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Dan Tiernan, COOMar 26, 20141 min read

What is that Word Wednesdays - Fiduciary Duty


Fiduciary 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.

Fiduciary Duty
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!