Georgia Court Says HOA Officer & Director Can be Personally Liable to HOA for Breaches

Georgia Appellate Court (March 27, 2014):

HOA construction defects case where the HOA sued the individual officer and director of the HOA (Ryan) for breach of fiduciary duty based on an alleged failure to adequately inspect and repair construction defects, failure to maintain adequate insurance coverage, and failure to properly maintain the property.

The trial court granted summary judgment in favor of Ryan in holding that Georgia law does not recognize a breach of fiduciary duty claim against the sole officer and director of a homeowners association. The appellate court reversed the trial court decision finding that the existence of a fiduciary relationship is a factual matter for a jury to decide. Since the evidence in this case showed that Ryan was the sole officer and director of the Association during the period in question, a jury could reasonably conclude that he had a fiduciary duty to protect the Association’s property. Also, since Ryan was given the authority to act on behalf of the Association, a jury could conclude that he was acting as an agent for the HOA. Where an agency relations exists, the agent has a fiduciary relationship to his principal. As such, the HOA has claims against Ryan for breach of his fiduciary duties.

See case decision: Thunderbolt_Harbour_Phase_II_Condo._Ass’n_Inc._v._Ryan_326_Ga.App._580_757_S.E.2d_189_(Ga._App._2014)1