What “Fiduciary Duty” Really Means for Condominium Board Members

“Fiduciary duty”sounds like legal jargon… until something goes wrong. Then it becomes everything.

According to Merriam-Webster, a fiduciary is a person, often in a position of authority, who is entrusted to manage money or property on behalf of another party. They are legally obligated to act in good faith, with loyalty, and with care, placing the beneficiary's best interests above their own. 

Examples: Trustees, financial advisors, executors, guardians, and corporate directors.

In simple terms, a Board member (a corporate director) is not just a volunteer — they are a fiduciary. That means they are legally and ethically obligated to act in the best interests of the corporation, not in their own interest, and not in the interest of a small group of owners.

Here’s what that looks like in real life:

🔹 You represent the corporation — not your floor, your friends, or your personal preferences

Decisions must benefit the entire community, even if they’re unpopular with a vocal minority.

🔹 You must act with care and diligence

This means reading reports, reviewing financials, asking questions, and relying on qualified professionals (engineers, auditors, lawyers, managers). A “rubber-stamp” approach is not protection.

🔹 You cannot use your position for personal advantage

Preferential treatment, inside information, or influencing contracts where you have a personal connection can create serious legal exposure.

🔹 You must protect the corporation’s financial health

Underfunding reserve funds, delaying necessary repairs, or ignoring risk to keep fees artificially low is not “helping owners” — it can be a breach of duty.

🔹 Good faith matters

Even tough decisions — fee increases, major projects, enforcement actions — are valid when made honestly, with proper information, and for the corporation’s long-term benefit.

A key point many Condominium Boards Members don’t realize:

You are not expected to know everything. You are expected to make informed decisions.

That’s why governance works best when Boards collaborate closely with licensed managers under the CMRAO framework, auditors, and engineers — not when decisions are based on emotion, pressure, or “how we’ve always done it.”

Strong Boards don’t avoid responsibility.

They embrace it — because they understand they are stewards of a multi-million-dollar asset and people’s homes.

Good governance isn’t about power.

It’s about trust, accountability, and long-term thinking.

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