Explaining Fiduciary Duty For Condominium Associations

While many may treat being part of a condo board as no big deal, it carries a heavy weight when it comes to doing right by the association’s members. Every board member owes what is known as a fiduciary duty to the association and the owners in it – and, if it is breached, can result in serious legal problems for the board member in question. If you are thinking of running for a seat on the board, or you suspect that all is not well with your current board members, it is important that you understand this crucial context.

Acting In Association’s Best Interests

Condo associations primarily work as entities because everyone involved agrees to be bound by the association’s governing documents, and by the oversight of the condo board itself. Fiduciary duty is a large part of that – essentially, each board member elected must agree to act in the best interests of the association at large, rather than solely to benefit themselves. This is a common relationship that often appears in serious situations – for example, an attorney has a fiduciary duty to act in the best interests of their client.

More specific requirements of a condo board member’s fiduciary duty include keeping the common elements of the association in good repair, such as elevators and stairwells, pools, or parking lots. It can also be considered a breach of one’s fiduciary duty to act in one’s own self-interest instead of that of the association, or to fail to provide information to owners that should be legally accessible. In theory, any action carried out while acting as a board member that is not for the benefit of the condo association may rise to the level of a breach.

Many Decisions Are Protected

It can be difficult to determine whether someone has breached their fiduciary duty, particularly if the consequences are not immediately apparent. However, depending on the specific facts of the breach, it can lead to removal from the board, or even being charged with a crime if the actions merit doing so. In Florida, a person found to be in breach of their fiduciary duty may also be held civilly liable for any damages their actions may have caused.

That said, Florida does honor what is known as the business judgment rule, which states that when board members make decisions for the association that are within both their authority and their discretion, those decisions are presumed to have been made in good faith. In other words, if a board member has not committed any kind of criminal action, fraud, or unjust enrichment, their decisions will likely be allowed to stand. This can make it difficult – but not impossible – to hold a board member liable.

Contact A Tampa Condominium Association Attorney

For both condo board members and unit owners, a breach of fiduciary duty on the part of a board member can cause serious problems for the association. A Tampa condominium association attorney from the Seward Law Office can help your association handle these potentially problematic situations. Call our office at 813-252-6789 to schedule a consultation.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0718/Sections/0718.111.html