Definition
What is Fiduciary duty?
Fiduciary duty is the obligation of board members to act with appropriate care, loyalty, good faith, and attention to the interests of the association they serve.
What it means in practice
For condo, co-op, and HOA boards, fiduciary duty shapes how members review contracts, oversee finances, handle confidential information, disclose conflicts, and make decisions on behalf of the community. Board members are generally expected to become reasonably informed and exercise independent judgment.
The precise duties and legal standards vary by jurisdiction and association type. Good process usually includes reviewing relevant materials, seeking qualified advice when needed, documenting the basis for major decisions, and treating similarly situated owners consistently.
Key points for boards
- Act for the association rather than for personal advantage.
- Become reasonably informed before making material decisions.
- Disclose conflicts and protect confidential information.
- Preserve records showing the board’s decision-making process.