> Board member responsibilities and liability for damages > Lähde: https://huoneistokierros.fi/en/knowledge-base/board-member-liability/ > Koko sivusto koneluettavana: https://huoneistokierros.fi/llms-full.txt [Knowledge base](https://huoneistokierros.fi/en/knowledge-base/) # Board member responsibilities and liability for damages Huoneistokierros · 4 October 2026 · 9 min read ![Woman reading papers by the window](https://huoneistokierros.fi/_astro/nainen-lukee.DBdhDGzC_7rX5.jpg) In this article 1. [The legal basis of liability](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#the-legal-basis-of-liability) 2. [Due care and the company’s interests](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#due-care-and-the-companys-interests) 3. [Equal treatment and conflicts of interest](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#equal-treatment-and-conflicts-of-interest) 4. [Decision-making and the limits of authority](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#decision-making-and-the-limits-of-authority) 5. [When liability becomes personal](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#when-liability-becomes-personal) 6. [Discharge from liability and time limits for claims](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#discharge-from-liability-and-time-limits-for-claims) 7. [How to reduce the risk](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#how-to-reduce-the-risk) 8. [Frequently asked questions](https://huoneistokierros.fi/en/knowledge-base/board-member-liability/#frequently-asked-questions) Many people hesitate to join a housing company board because they have heard that a member can end up paying for their mistakes out of their own pocket. Others believe that personal liability can never arise. Neither is true. Liability for damages is possible, but it requires certain conditions to be met, and you can reduce the risk through how you act. ## The legal basis of liability A board member’s responsibility is based on the [Limited Liability Housing Companies Act (asunto-osakeyhtiölaki, 1599/2009) (opens in a new tab)](https://www.finlex.fi/fi/lainsaadanto/2009/1599) (in Finnish). The key provisions are: - chapter 1, section 10 – equal treatment of shareholders - chapter 1, section 11 – management’s duty of care - chapter 7, section 2 – the board’s general duties - chapter 7, section 3 – board decision-making - chapter 7, section 4 – conflicts of interest of board members - chapter 24, section 1 – a manager’s liability for damages The board is also bound by the company’s own articles of association. What the board’s general duty, that is, organising the administration and property maintenance, means in practice is explained in the article [the duties of a housing company board](https://huoneistokierros.fi/en/knowledge-base/housing-company-board-duties/). ## Due care and the company’s interests Under chapter 1, section 11 of the Act, the board and the property manager must act with due care to promote the company’s interests. A member therefore does not act for their own benefit, their own staircase or a particular group of shareholders. This can be difficult in practice: one shareholder wants the lowest possible maintenance charge, another wants repairs done quickly and a third opposes taking out a loan. The board’s task is to assess the matter on the basis of the company’s overall interests, the law, the articles of association and the information available, not to side with the loudest opinion. Due care does not mean expertise. A member does not need to be an expert in construction, finance or law. It is enough that the board gets to grips with the issues and recognises when an expert is needed. ### The property manager does not remove the board’s responsibility The property manager handles day-to-day administration according to the board’s instructions and is responsible for ensuring that the accounts comply with the law and that financial management is reliably organised (chapter 7, section 17). They must also provide the board with the information it needs to carry out its duties. The board’s duties do not, however, pass to the property manager. If a member has good reason to suspect that something is wrong, “the property manager said so” may not be enough to show that they acted with due care. The assessment is always case-specific. ## Equal treatment and conflicts of interest Under chapter 1, section 10 of the Act, all shares carry equal rights unless the articles of association provide otherwise. The general meeting, the board or the property manager may not make a decision that is likely to give a shareholder or anyone else an undue advantage at the expense of the company or another shareholder. A board member is often also a shareholder, but their own apartment must not influence decisions. Under chapter 7, section 4 of the Act, a member may not take part in the consideration of a matter concerning - a contract or other legal act between them and the company, - an improvement to an apartment they occupy, or maintenance other than necessary maintenance, that differs from the maintenance or improvement of the other apartments, or - taking their apartment into the company’s possession. A member is also disqualified in a matter between the company and a third party if they can expect to gain a significant benefit from it that may conflict with the company’s interests. A typical example is a construction contract with a company the member owns. If you suspect you have a conflict of interest, say so at the meeting and ask for it to be recorded in the minutes that you did not take part in considering the matter. ## Decision-making and the limits of authority Under chapter 7, section 3 of the Act, the board’s decision is the opinion of the majority, unless the articles of association require a qualified majority. In the event of a tie, the chair has the casting vote. The board has a quorum when more than half of its members are present, unless the articles of association require more. Disqualified members are not counted as present. Measures that are unusual or far-reaching in view of the company’s size and activities, or that substantially affect the use of the apartments or the costs payable by shareholders, require a decision of the general meeting. In an urgent situation, the board may take such a measure if waiting for a general meeting decision would cause significant harm. The shareholders must then be notified in writing as soon as possible. Nor may the board or any of its members comply with a decision of the general meeting or the board that is contrary to the law or the articles of association and therefore invalid. ## When liability becomes personal Under chapter 24, section 1 of the Act, liability for damages can arise in two ways: - A member must compensate damage that they have caused to the company in their role, intentionally or through negligence, in breach of their duty of care. - A member must also compensate damage that they have otherwise caused to the company, a shareholder or another person, intentionally or through negligence, by violating the Limited Liability Housing Companies Act or the articles of association. The Act also contains a rule on the burden of proof. If damage has been caused by violating the Act in a way other than merely breaching its general principles, or by violating the articles of association, the damage is deemed to have been caused through negligence unless the member shows that they acted with due care. In that case, documented preparation is a member’s best protection. The same provisions apply to the chair as to the other members. Liability is always assessed case by case, and compensation can also be adjusted under the Tort Liability Act (vahingonkorvauslaki). ### A poor outcome alone is not enough A carefully prepared decision may turn out afterwards to have been unsuccessful: the contract price rises, the contractor goes bankrupt or damage is found in a structure that nobody could have known about. In practice, liability for damages requires that damage has actually occurred, that it results from the member’s action or omission, that the member acted intentionally or negligently or violated the law or the articles of association, and that there is a causal link between the action and the damage. The assessment looks at how the decision was prepared and what information was available at the time. ### Two examples **A careful board.** The roof is approaching the end of its service life. The board commissions a condition survey, requests several quotes, hires a construction project consultant and decides in line with the experts’ recommendations. The contractor later goes bankrupt and part of the work has to be redone. The company incurs extra costs, but the board has acted with due care. **A risky approach.** The board of another company starts a facade renovation without a condition survey, requests a quote from only one contractor and does not record the reasons for its decision. The solution turns out to be clearly oversized. In a situation like this, liability may have to be assessed, although the outcome always depends on the details of the case. ## Discharge from liability and time limits for claims Every year, the general meeting decides on discharging the board members and the property manager from liability. The decision on whether the company will claim damages from a member also belongs to the general meeting. Discharge is not binding, however, if the general meeting was not given materially correct and sufficient information about the decision or measure that caused the damage. Shareholders holding at least one tenth of the shares may, under certain conditions, bring an action on the company’s behalf. If discharge from liability has been granted, the action must be brought within three months of the decision. Otherwise, an action must generally be brought within three years of learning of the damage and of who is liable, and against a board member no later than five years after the end of the financial year in which the decision was made. ## How to reduce the risk **Keep minutes with reasons.** Under chapter 7, section 6 of the Act, minutes are drawn up of board meetings, and a member has the right to have their dissenting opinion recorded in them. For significant maintenance, financial and contractual matters, also record the reasons and the information on which the decision was based. A dissenting opinion can be relevant in any later assessment. **Use an expert.** A building problem is not solved by guesswork. In a major project, costs, risks and alternatives must be clear before the decision. It is worth requesting several quotes and keeping them. **Monitor the building’s condition.** The board does not have to carry out inspections itself, but it must make sure they are organised and that observations are dealt with. Necessary repairs should not be postponed without good reason, and the [maintenance needs report](https://huoneistokierros.fi/en/knowledge-base/maintenance-needs-report/) should be kept up to date. **Know the finances.** The cash position, loans, [unpaid maintenance charges](https://huoneistokierros.fi/en/knowledge-base/unpaid-maintenance-charges/) and upcoming repairs are things every member should know about. If you do not understand a financial matter being decided, ask. **Remember conflicts of interest and the interests of the whole company.** A member does not represent their own apartment or an individual shareholder. Induction for new members is covered in the article [housing company board member](https://huoneistokierros.fi/en/knowledge-base/board-member-role/). ## Frequently asked questions ### Does a bad decision automatically lead to liability? No. What matters is whether the member acted with due care and in accordance with the law and the articles of association when making the decision. ### Is the chair’s liability greater than that of the others? The same provisions on liability for damages apply to the chair as to the other members. The chair does, however, have specific duties, such as ensuring that the board meets when necessary. These are covered in the article [the chair of a housing company board](https://huoneistokierros.fi/en/knowledge-base/housing-company-board-chair/). ### Does a professional property manager remove the board’s responsibility? No. The property manager has their own statutory duties, but the board’s duties do not pass to them. This article provides general information and does not replace case-specific legal or technical advice. Free assessment ## Know what condition your housing company's apartments are in On a preventive apartment round we go through every apartment in a single visit at a fixed price and record our findings in an electronic report. The assessment is free of charge. [Book a free assessment](https://huoneistokierros.fi/en/contact/#kartoitus)[Get a price estimate](https://huoneistokierros.fi/en/pricing/#hinta-arvio) Preventive maintenance at a fixed price Every apartment on a single round. [Book a free assessment](https://huoneistokierros.fi/en/contact/#kartoitus) Read next ## Related articles - ![Older couple cooking in their kitchen at home](https://huoneistokierros.fi/_astro/seniorit-keittio.SmXXFndv_Z232GJB.jpg) 7 August 2026 · 6 min read ### Housing company board member: role, induction and handover Just elected to the board? 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