could this be true, board doesn't have fiduciary duty

Is your condominium incorporated as a nonprofit corporation? If so then Texas Business Organizations Code Section 22.221 "General Standards for Directors" applies:
=======
"(a)
A director shall discharge the director’s duties, including duties as a committee member, in good faith, with ordinary care, and in a manner the director reasonably believes to be in the best interest of the corporation.

(b)
A director is not liable to the corporation, a member, or another person for an action taken or not taken as a director if the director acted in compliance with this section. A person seeking to establish liability of a director must prove that the director did not act:

(1) in good faith;
(2) with ordinary care; and
(3) in a manner the director reasonably believed to be in the best interest of the corporation.
=========

See https://texas.public.law/statutes/tex._bus._org._code_title_2_chapter_22

The requirement to act "in the best interest of the corporation" happens to be the definition of "fiduciary duty."

If your condominium is a nonprofit corporation and your condo's attorney missed this, then he's an idiot.

Laska

My sense is there is an underlying issue you have not identified. I cannot imagine you are just 'testing the water' regarding the definition of responsibilities and lack of explicit language regarding fiduciary duties of a Board in a Chapter 81 Association, especially if the Board is executing what appears to be fiduciary duties.

So, what is the real issue? You mentioned frustration with arbitrary application of rules and regulations, etc. Does the issue with your Board have something to do with that?

calm down everyone,,

i was in a depostion,, regarding the harvey recovery,,

I'm one of the main witnesses to post harvey( i wasn't on the board then)

During one of the breaks,,he and i were just talking.. I mentioned how it was so frustrating that some members of an hoa board don't even bother to read the documents, he said they aren't actually required to..

and then he went on to tell me ,, in fact,, your condominium board, the board of directors doesn't have a fiduciary duty to the hoa,(as defined by law)

He said the only real requirement is that they think they are doing what is best for the hoa.

Must have been a AWESOME responsibility.

Augustin's citation is exactly right assuming you're a corporation. I think most states have this same or similar code which I believe is also known as the business judgement rule or BJR.

Your complaint seems to be a problem re: (b) (2). Directors must have some understanding of their corporation's documents and /or seek the advice of experts in areas that are beyond her expertise.

It would be nice if HOA state statutes had something about fiduciary duty (I don't think there's anything specific in Indiana law either). However, I think people overthink HOA service - for me, it comes down to knowing your documents and applying careful thought to the issues, then making decisions that will benefit the ENTIRE community. Nothing an HOA board does should ever be a surprise to the community and you should be able to go to any board member, ask about an association issue, and get a complete and accurate answer.

You don't have to agree with all board decisions and it's true they will make mistakes (board members are human, like you and everyone else) but transparency is the key, along with knowledge. Sometimes our egos prompt us to make decisions out of anger or fear, which is never a good idea. Some rush the decision-making process and won't take the time to ask questions or do research, so they understand what's at stake. For others, ignorance is bliss - you don't always know what you don't know and make the wrong decision because of that. It's not enough to just read the documents - you have to MAKE time to learn something about budgeting, reserves, rule enforcement, etc. Someone said it best in a conversation on this board - the more you know about HOA issues and best practices, the more confident you will become in making decisions for your community. If you're not willing to learn or flat out ignore what you're told just because you don't like what's being said, take several seats and let someone else who's not as lazy as you take the wheel.

State statutes are a start, but it can't and shouldn't stop HOMEOWNERS from holding themselves and each other accountable. When you ask why board members go rouge, start by asking when was the last time YOU attended a meeting, read minutes and financial reports (and raise hell if people balk at giving them to you), or even took the time to get to know who was on the board. By only leaving it to the board members (who are homeowners like you) and not keeping tabs on them, why should you be shocked and dismayed when they (or even one or two) start thinking they can do what they damn well please because "we are the board and therefore we are?"

For me, my overall approach during my 10 years on the HOA board was - the decisions I make will ultimately affect my quality of life and/or my pocketbook, so if benefiting the entire community isn't motivation enough to do the right thing, the thought of being sued, a special assessment or seeing the community going into receivership and our property values drop to a minus number is enough motivation for me to do what responsible leaders are supposed to do. I don't need a state law or even the community documents to tell me how to behave - and most of the homeowners in my community are really apathetic,

Some need to read this:

https://www.associatedasset.com/hoa-resources/hoa-tips-blog/2019/7/5/fiduciary-responsibility-of-hoa-board-members/#:~:text=Recognizing%20that%20a%20corporation's%20Board,best%20interests%20of%20the%20HOA.

My understanding is that the property code prevails over the corporation code in condo and property associations but I would defer to the attorney. Chapter 81 does clearly apply to your condo association if it was established pre 1994.

Something to remember is that your attorney is referring to the law, not your moral responsibility. It would make it more difficult to sue a board member for not acting in the best interest of the community but, in most cases, will make no difference. There is still an ethical duty to act in the best interest of the community and there are other ways to hold you accountable if you misuse your office.

Our attorney has told me the same thing, though in Colorado to me as a layperson the laws seem clear regarding the fiduciary duty of the board member. In fact the regulating agency for the HOAs describes this in detail on their website and lists the specific expectations of the board members indicating deviation from these things could lead to breech of fiduciary duty. The way my attorney has clarified it is that the courts have come down to "willful and wanton" behavior. If the actions are willful and wanton then there is a breech of duty. The challenge he states is that there is no definition of willful or wanton, so it needs to be pretty clear that actions were willful.

I sent the attorney a question regarding our conversation,and here was his reply,i've redacted identifying information.

mr. lawyer,

I've been trying to reconcile what you told me last week regarding the the lack of fiduciary duty of our condo board..
when you said the board of our condominium don't have a fiduciary duty to the owners..
.. the board doesn't have a fiduciary duty to the owners/members of the condominium association. under the texas condominium act. (fiduciary duty does apply to condominiums covered under TEXAS UNIFORM condominium act though)

as directors of a non profit corp in the state of texas..doesnt the board does have fiduciary duty to the corporation(hoa )itself...

here is his response..

Lask**

There is no automatic fiduciary duty created or existing between an HOA board and its members except when section 82.103 applies – and 82.103 does not apply to The Pines. It does not change when the HOA is a Texas Non-profit Corporation. Most HOAs are Texas non-profit corporations. The only other exception that I know of is when an HOA board receives insurance funds as a trustee for an owner to do repairs under insurance, like a fire or hurricane damage. The day to day operation of an HOA and board decisions do not create a fiduciary duty. There are many Texas cases that so hold.

I hope this is helpful. Take care.

Sincerely Yours,

Uh huh. You could quote him back Texas Business Organizations Code Section 22.221 "General Standards for Directors." But unless your board authorizes you asking the HOA attorney questions, he does not have to respond. (If I were in his shoes, I would not respond.) I am pretty sure he will be unhappy with you debating him as well. Write him with any of the case law citations below, and you will incur his wrath. You are involved in a lawsuit as a witness. During the lawsuit, this attorney is obliged to aggressively advocate for the condominium and its board. To me, this would include denying that the condo board has any "fiduciary duty." This denial by the HOA attorney is based in his own fiduciary duty to aggressively advocate for his client.

If the issue of fiduciary duty goes to trial or a motion hearing, the two attorneys in front of the judge will debate the definition of "fiduciary duty"; what is in the nonprofit corporation statute; and so on. Anything can be argued in court, including, "The sky is red!" What the judge will rule is the question.

With regard to your condo attorney's claim that case law supports his position. He is making a legal argument. I would consider that a Texas Appeals Court in 2019 filed the following decision in a dispute between a condo owner and the condo's board. The decision references at length how Texas Business Organizations Code Section 22.221 is about fiduciary duty and does apply to condominium boards:

http://www.yettercoleman.com/wp-content/uploads/2019/05/2019-14-18-00128-cv.pdf (Texas Fourteenth Court of Appeals, O'Hern, Dooley, Green and Perryman vs. Mughrabi)

Also, Texas appeals courts have commented on how there is not an exact definition of "fiduciary duty." For example, from the Texas Supreme Court, decided in 2015:

"We have acknowledged that a precise, all-encompassing definition of “fiduciary duty” has proven elusive:

Fiduciary duties are imposed by courts on some relationships because of their special nature. We recounted in Kinzbach Tool Co. v. Corbett-Wallace Corp. that the “term ‘fiduciary’ is derived from the civil law. We recognized that it “is impossible to give a definition of the term that is comprehensive enough to cover all cases.” We said, “[g]enerally speaking, it applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction.” -- From https://cases.justia.com/texas/supreme-court/2015-13-0199.pdf?ts=1428332490

Numerous web sites state the following or similar about every single state in the U. S.:

"Because the state recognizes that this nonprofit corporation’s board members serve in a position of trust, every state’s law imposes a fiduciary duty on the board of directors. This law requires each member to act in the best interest of the corporation." https://www.ikocommunitymanagement.com/blog/legal-duties-of-hoa-board-members

"Under Corporate Law, the fiduciary duties of Community Association Board members are outlined by individual state corporate law. Most HOAs are nonprofit corporations, typically formed by filing Articles of Incorporation in the state in which the community is located. Recognizing that a corporation’s Board members serve in a position of trust, every state’s corporation law imposes a fiduciary duty on the Association (a.k.a. corporation’s) Board of Directors, requiring them to act in the best interests of the HOA." https://www.associatedasset.com/hoa-resources/hoa-tips-blog/2019/7/5/fiduciary-responsibility-of-hoa-board-members/#:~:text=This%20fiduciary%20duty%20applies%20to,within%20the%20scope%20of%20authority.



In my opinion, this attorney is either jerking LaskaS around or is aggressively advocating for his client in his chatter with LaskaS. LaskaS could ask him for his definition of "fiduciary duty." But for the reasons I gave above, I advise leaving it be.

augustine,

the trial coming up doesn't have anything to do with the boards fiduciary duty. It's a case regarding a contractor after harvey charging us for work that wasn't done and claiming they did more work then they did..

the conversation with the attorney came up because i'm constantly frustrated that board members take actions that are in clear violation of their fiduciary duty to the hoa.. and that's when he told me the board didn't owe the owners or the hoa a fiduciary duty.

LaskaS's condo is pre-1994, so it is not subject to the Texas Uniform Condominium Act. But for condos established in 1994 and later, the Act states:

==== Start Excerpt from Texas Uniform Condominium Act ===
Sec. 82.103. BOARD MEMBERS AND OFFICERS.
(a) ... Each officer or member of the board is liable as a fiduciary of the unit owners for the officer's or member's acts or omissions. ...
...
(f) An officer or director of the association is not liable to the association or any unit owner for monetary damages for an act or omission occurring in the person's capacity as an officer or director unless:

(1) the officer or director breached a fiduciary duty to the association or a unit owner;
...
=== End Excerpt ===

For condos established in 1994 and later, it appears to me that an individual condo member could successfully sue when a director breaches her or his fiduciary duty and other conditions are met, with the member winning damages (money) just for her- or himself. This is not so for pre-1994 Texas condos.

Maybe this is what your condo's attorney and the Texas Bar article mean.

Laska,

Options ...

1. Resign
2. Fight
3. Fight with attorney assistance
4. Move

Not sure anyone here can directly help you.

I am sorry, LaskaS. The aggravation of Hurricane Harvey's flooding your condominium complex; the incompetence of the board; the apathy of the membership; and the burden of a lawsuit where you do not get to call the shots, but you do get to pay the costs; would add up to one miserable living situation to me.

Laska,

You have posted several times on your situation - each seems to end with you musing about resigning.

Are you going to fix the problems?

Are you and your neighbors willing to commit the time and effort and money to do so?

regarding musing about resigning.

I have given so much time and effort and energy.. and a lot of progress has been made. However, it's become very toxic within the board itself. Mostly towards me. The kangaroo court decisions that are made are often made ,not because it was the right decision, but because it was the opposite of what i proposed.

I just don't need that crap. However. I've been told by many owners to never resign, because i'm the only one who will stand up for what's right.(their words, not mine)

If I resign, I am basically allowing the hoa to be run by board members who don't live in the community. They don't have the same concerns that residents have. Non resident owners and resident owners do share a lot of the same goals. But there are different priorities.

As a resident, I want the common areas to be maintained and a preventive maintenance schedule to be implemented.
Non residents are more concerned with keeping spending to a minimum , even if it means some ares don't get the attention they should.

There really is no way to "win". I just want to know what is going on. If i resign. There will be little to no way of getting information from the board . they will just ignore information requests.

I was in the same position as Tim was, one (experienced) board member up against two who wanted to do what they wanted to do. To make it worse, it was actually counterproductive to try to explain why things were done they way they were (those pesky CC&Rs, for example). I felt there was a higher chance of them stumbling across the right answer, rather than doing the opposite of what I said all the time. So I resigned, and I keep my nose completely out of whatever they're up to.

I feel that communities mostly get the boards they deserve. If owners aren't paying attention and the more skilled folks won't volunteer their time, one person can't do much to change that. I think that non-professional volunteer boards are the biggest flaw in the condo and HOA structure. Some states such as Florida have passed laws that maybe partially address the ignorance and incompetence of board members, but I suspect these laws only change things a bit around the margins.