Community Living: Board Members Take Care To Exercise Your Duties
Recently, the tragic and shocking collapse of the Surfside condominium in Florida has made national headlines. This truly devastating event left many questions unanswered regarding the causes of the collapse. News reports have indicated that in the years leading up to the collapse, the Board of Directors for the condominium had become frustrated by internal turnover and infighting, while the condominium association owners could not agree on paying for significant and necessary building repairs. Though eventually passing a repair plan, contractors did not complete the repairs at the time of collapse. Whether these repair issues had anything to do with the collapse, however, remains unknown.
The event does highlight an at least hypothetical scenario in which an extreme outcome can arise due to the struggles that the Board members face in their duties to the condominium association. It is no secret that Board members, who are often volunteers, address serious issues when attempting to govern their association of owners. Additionally, besides making complex decisions and trying to do their best for their fellow homeowners, Board members face liability from aggrieved homeowners if they fail to properly exercise their duties. When coupled with the need to make significant decisions, such as balancing the risk of serious maintenance issues with costly repairs that some owners may not be able to afford, the stakes elevate to an extremely stressful degree.
In Washington State, Board members must follow certain standards in the exercise of their duties. For condominiums created before July 1, 2018, the Board of Directors must follow RCW 64.34.308, which imposes a fiduciary duty to the owners for Board members appointed by the developer, and a duty of reasonable and ordinary care for Board members elected by the owners. A fiduciary duty is a very high standard, with an obligation of good faith and an obligation to deal fairly and give equal consideration to the interests of all to whom the fiduciary duty is owed. More typically, the owners elect Board members, and these Board members have a less stringent duty of reasonable and ordinary care. For condominiums created after July 1, 2018, RCW 64.90.410 governs instead, and requires Board members to exercise the duty of loyalty and care similar to the standards required of officers or directors of a corporation.
Board members can properly exercise their duties in a variety of ways depending on the circumstances, but as a general guide, Board members will want to at least follow their governing documents, hold regular meetings, not engage in self-dealing, make sound business judgment decisions based upon informed research, and enforce the association’s governing documents fairly towards all owners. While properly exercising duties will depend on the facts of each matter, Board members must always ensure that they have the best interests of their association in mind, even if heated arguments may sometimes ensue as a result.
If you are a Board member at a condominium association, and you need guidance with community governance, the attorneys at Beresford Booth PLLC remain willing and ready to help you. Please contact Beresford Booth at email@example.com or by phone at (425) 776-4100.