Q: I’m a director for a condominium association.
Some co-owners have reported cracks in portions of their foundation walls, as well as recurring water intrusion. I asked ChatGPT, and it said this is “normal settling” that we can resolve with patching and some drainage improvements. Can the Board proceed on that basis? We really don’t want to spend the money to get a professional opinion.
A: Boards should be cautious about relying on AI or general internet research, particularly when making significant decisions. Most condominium and homeowners’ associations in Michigan are nonprofit corporations. The Michigan Nonprofit Corporation Act requires directors of nonprofit corporations to act “with the care an ordinarily prudent person in a like position would exercise under similar circumstances.” MCL § 450.2541(1)(b). The Act goes on to state that, in discharging his or her duties, a director or officer may rely on information from the following sources:
(a) One or more directors, officers, or employees of the corporation, or of a domestic or foreign corporation or a business organization under joint control or common control, whom the director or officer reasonably believes to be reliable and competent in the matters presented.
(b) Legal counsel, public accountants, engineers, or other persons as to matters the director or officer reasonably believes are within the person’s professional or expert competence.
(c) A committee of the board of which he or she is not a member if the director or officer reasonably believes that the committee merits confidence.
MCL § 450.2541(2). However, if the director has knowledge concerning the matter that makes reliance on such sources unwarranted, the director is not entitled to rely on those sources. MCL § 450.2541(3).
AI tools can be useful for certain purposes, but they can also be inaccurate or overly generalized.
A director must have a “reasonable belief” in the reliability and competency of the sources on which they are relying, and it may be difficult to establish the reliability of information obtained from AI tools or the internet generally. Such resources should be treated as a starting point—not a substitute for obtaining appropriate professional advice when the circumstances call for it. Consult the Association’s legal counsel for guidance specific to your governing documents and the particular facts involved before making major decisions, and do not hesitate to obtain other professional opinions as may be prudent.