HOA Homefront: The Business Judgment Rule isn’t a blank check

The Business Judgment Rule protects directors from personal liability if the board errs, and courts have repeatedly given wide deference to HOA decisions made within the BJR.

However, BJR protections are not unlimited.

Deference

Courts normally defer to HOA boards following the BJR, as the State Supreme Court said in 1999 in Lambden v. La Jolla Shores. In the Lambden case, a homeowner contended the board pursued the wrong response to termite problems and sued the HOA.