The Call of Duty The Importance of Fiduciary Responsibility

When electing board members to serve on behalf of your community, you expect them to be on their best behavior and think of the needs of the building and the people who live there when making their decisions. Regardless of the type of community they serve, board members have a responsibility to govern and make decisions on behalf of that community—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 firmly in mind, and violating this duty can lead to legal consequences for boards and individual board members who stray. Unfortunately, some people do stray—and this is why there is an entire area of the legal field devoted to breach of fiduciary duty.

A Fine Line

The breadth—and the limitations—of fiduciary duty as it applies to co-op and condo board members in the Chicago-area—walks a fine line and needs to be understood by the board members so they can be careful not to tread that line. It also needs to be understood by residents so they know what to do should a board member make a decision that perhaps is not in their best interest.

Under Illinois law, a fiduciary relationship exists where there is special confidence in one’s party who is then bound to act in good faith with regard to the interest of the other party, explained Gabriella Comstock, an attorney with the law firm of Keough & Moody, PC in Naperville. “Each member of the board owes a duty to all the members of the association to act in the best interest of the association at all times.”

Therefore, she said, when making a decision, the board members should always make a decision that is deemed in the best interest of all of its members—and of all of its residents. More specifically, Section 18.4 of the Illinois Condominium Property Act sets out the powers and the duties of a condominium board of managers, and it provides that: “In the performance of their duties, the officers and members of the board . . . shall exercise the care required of a fiduciary of the unit owners.”


Related Articles

Fines and Penalties

Using Them Fairly and Effectively

Removing a Condominium Owner

Navigating a Delicate Legal Process

Removing a Condominium Owner

A Complex Legal Process