What Is the Fiduciary Duty of a Condo Board?

It’s a big deal to be elected to the board of a condo, which generally comes with a lot of power and responsibility. Members of a condo board have what is called a “fiduciary duty.” This means that they are responsible for making decisions on behalf of their community that are in their best interests. If someone fails to uphold their fiduciary duty, it can result in serious legal consequences. 

A Special Relationship

Fiduciary duties stem from special relationships between people, in this case, condo board members and unit owners. Other relationships that require fiduciary duties include clergyman/congregant, lawyer/client, broker/client, and so on.

A fiduciary duty requires that someone must act in more than just his or her own self-interest, but rather higher responsibilities. However, in the situation of a condo board member, they are often also unit owners. But it’s important to differentiate that they must be thinking about what’s best for the whole condo association and not just for themselves as a unit owner. 

The fiduciary duties of a condo board member include the duty to maintain, repair, and restore common areas of the condominium complex.

A Breach of One’s Fiduciary Duty

While there are a variety of ways in which a condo board member can breach his or her fiduciary duty, these abuses of power generally fall into one of three categories: 1) self-dealing; 2) exercising personal vendettas; or 3) selective enforcement.

1. Self-dealing

Self-dealing occurs when someone obtains a personal advantage due to their position even though the opportunity should have been available to everyone.

2. Exercising of Personal Vendettas

One exercises a personal vendetta when they treat someone unfairly due to a personal issue that they have with that person and not for any other legitimate reason. 

3. Selective Enforcement

The third type of abuse of power is when someone plays favorites or dislikes someone and only enforces the rules or regulations with some people but not everyone.

Abuses of Power

If a condo board member is found to have breached his or her fiduciary duty, the consequences that they will face are dependent upon the specific facts and circumstances of the breach. However, depending on what they have done, they may even be charged with a crime (e.g. stealing money)

If you believe that a member of the condo board has breached his or her fiduciary duty, it’s important that you look over the specific bylaws of your condo in order to determine your options. You may wish to consult with a condominium attorney in Rhode Island who can advise you of your options. 

PALUMBO LAW Helps Those in Rhode Island with Condominium Issues

At PALUMBO LAW, our experienced Rhode Island Condominium lawyers work strategically to help our clients get what they deserve. We have experience with condominium boards and claims and know what it takes to hold board members accountable. To learn more or to schedule a free consultation, call us today!