A strong board of directors can be all the difference in the world between running a great condo association and dealing with daily issues and losing the confidence of those who live in a community. A board of directors needs to understand its role, and the individual responsibilities of those who serve on a board, in order to provide the best leadership and services.
In order to form an effective and strong board of directors, leaders must have a clear understanding of a condo association responsibilities, including its strengths and weaknesses. Every condo association should have responsibility for its assets as well as knowledge of where it stands with local ordinances, and state and federal law.
Here’s a better look at the roles and responsibilities of a condo association.
Condo Association’s Responsibilities & Roles
The condo association responsibilities are the backbone of a planned residential community. It can bring continuity and order to a community while also preserving the integrity of a community and providing necessary services. An association’s responsibilities may be limited to basic maintenance functions or they can be expanded on to include extensive upkeep of a property. In order to be successful, a condo association’s board of directors must fairly govern the community and have a reasonable level of participation by all members.
Board of Directors
The association has responsibility for common parts as well as the management and operation of its business operations, all needing to fall in line with standards established by the governing documents created when it was first formed. The board of directors is in charge of carrying out duties and certain responsibilities in order to better serve the members of the community.
Officers of a Condo Association
A condo association acts through its officers as well. The board of directors makes the policies for the condo association, but it’s the officers who carry out these policies more directly and handle administrative functions. Some of these officers handle clerical duties while others may carry out policies and oversee with more authority.
All officers have an obligation to act with good faith towards the association and cannot make decisions that benefit them or give them a financial advantage. Each condo association typically has a president, vice president, secretary, treasurer, and administrative officers.
Fiduciary Responsibilities
Each officer of an association, as well as its board of directors, has a fiduciary responsibility with the members of a condo association. This relationship puts in motion obligations of trust and transparency in favor of the association and its members. It requires the members of the board to act justly, in good faith, and in the best interests of the members of a condo association. This means that not only do board members and officers have to exercise due care and diligence, it means they can be held legally liable for claims made by members.
If a board of directors members is, or a member of its officers committee, are found to be acting in their own self-interest, they could be held legally liable. This is why D&O insurance for condo associations is important to invest in, keeping high legal costs down and taking care of potential reputation damage.
Each board member must know where they stand on the fiduciary relationship and the responsibilities that the condo association’s board has to the association. The duties of a board must be performed with the care and responsibility that someone with an important role has.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.