Condo Board Members Have A Fiduciary Duty To Uphold
Condominium associations in Florida are usually non-profit corporations, operating primarily for the benefit of the owners in the complex. The board of directors is an even smaller entity, usually elected by the owners to exercise final authority on the day-to-day running of the association. Because of this, board members are held to a high ethical standard, having a fiduciary duty to the unit owners. Fiduciary duty is a specific legal concept, and a failure to uphold that duty can be actionable.
A Duty To Act In Others’ Best Interests
The concept of a fiduciary can be confusing to the average person. There is no agreed-upon definition for the role, but most of the ones used make reference to a kind of trustee relationship – in other words, someone who has a duty to act for the best interests of another person or group, rather than for their own benefit. One of the reasons that it can be difficult to define a fiduciary relationship is that it is fundamentally a concept of equity – the branch of law that is more concerned with fairness than with strict statutory interpretation.
A condo board and its members are fiduciaries because they have the authority to make decisions for the association, and as such, should have the potential liability if that authority is abused. The so-called “business judgment” rule usually insulates individual board members from liability unless they have committed a crime, or perpetrated fraud or unjust enrichment – for example, several board members of The Hammocks, near Miami, have been recently charged with crimes related to theft and money laundering after an investigation.
If you or another of your board members suspect that you have been in breach of your fiduciary duty, there may be little you can do to repair the damage. Since fiduciary relationships are based on trust, a breach can irrevocably destroy that bond. However, this may mean different things in different situations, leading to entirely different consequences. Depending on the scope of the breach, this may mean anything from censure to resignation to criminal penalties, and it is a good idea to consult legal help if this situation should arise.
It is important to keep in mind that the business judgment rule applies even in cases of negligence; while obviously, board members should try to refrain from negligent behavior, it may not rise to the level of a breach of one’s fiduciary duty. That said, state law does allow for a board member to be removed – with or without cause – by a vote of a majority of the voting interests. It is unlikely that such a move would prevail in most cases, but it is an option if a board member has acted in such a way as to put the board itself in danger of liability.
Contact A Tampa Condo Association Attorney
A board member’s fiduciary duty is a serious matter, and an alleged breach will be handled with the gravity it deserves. However, what exactly constitutes a breach may be debatable. A Tampa condo association attorney from the Seward Law Office can help to clarify the issues and protect your rights. Contact our office today at 813-252-6789 to schedule a consultation.