The Law Spot-Indemnification from negligent acts or omissions Protection by contract

CAM Newsletter
March 2018

Indemnification from negligent acts or omissions
Protection by contract

If you’ve ever driven by the scene of a fender bender, then you’ve witnesses your garden variety negligence.  Most car wrecks can be classified has occurring because of the negligence of someone.  A driver backs into his neighbor’s car because he “didn’t see it,” or two vehicles merge into the same lane from opposite sides and smash into one another because they “had no idea that guy was there”.  Drivers carry insurance to defray the costs of negligent accidents, whether caused by themselves or by another negligent driver.

Negligence occurs with the community association management world, too.  As a community association manager, you may worry about how your action or inaction could cause you financial harm.  Section 468.4334 addresses one way to handle potential financial hardships to you in the future, and that’s through a contract.

Section 468.4334(2)(a) allows a community association to hold harmless a community association manager (or community association management firm) for ordinary negligence resulting from the community association manager or firm’s act or omission.  The act or omission must be the result of an instruction or direction of the community association, and in such event, the community association indemnifies and holds harmless the community association manager and the community association management firm for ordinary negligence.

Any such indemnification clause in the contract may not cover any act or omission that violates a criminal law; derives an improper personal benefit, either directly or indirectly; is grossly negligent; or is reckless, is in bad faith, is with malicious purpose, or is in a manner exhibiting wanton and willful disregard of human rights, safety, or property.

Like the garden variety car wreck case, the community association manager or firm is not protected if the act or omission was anything other than “an honest mistake”.

Click to read the statute