Fiduciary Responsibilities of Board Members Practical Guide:

How to Avoid Liability


Primary Responsibility of Board Member:  Maintain and repair the common areas within your development while making a variety of decisions that affect the living conditions in your community.


Fiduciary Responsibility of Board Member: Act in the best interests of the association and use the care that an ordinary prudent person would use given the same circumstances.


Specific Fiduciary Duties:  

  • Execute contracts with vendors. Make sure contractor is licensed, bonded and insured.  Check references, and secure at least three bids for significant work or repairs.

  • Maintain adequate association, board member and officer insurance

  • Become familiar with CC&Rs and By-Laws

  • Maintain adequate reserves.  Know your budget and spend accordingly.  Example:  It may be excessive to suggest a $20,000 repair from reserves to roofing components in the second year of a development, when a warranty claim against the builder may be more appropriate.

  • Investigate construction problems.  The law requires that any condition which materially affects the value of the property, be disclosed.  Board members have a duty to investigate and disclose any construction problems.


Business Judgment Rule:  Exercise the same degree of care that a similar reasonably diligent person would under similar circumstances.  In doing so, the board is entitled to rely on information, opinions, reports or statements, which have been prepared or presented by qualified people, such as property managers, attorneys, accountants, board committees, and other board members/ homeowners who are reliable and competent in the matters presented.


Due Diligence:  Board members must make reasonable inquiry before making a decision.


 Tips to Avoid Problems:

  • Be diligent, do your homework, attend meetings, ask questions. 

  • Review board packets prior to meetings. 

  • Have a working knowledge of the topic before you vote on it. 

  • Solicit input from your professional manager – their education and experience provide a valuable resource.

  • Bring in outside experts for input/presentations before voting on an issue.

  • Talk to your community members.  Nothing keeps your fingers on the pulse of your community like casual interaction with its members.  You might learn more from a few minutes chatting at the mailbox than from an entire meeting.


If you think you have potential construction defects, contact Burdman Law Group for a free, no obligation inspection with a licensed contractor.


Tel. 888-350-9080


This material is for informational purposes only, and is not legal advice.  For specific legal advice concerning a particular fact situation, please consult an attorney.

Attorneys Representing Homeowners and HOAs in Litigation Involving

Construction Defect, Negligence, Contract, Misrepresentation, Real Estate, and General Counsel for Community Associations in California, Nevada, and Arizona.

Call (888) 350-9080


Burdman Law Group: Construction Attorneys serving San Diego County (Carlsbad, Encinitas, Oceanside, La Jolla, Poway, Chula Vista, Point Loma, North Park, UTC, Rancho Santa Fe, Scripps Ranch, 4S Ranch, Escondido, & Downtown); Orange County Construction Lawyers (Irvine, Fullerton, Tustin, San Clemente, Anaheim, Santa Ana, Aliso Viejo, Costa Mesa, & Yorba Linda); Los Angeles County Construction Lawyers (Downtown, Burbank, Cerritos, Claremont, Compton, Culver City, Duarte, El Segundo, Gardena, Glendale, Hawthorne, Hermosa Beach, Huntington Park, Inglewood, Irwindale, Lakewood, Lawndale, Lomita, Long Beach, Lynwood, Manhattan Beach, Monrovia, Montebello, Monterey Park, Norwalk, Palmdale, Palos Verdes Estates, Paramount, Pasadena, Pico Rivera, Pomona, Rancho Palos Verdes, Redondo Beach, Rolling Hills, San Dimas, San Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe Springs Road, Santa Monica, Sierra Madre, Signal Hill, Pasadena, Torrance, Hollywood, Westlake Village, & Whittier); Riverside County Construction Attorneys (Riverside, Corona, Menifee, Temecula, Hemet, Indio, Palm Desert, & Wildomar); San Bernardino County Construction Lawyers (Redlands, Fontana, Ontario, & Rancho Cucamonga); Clark County Construction Attorneys (Las Vegas, Summerlin, & Henderson); Maricopa County, and Pima County.


Burdman Willis: Construction Attorneys for Arizona, including: Phoenix, Scottsdale, Chandler, Gilbert, Mesa, Avondale, Glendale, Peoria, Sun City, Surprise, Prescott, and Tempe.


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