“Apparent Authority”

By Ward Lucas  2015

I had not heard about this case until it was brought to my attention this week.

“In the landmark 1982 case, American Society of Mechanical Engineers v. Hydrolevel, the U.S. Supreme Court determined that an association can be held liable for the actions of its officers, directors and other volunteers (including actions which bind the association financially), even when the association does not know about, approve of, or benefit from those actions, as long as the volunteer reasonably appears to outsiders to be acting with the association‘s approval (i.e., with its “apparent authority”). The Supreme Court made clear that associations are to be held strictly liable for the activities of volunteers that have even the apparent authority of the association. Even if an association volunteer does not in fact have authority to act in a particular manner on behalf of the association, the law will nevertheless hold the association liable if third parties reasonably believe that the volunteer had such authority. The law thus requires an association to take reasonable steps to ensure that the scope of its agents’ (e.g., officers, directors and committee members’) authority is clear to third parties, and that agents are not able to hold themselves out to third parties as having authority beyond that which has been vested in them by the association…”

CalhomeLaw has used this with tremendous success in California. Donie Vanitzian as one of the more well-known law trained journalists in the country has made waves, George Staropoli in Arizona, an expert at reasoning out ways of making Supreme Court decisions look applicable and relevant to ending the national HOA scam.

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