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.
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. Tomorrow we'll talk about the owners' responsibilities.