Fiduciary Duty What Board Members Should Know

 Whether they serve a co-op, condo, or HOA community, board members have a  responsibility to govern and make decisions on behalf of that community—a charge that is often referred to as the board's 'fiduciary duty.' Decisions  made on behalf of their fellow residents must be made in good faith, with the  best interests of the community always guiding those decisions. Violating this  duty can lead to legal consequences for boards and individual board members who  stray from this rule.  

 That’s why understanding the breadth and the limitations of fiduciary duty is  essential for both multifamily community board members and residents who don’t hold an office in their community. All residents must keep their elected  officials honest by paying attention to their actions, whether they are city  councilmen or condo board members. They must stay attentive to ensure that the  proper actions and methods are performed by board members. Failing to do so  could mean a special assessment is levied on everyone in the community, in  order to pay for unnecessary legal fees.  

 To pursue the best practices in governing their community, board members must  fully comprehend the concept of fiduciary duty, and allow that guiding  principle to inform all of their choices as elected members of the community.  They need to take the idea to heart, and keep it in the front of their mind,  always asking, “What’s in everybody’s best interest?”  

 Community Trust

 Defining fiduciary duty as it applies to board members means, in part, always  putting the overall interests of the community first, regardless of the issue  that the board is considering. But a selfless perspective for a community  politician is just part of the responsibility that every board member of a  co-op or condo assumes when they are appointed to their new position. The  particulars of that duty are what give some board members pause, sometimes  leading them to wrongheaded thinking.  

 “Fiduciary duty is their standard for being responsible for the association’s assets. It means having a loyalty to the association and a responsibility for  the community’s property and money,” says Marc Garrison, president of Private Holding Group, a full service real  estate management company based in Chicago. “Board members are supposed to look out for the association’s interests above all others, including their personal interests.”  

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Comments

  • Our condo court needs a new well if it is put near the old one on common property it would cost us $20,000. The person who lives closest to where the well would be billed has hired a lawyer and someone on the board assured this homeowner that the well would be placed in a different area. The area that they selected will cost us $60,000 to have a well put in because it has to go under the courts pavement. So basically were talking about $40,000 more to move it somewhere else still on common property but not near the person who complains unit which should only be $20,000. So we're talking about a $40,000 increase,I feel that this is definitely not in the best interest and a lawsuit would be brewing from that result. We reside in west palm beach Florida can you give me any suggestions?