Now that the final health order is out addressing pool openings, it’s time for boards to make a difficult decision. Specifically, boards need to decide whether their community pools will open for the season or remain closed.
There are many factors to consider when making this decision, including the association’s ability to comply with health orders (both physically and financially) and the inevitable risk of the COVID-19 virus making its way into the pool area and infecting residents. So how is a board to make this decision?
As we all try to navigate through this unprecedented time, it is important to remember that board members are fiduciaries and have certain fiduciary obligations. The Colorado Revised Nonprofit Corporations Act sets forth directors’ standards of conduct as follows: the obligation to act in good faith, the obligation to act with the care of an ordinarily prudent person under the same circumstances, and the obligation to act in what the board reasonably believes to be in the best interests of the association. Assuming a board complies with these standards of conduct, it is absolved from liability for its decision regardless of the outcome of such decision. The protection from liability for making decisions under the foregoing standards of conduct is known as the business judgment rule.
Therefore, when considering the question of pool openings, boards should make the decision based on the information available to them (such as the state and local health orders, CDC guidelines, expert recommendations, etc.) and what they believe would be best for their communities as a whole. With different demographics, economic classes, and physical parameters, different associations may decide the pool opening issue differently. Some boards may decide it is safest to keep pools closed to protect their residents, while other boards may decide it would benefit their communities most if residents were allowed to use the pool this season.
However, when struggling with this decision, it is important for boards to remember that there is a large distinction between what is in the best interests of the community versus what is in the best interests of the select few owners who happen to be the loudest.
There is no right or wrong decision. But if challenged, a board must be able to explain the reasons behind its decision to open or close the pool and why it believed such decision was in the best interests of the association. As long as the explanation is reasonable, a judge should not question or second-guess the board’s decision or impose liability against the board or association.