Legal and Ethical Conduct
Fiduciary duties
Directors owe the association the duties of care, loyalty, and obedience to the governing documents and law. The business judgment rule protects informed, good-faith decisions made without conflicts, even if the outcome is poor. Trap: questions imply a director must vote as an owner rather than as a fiduciary, or that any conflict of interest voids a decision. Conflicts require disclosure and recusal, not automatic invalidation.
Ethics in practice
Confidentiality, honesty in communications, avoiding self-dealing, and refusing gifts that could influence decisions are core expectations in manager and director codes of ethics. Managers implement board policy; they do not make policy or enforce selectively.
Legal exposure
Know due process in enforcement (notice, opportunity to be heard, consistent timelines), fair housing obligations including reasonable accommodation requests, defamation risk in owner communications, records retention, and the manager's agency authority. Discrimination, harassment, and retaliation claims often arise from inconsistent enforcement, so document decisions.
Rule of thumb: Disclose → Recuse → Document. Any director with a personal or financial interest in a matter states it on the record, leaves the room for discussion and vote, and the minutes reflect both.
Worked example: A director's brother owns a landscaping firm bidding on the grounds contract. The director discloses the relationship at an open meeting, abstains, and steps out during deliberation. The board documents the disclosure, confirms the price is competitive with other bids, and approves. The decision stands; the failure to disclose would have been the violation.