Fiduciary Duty, Professional Consultations and Advice
By Candice Gundel, Esq.
Every board of director owes a fiduciary duty to their community association and must discharge their duties to the community in good faith, in the manner of a reasonably prudent person, and in the best interest of the community. Additionally, recently amended Florida Statutes requires that each newly elected or appointed Board member either attend a certified educational program or certify that they have read the governing documents of the association and that they will “uphold such documents and policies to the best of his or her ability; that he or she will faithfully discharge his or her fiduciary responsibility to the Association’s members.”
The association is a complex corporate entity which must abide not only by its own governing documents but also numerous Florida Statutes, regulatory bodies, and government agencies. In discharging your duties as a board member you are entitled to rely on information, opinions, reports, statements, and advice of professionals. Such good faith reliance on the advice of professionals generally insulates a board member from liability for their actions or decisions in compliance with the advice. This good faith reasonable reliance on the advice of professionals, also termed the “business judgment rule,” may protect a board of director decision as long as the board acted in a reasonable manner under the advice of an appropriate professional.
In discharging their duties the board of directors is also entitled to rely on the guidance of a Licensed Community Association Manager (LCAM). The employed LCAM also has a fiduciary duty to the members of the community association. The board of directors may not delegate their responsibilities to the LCAM but should utilize that individual for their knowledge and experience in managing community associations. However, LCAMs cannot practice in any regulated profession without the necessary license. Examples of such professions include certified public accountant, engineer, and attorney.
The board of director and LCAM fiduciary duties and their ability to rely on advice of professionals makes it imperative that every association have a good working relationship with professionals to whom they can turn to for consultation and advice.
The ability to levy and collect assessments and enforce the governing documents is the foundation of every community association. The constantly changing Florida Statutes and legal landscape make continued open lines of communication, review, and advice of counsel on how best to proceed in collecting assessments imperative. To that end our office strives to keep our clients informed and educated with 24/7 access to our client portal, monthly memoranda and timely responses to all client inquiries. Our staff is trained to respond to board and manager inquiries regarding all facets of collections. In addition to these existing free services our office is now allocating additional attorney resources to encourage boards to consult with one of our attorneys on their collections files.