We hear the words fiduciary and fiduciary duty tossed around a lot in the community association setting. How many of us give real thought to what those words mean?
The textbook definition of a fiduciary is one who is in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor and loyalty in fulfilling that obligation. This applies to members of the Association Board of Directors and management company if applicable.
When you agree to serve on your community's board of directors, you assume a fiduciary duty to the association members. If you fail to fulfill that duty, you leave yourself vulnerable to a breach of fiduciary duty lawsuit. Hopefully, the preceding sentence will not make you want to tender your immediate resignation; hopefully, it will make you want to learn more about your responsibilities as a board member.
Here are a few examples of what is expected from the board:
1. Maintain, repair, replace and properly insure the common elements/areas;
2. Properly vet vendors who service the community;
3. Disclose any conflicts of interests or, even better, avoid conflicts of interest;
4. Be good stewards of the members' money;
5. Insist on transparency in association operations;
6. Hold frequent and open meetings and conduct fair elections;
7. Read the association's governing documents;
8. Know when to ask an expert's advice rather than relying on the resident board "expert";
9. Treat your association's official records with respect and make them available to the owners for inspection; and
10. Basic communication skills are good; great communication skills will serve you even better while you serve your community.
Source: http://www.condoandhoalawblog.com/2009/11/what-does-it-mean-to-owe-someone.html
The textbook definition of a fiduciary is one who is in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor and loyalty in fulfilling that obligation. This applies to members of the Association Board of Directors and management company if applicable.
When you agree to serve on your community's board of directors, you assume a fiduciary duty to the association members. If you fail to fulfill that duty, you leave yourself vulnerable to a breach of fiduciary duty lawsuit. Hopefully, the preceding sentence will not make you want to tender your immediate resignation; hopefully, it will make you want to learn more about your responsibilities as a board member.
Here are a few examples of what is expected from the board:
1. Maintain, repair, replace and properly insure the common elements/areas;
2. Properly vet vendors who service the community;
3. Disclose any conflicts of interests or, even better, avoid conflicts of interest;
4. Be good stewards of the members' money;
5. Insist on transparency in association operations;
6. Hold frequent and open meetings and conduct fair elections;
7. Read the association's governing documents;
8. Know when to ask an expert's advice rather than relying on the resident board "expert";
9. Treat your association's official records with respect and make them available to the owners for inspection; and
10. Basic communication skills are good; great communication skills will serve you even better while you serve your community.
Source: http://www.condoandhoalawblog.com/2009/11/what-does-it-mean-to-owe-someone.html
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