Thinking of joining your condo or co-op board? It’s a powerful way to support your building and shape the future of your community. It’s also a big responsibility that comes with legal and ethical obligations every board member should understand.
At the core of your role is this: you have a fiduciary duty to act in the best interests of the building and its residents. That means approaching every decision, whether it’s about repairs, budgeting, or resident concerns, with care, fairness, and transparency.
What a board is responsible for
Boards are elected by unit owners to manage the business of the building. That includes:
- Maintaining and repairing common areas such as the lobby, hallways, elevators, gym, and outdoor spaces
- Enforcing governing documents and building rules, including penalties for noncompliance
- Managing finances, including annual budgets, capital improvement planning, and reserve fund strategy
It’s more than just showing up to meetings. It means using good judgment, staying within your legal authority, and always putting the building’s needs ahead of personal interests.
The three pillars of fiduciary duty
1. Duty of care
Board members must make informed, thoughtful decisions. That means reviewing relevant documents, consulting experts when needed, and considering the impact on the building as a whole.
Example: If an owner is behind on dues, do your homework before taking action. That could include:
- Understanding why the payment is late
- Reviewing the bylaws for your options
- Exploring solutions like late fees, liens, or, if needed, legal steps such as foreclosure
2. Duty to act within scope of authority
Board members have power, but it’s not unlimited. You must stay within the boundaries of state laws, your governing documents, and your official role.
Before taking action on anything, whether it’s approving a renovation or signing a contract, confirm that it’s something the board is authorized to do.
3. Duty of loyalty
As a board member, your loyalty is to the building, not to yourself, your friends, or your personal interests.
That means:
- Avoiding conflicts of interest (no awarding contracts to your cousin’s construction company)
- Keeping sensitive information private (don’t share a neighbor’s financial troubles)
- Acting in good faith, even when decisions are tough
Fiduciary responsibility in financial decisions
Handling the building’s money is one of the most important and sensitive parts of your job. Residents are trusting you to make smart decisions that keep the building running smoothly.
Here’s how to do that well:
1. Make payments easy
Choose payment methods that are secure and convenient, and that encourage on-time payments. Many boards work with a property management company to streamline this.
2. Keep accurate records
Good financial records protect your board and your building. If you don’t have an accountant or bookkeeper, consider hiring a management company that offers full financial support.
3. Know how funds can and can’t be used
Building funds should only be used for legitimate community needs such as insurance, repairs, reserves, and shared operations. Every dollar should benefit the building.
4. Be transparent with your community
Transparency builds trust. That means:
- Sharing meeting minutes and financial summaries
- Giving advance notice of fee increases or large projects
- Providing access to redacted financial reports
- Communicating clearly and consistently
5. Build realistic budgets
Boards are responsible for preparing the next year’s budget, which includes projecting future repairs, planning for capital work, and setting monthly fees accordingly. This requires research, historical data, and often expert input.
6. Fund your reserves
A healthy reserve fund protects your building from unexpected costs and major repairs. If reserves fall short, boards often need to issue a special assessment, which can cause stress for residents.
Regular reserve studies, ideally every three to five years, help you plan effectively. If you don’t have the time, tools, or expertise, a good property management partner can help.
A quick recap
Serving on a board is rewarding, but it’s also a commitment. You are responsible for making decisions that impact your neighbors, your building, and property values.
Your fiduciary duty comes down to:
- Duty of care — make informed decisions
- Duty to act within authority — stay within legal and governance boundaries
- Duty of loyalty — put the building’s interests first
And when it comes to finances, be responsible, transparent, and thoughtful. It’s not just about the numbers, it’s about trust.
One last thing
Even great boards need support. Partnering with the right professionals, including accountants, attorneys, and full-service property managers, can help your board fulfill its fiduciary duties with confidence.
At Daisy, we work closely with boards to simplify financial management, improve transparency, and give residents peace of mind. If you’re looking to make fiduciary responsibility less overwhelming, we can help.
