Board's Fiduciary Responsibility Is to Assemble a Professional Team
Members of an association board are caretakers of others property, and areconsidered fiduciaries of the owners. The highest standard of care is owed by a fiduciary.In order to meet the high standards of a fiduciary, the board has to take adequate steps tomaintain, repair and replace the property within the association and to administer andmanage the affairs of the association.
While board members are responsible for propertythat may be valued in the millions of dollars, many board members do not come from orhave a business background. To assist in making decisions and to administer the affairsof the association, the board should assemble a solid team of professionals to provideguidance and input on a broad array of matters.
This professional team generallyincludes a property manager, attorney, accountant, banker, insurance agent andengineer.
Property manager: For associations that are professionally managed, a propertymanager is the "quarterback" of the team. The role of professional management is multidimensional.In general, management handles the day-to-day operation of theassociation.This includes creating and carrying out maintenance programs and soliciting bids andrecommending contractors for maintenance projects, and having a good "stable" ofqualified and reliable contractors for consideration by the board.
Management alsoassists in preparing the annual budget and the annual accounting, invoicing for andcollecting assessments from owners, and maintaining the association books and records.
Boards rely on a professional management company to provide quality and timelyinformation that enables the board to make informed decisions pertaining to themaintenance, preservation and care of the property and assets of the association, and thewelfare, safety and lifestyle of the residents. Once the board has made a decision, themanagement company is entrusted with the responsibility of implementing that decisionin an expeditious and efficient fashion. Importantly, the property manager is the liaisonbetween the board and unit owners and the board and contractors.
Attorney: Many matters that come before, and decisions made by, the board havesignificant legal ramifications. It is important for a board to include legal counsel, wellversed in association law, on its team of professional advisers. Seeking legal counselearly in a matter can prevent problems, or prevent relatively small problems from turninginto expensive and time-consuming lawsuits.
The attorney provides a full range ofservices to the association. …