Should HOA board sue an ex-director who used association funds for a condo upgrade?

Question: Our association recently elected a new board of directors and audited the association’s financials. It obtained proof that one of the former board directors used about $35,000 from association funds to upgrade her condominium. This director still lives here and does not deny receiving this money but she absolutely refuses to pay it back, ignoring all invoices from the board. The association’s attorney says “it isn’t worth it to sue this board director to get the association’s money back, the association should just write it off.” Is this sound advice? What can we do about this?

Answer: This attorney’s advice is not sound. Writing off such a significant debt to the association is foolhardy, especially one created by a director’s breach of fiduciary duty. To do so would set a very bad precedent. To follow that advice and not recoup the association’s funds would also be a breach of the current board’s obligations to the titleholders….. Go here to read more

Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Donie Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com