HOA glossaryBoard & governance

What is fiduciary duty?

The obligation a director owes the association to act loyally, in good faith, and with the care a prudent person would use.

Fiduciary duty is usually described in three parts. The duty of care requires being informed before deciding — reading the packet, asking for the reserve study, getting more than one bid. The duty of loyalty requires putting the association ahead of personal interest. The duty to act within authority requires staying inside the governing documents and the law.

It runs to the association as a whole, which is why a director elected by one faction still owes the same duty to every member. It is also why a director who personally opposed a properly adopted decision is nonetheless bound to support its implementation.

The duty is process-shaped more than outcome-shaped. Boards are not liable for being wrong; they are exposed for deciding carelessly, secretly, or in their own interest.

Why it matters to a board

Document the information a decision rested on. The record of how you decided is the substance of the duty.

Where the answer lives

Your recorded declaration and bylaws first, then the act that governs associations in your state. Whichever is stricter is the one that binds you.

Board Academy: fiduciary duty

Related terms

Board of directorsThe elected body that governs the association, holding all authority the governing documents grant to it and no more.Business judgment ruleThe principle that courts will not second-guess an informed, good-faith board decision made without conflict and within authority.Conflict of interestA situation where a director's personal interest could influence a decision they are being asked to make for the association.MinutesThe official record of what a meeting decided — the association's institutional memory and its primary evidence.D&O insuranceInsurance covering directors and officers against claims arising from their decisions in governing the association.Articles of incorporationThe charter filed with the state that brings the association into existence as a corporation, usually a nonprofit one.
General information, not legal advice. This entry explains what the term means, not what your association must do about it. Any notice period, cure window, fine cap, vote threshold or deadline comes from your recorded declaration and your state's act — those differ in all fifty states and are amended every session. Updated August 2026. Confirm the current requirements with an attorney licensed in your state before acting.
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