The Law Spot -Does your contract provide for indemnification?

CAM Newsletter
June 2018

Does your contract provide for indemnification?

Professional practice standards for community association standards are found in section 468.4334 of the Florida Statutes.  Key to the statute is that a community association manager or a community association management firm is deemed to act as agent on behalf of a community association as principal.  The authority of the agent is determined by a written contract or other laws granting authority.

A community association manager and a community association management firm are required to discharge duties performed on behalf of the association “loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.”   Acting on behalf of another can lead to liability for doing something that hurts another, but the statute provides a way to protect you.

Under the statute does, community association managers and firms may be indemnified by the community association for ordinary negligence resulting from acts or omissions that are the result of an instruction or direction of the community association.  The indemnification, if any, must be contained the contract between a community association and a community association manager or firm.  The indemnification may not cover an 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.

Click here to read Florida Statute 468.4334