Mum’s the Word When Disclosure Leads to Breach of Fiduciary Duty

It is common knowledge that a director has a fiduciary duty to his or her association and its members. To be a fiduciary means that the director has accepted the highest duty imposed by the law…….This duty also obligates the director to place the interests of the association and its members as a whole over […]

Understanding Director Conflicts of Interest in Florida Condominium Associations

In the realm of condominium associations in Florida, directors play a crucial role in decision-making processes. However, their actions must adhere to certain legal standards to ensure transparency and fairness. This article explores key legal cases and statutes that shape the landscape of director conflicts of interest in Florida condominium associations.    Read the article…………………………….

Fiduciary Relationship and the Business Judgment Rule (FL)

Community association officers and directors have a fiduciary relationship to the owners of homes or units in their community. Typically, this relationship is understood as officers and directors having the obligation to act in the best interests of the association and to refrain from obtaining or accepting personal benefits at the expense of the association.  […]

Fiduciary Duty: What it Means to Your Community Association (FL)

What duty does a community association board member owe to their association? What happens if that duty is breached? During the 2023 legislative session, legislation was proposed that would have made directors criminally liable for failure to timely respond to official record requests, among other provisions.  Read the article………………………..

A Practical Approach to Board Member ‘Fiduciary Duties’ (CO)

The words “fiduciary duty” are ones that many of us in the community association industry come across frequently. It is especially common to hear these words thrown around loosely when one or more members of a community association board of directors are “misbehaving”. In legal terms, it can be simply defined as owing a duty […]

Condo Column: The crypto mistake (NH)

There have been rumblings in Condo World about cryptocurrency, i.e. digital money with no physical presence like coins or bills. A lot of people have made a lot of money by investing in it and seeing it double, triple or more in worth in a very short period of time. Good for them.   Read the […]

Former Association Member Can’t Sue for Breach of Fiduciary Duty (TX)

In 2014, Kato purchased a unit at an association, thereby becoming a member of the association. Kato also joined the board and became its President/Treasurer. Later that year, Kato’s unit, and two other units in the association were destroyed by fire.   Read the entire article……………………………….

Board Member 101: Best Practices (IL)

Board members who are elected to represent their condominium, homeowner (HOA), and townhome community association carry a weight on their shoulders to ensure they are acting in the best interest of their fellow neighbors.   Read the entire article……………………………….

Conflicts of Interest – Recognize Them Now to Avoid Problems Later

If you live in a condo or a co-op, you most likely have heard the term fiduciary duty, usually in reference to the responsibilities and obligations of board members and management. But what is a fiduciary duty? In essence, it’s a legal relationship between two parties that gives one party the right to act and […]

Fiduciary Duties Of HOA Board Directors

When a person is elected to be an HOA Board Director (“Board Director”), such person is likely aware that they will be acting as a volunteer to lead the Association as part of a Board of Directors group. What they may not consider is that they are taking on fiduciary duties, which many times are […]

Fiduciary Duty and Your Board (IL)

When an owner agrees to serve on a condominium board, one must recognize that they take on additional legal responsibilities and obligations. On the other hand, when electing board members, you expect them to be on their best behavior and think of the needs of the property and the people who live there when making […]

A Board Member’s Guide to Fiduciary Duty

When a candidate accepts their election to the board of directors, they take on a number of duties that come with a set of risks. We always recommend that each association provide great insurance coverage for their board members and access to the education they need to help prepare them to successfully carry out their […]

Aging Infrastructure and Fiduciary Duties for Communities (CO)

Our communities are like our bodies; all the stress alleviation endeavors in the world won’t help us if we aren’t taking care of ourselves or our communities. Reflection or Meditation will not do us any good if we aren’t getting sufficient sleep. When we try to reflect or meditate, we might doze off because we […]

The Ethical Dilemmas of Community Association Insurance

The procurement and maintenance of Insurance in the community association industry is shrouded in unique ethical considerations that do not apply to individual insurance consumers. Enter the Community Association Board’s (“Board”) “fiduciary Duty.” This process is imbued with inherent ethical considerations for not only Boards, but also Community Association Managers (“CAMs”), Community Association Attorneys, Community […]

Fiduciary Responsibility of HOA Board Members

As a Board member, you are entrusted with the money, property and the day-to-day business of your Association. Serving on your Association’s Board can be an important way to positively impact and maintain the well-being of your community. However, to serve responsibly, as well as avoid potential legal liability, it is important to know what […]

Self-Dealing by Director is a Breach of Fiduciary Duty (Case 2)

Carmichael and other unit owners (collectively “Owners”), individually and on behalf of the Association, sued the Officers and the Management company for breaches of fiduciary duties and for unjust enrichment because the Officers caused the Association to provide for the maintenance and preservation of property that was not part of the Association (the retail space […]

Identifying Conflicts of Interest

As a board member, you strive to make the choices that protect your community and create a neighborhood that homeowners are proud to be a part of. You follow your obligations to complete your duties in good faith and with due care, and you act in the best interests of the association.   Read the article………………………….

Call of [Fiduciary] Duty: How Good Faith, Due Care, and Loyalty Guide Community Associations’ Boards (NC)

Nearly 30 percent of North Carolina’s population lives in a community association of some sort, be that a condominium or single-family community.   Yet, confusion among the general population about the nature of community associations is pervasive, and that confusion extends to the understanding about the actual duties of the volunteer directors who serve their community […]

Conflicts of Interest in HOA Boards

A conflict of interest can range from problematic to disastrous for a homeowner association board. HOA board members should be impartial representatives of their communities who make decisions with the entire association’s wellbeing in mind. A conflict of interest will interfere with these duties and can lead to severe consequences if not dealt with in […]

Failing to Maintain and Properly Collect Assessments is a Breach of Fiduciary Duties

Plaintiffs were two owners (Maples and Brown) at Compass Harbor Village Condominium Association in Maine (the “Association”) who had purchased their respective units sometime in 2007. The Declarant was an LLC that held more than 50% of the votes (15 of the 24 units) and therefore controlled the board. For many years the Association common […]

Court Finds This Triptych Sufficient To Establish A Director’s Breach Of Fiduciary Duty (CA)

Yesterday’s post discussed one aspect of the Court of Appeal’s holding in Coley v. Eskaton, 2020 Cal. App. LEXIS 629. The case involved a homeowner’s lawsuit against two directors of the homeowner’s association and their employers. Among other things, the plaintiff alleged that the directors approved assessments that benefited their employers in violation of the […]

The Rule of Judicial Deference: Protecting HOA Decisions Based on Reasonable Investigation and Made in Good Faith

Volunteer officers and directors of a common interest development (“HOA”) are required to make decisions which often have significant legal and financial implications for the HOA and its membership. Because they are unpaid volunteers, officers and directors are afforded certain protections against personal liability similar to those afforded to directors and officers of other types […]

Co-op and Condo Boards’ Fiduciary Duty Is to All Residents (NY)

Subletting is an attractive option, particularly in condos, so how can it get out of hand?  It’s the board’s financial responsibility not to saturate the building with sublets. Once the building hits a certain level, lenders will not lend in that property. If it goes over 50 percent, Fannie Mae and Freddie Mac for sure […]

State laws govern HOAs in all Nevada communities

Q: I live in a homeowners association in Pahrump. I was appointed to the board on May 2018 and I resigned August 2019. I resigned because of the reckless and (uncaring) behavior of the other board members about the Nevada Revised Statute 116. The president said it twice — in an illegal closed meeting — […]

The Business Judgment Rule: A Shield for the Community Association Board Member and Directors (FL)

Disputes between community associations and their members are common. These disputes may evolve into lawsuits. In some instances, the plaintiffs in these lawsuits attempt to hold the directors or officers personally liable for damages. Luckily for the directors and officers, the business judgment rule shields them from personal liability, unless they breach a fiduciary duty.  […]

HOA board has fiduciary responsibility to community (NV)

Q: Do homeowners association board members have fiduciary responsibilities to protect the investments of all of their residents? If so, by not intervening with the city and allowing a special use permit to be approved and thus invalidating the terms of Federal Housing Administration financing, has the HOA failed it its duty? If so, how […]

What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series) (VA)

Board members are told that they have fiduciary duties to the community association, but what does that really mean? Fiduciary duties arise because the members of the association entrust a board member to act in the best interest of the association when handling the association’s business.  There are three components that are important to understand […]

5 HOA Terms Every Board Member Needs to Know

Whether you just got elected to the community association board or you’ve served for years, you want to make a good impression. Knowing these common HOA terms will help you sound like you know what you’re doing while you get up to speed or serve as the refresher you need to keep growing as a […]

Fiduciary Duties 101 – Limiting the Liability of the Board

A fiduciary duty creates an obligation to act for another’s benefit. A board of director’s fiduciary duty is to the association and its members. So what are the core duties of an association director? Individual loyalty, good faith and fair dealing in conducting the association’s business, care, and obedience to follow and enforce the association’s […]

How does a board member legally act in the best interest of homeowners?

Q: I am a member of our homeowners’ association board of directors who was recently appointed to fill a vacate position. I have never acted as a board member. I read some materials relating to the work of board members which stated that board members owe the homeowners a fiduciary duty. Could you explain what […]

Portland Place property owners claim association failed to fix sewers (MO)

Property owners are suing homeowners’ association trustees, citing alleged breach of fiduciary duty and constructive fraud.   Mark T. McCloskey and Patricia N. McCloskey filed a complaint on Oct. 23, in the St. Louis Circuit Court against Sanjay Jain, Russell John and Richard Gemberling, Portland Place Association trustees, alleging they breached their duties to maintain the […]

Problem Boards: What To Do When Your Board Breaks the Rules

A condominium, cooperative or homeowners’ association elects a board for a specific purpose: to manage the community’s day-to-day business, oversee special projects, and draft and uphold the rules and regulations that keep life orderly and harmonious. In fact, the board has an inflexible fiduciary duty to act in the best interests of the community as […]

What Does it Mean to be a Fiduciary?

In simplest terms, to be a fiduciary to another person or party is to be in a position of trust. For example, a patient trusts her doctor to make the correct diagnosis. A parishioner trusts his priest to keep his confessions confidential. And if you are our client we hope you will trust us, as […]

Fiduciary Duty and Community Association Board Members

We frequently talk about the fact that homeowner association board members have a “fiduciary duty” to the members. What exactly is it? Is it spelled out in the law? What sort of actions would violate that duty?  A fiduciary duty arises out of a relationship in which one person or entity is entrusted to make […]

What is Condo Association Fiduciary Duty?

The term “fiduciary duty” comes up often when talking about Condo and HOA Boards. According to US the official definition of fiduciary duty is:  “A fiduciary duty is an obligation to act in the best interest of another party…A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and […]

How to Effectively Represent Condo Association Owners as a Board Member

Condo Association Board members are elected to represent Condo Association Owners and to carry out their fiduciary duty with regards to the Condo Association. That’s the job. There are many other challenges that go with it, but those are the two major duties. In all of the horror stories you read about when Boards break […]

Fiduciary Duty and What it Means for Your HOA Board

Just try saying that five times fast. Not only is it a serious mouthful, it also carries serious legal obligations and potential consequences. As board members, your community has entrusted you with the “power” to make decisions on their behalf and in the best interest of the community. It is your obligation to remove your […]

An HOA Board’s Fiduciary Duty: The Key to Avoid Conflicts of Interest

In general terms, fiduciary duty is the highest standard of care imposed under law, and it occurs when one or more persons are responsible for the money or property of another. The fiduciary is expected to be honest, free from fraud and faithful to his or her obligations.   Read the article………….

Corporations Have a Fiduciary Duty towards Owners in Breach of the Rules

This is the recent story of an Ottawa condominium corporation who brought a compliance application against the occupant of a unit. Unfortunately for the corporation, when came the time to rule on legal costs, the corporation was reminded that it must consider and balance the interests of all owners… even those in breach of the […]

Although Individual Board Members Owed a Fiduciary Duty to Individual Condo Owners, the Corporation Did Not (NY)

Condominiums—Homeowners Associations—Business Judgment Rule—Plaintiff May Assert Claim for Breach of Fiduciary Duty and Punitive Damages Against Individual Members of a Board of Directors, But Not Against the Corporation Itself—Although Individual Board Members Owed a Fiduciary Duty to Individual Condominium Owners, the Corporation Did Not Owe Such Duty   Read the article………..