Q&A: Rules That Favor a Board Member

Q. Can a board member vote on a change in rules that will directly benefits him/her? For example. the board member is an investor with more than 10 units and needs more parking spaces for tenants, therefore s/he moves to vote to change the rule allowing more spaces and placing him/her in an advantageous position to other residents.

—Concerned About Possible Impropriety

A. “Each serving board member is bound by the principles of being a fiduciary,” says David C. Hartwell, an attorney for the Chicago-based firm of Penland Hartwell, “which means that all actions taken in that role must be for the benefit of all owners and devoid of self-dealing.  If a board member seeks to amend the rules purely for the benefit of enhancing his own personal circumstances, without consideration of the other owners, then such action would likely be a breach of that member’s fiduciary obligation.  That being said, if a rule amendment happens to be to the benefit of a voting director but also is consistent with the greater good for the association, then such action would be consistent with his fiduciary obligation.  Owners who join boards solely to promote a personal agenda oftentimes cause havoc on a board and other board members need to recognize the situation and be effective in preventing the member from engaging in violative conduct.”

Related Articles

Board Optics

The Perception of Performance

Q&A: Using Association Members to Do Contractor Work

Q&A: Using Association Members to Do Contractor Work

Interesting Conflicts

How State Laws Combat Boards' Conflicts of Interest