Fiduciary DutyFiduciary Duty is the special relationship of trust, confidence, and responsibility held by the association’s board toward the unit or parcel owners.If you are not willing to make decisions for the benefit of the entire community, you have no business being on your association’s board of directors. All Board Members of an HOA or Condo have a fiduciary responsibility to act in the best interest of the association. This not just a good idea, It is the law.

Both 720 (HOA) and 718 (Condo) are clear that it is a criminal offense to act in bad faith, or purposely put at risk,  human rights, safety or property in your role as an association director. Everyone has an agenda for why they want to be on their Association’s Board of Directors.  As long as the agenda relates to the benefit of ALL the owners, there is no problem.  But when Directors abuse their power for personal gain, they are breaching their fiduciary responsibility and breaking the law.
 
Morty joined the board at Del Boca Estates so that he could override the architectural review committee and paint his house lemon yellow, which was not an approved color and clashed with all the other houses which were painted a few different, approved shades of beige. This was a clear breach of his fiduciary responsibility.

Have you had problems with your association?  What did you do about it? Let us know in the comment section. 


This is an ongoing series where we will explain the meaning of an unusual or interesting word; words or phrase that is relevant in community association management. Hence the name – What is that Word Wednesdays!

by Dan Tiernan, COO, Campbell Property Management

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  1. Nancy Foryan says:

    The difficulty is in implementing the law as there are no enforcement agencies to enforce those very laws
    case in point I live in a community where the Board of Directors has blatantly not held elections they have admitted using HOA funds to do favors for each other
    Imtimadate homeowners with threats has used racial slurs just to name a few and the management company supports them
    And when a police report is filed they say it’s civil and racial slurs are freedom of speech
    A recall was tried but before it could be finished voting

    rights were suspended so we didn’t have enough votes
    The list goes on
    We have tried to take them to court but we all know they have endless pockets as they use our HOA funds to pay their Attorneys and we don’t I personally have spent thousands of dollars defending myself and property from both the board and management company and if you think this is to wild to be true we found out our board President did the very same thing in New Jersey
    So how do we get the law to do what it claims it can do
    We have no clue and have been fighting this for years and every time we ask for help we get the same response hire an Attorney well ittnit working and most have sold their homes because of it

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