of
calculating maintenance assessments
(i.e., by re-measuring the units) several
years after the condominium had been
in operation. As a result, the monthly
assessments for certain types of resi-
dences increased while decreasing for
others. Allegations of self-dealing were
rejected by the court because there
was no evidence the association or
board benefited by the re-measuring.
Additionally, there was an independent
business reason for the re=measurement
– the source of the developer measure-
ments were unclear and contradicted
by architectural drawings.
Therefore, in order to pierce the
business judgment rule, a claimant
must present evidence the board or
an individual board member received
some type of direct benefit from an
authorized act of the board.
3. RELIANCE ON ADVICE OF
COUNSEL
A board that acts in reliance upon
advice of its experts and legal pro-
fessionals cannot be held liable for
negligence or breach of fiduciary duty
if that advice turns out to be wrong. A
provision of the New Jersey Nonprofit
Corporation Act specifically provides
board trustees will not be liable if they,
acting in good faith, rely on the opinion
of counsel. N.J.S.A. § 15A:6-14.
Therefore, condominium boards are
encouraged to seek the advice of
counsel; however, as a practical mat-
ter, trustees should always use their
best business judgment in making
informed decisions that affect the
association and its members. n
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