Condominium Associations: Duty Owed by Officers and Directors to Unit Owners

Pursuant to Texas Property Code Sec. 82.103, “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.” This means that each officer or board member has a fiduciary duty to the other members of the COA, that is, the unit owners. Additionally, officers or directors of COAs are 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; (2) the officer or director received an improper benefit; or (3) the act or omission was in bad faith, involved intentional misconduct, or was one for which liability is expressly provided by statute.” 

The combination of these two statues essentially indicates that officers and members of the board have a fiduciary duty to the unit owners, and that the officers and board members can be held liable for monetary damages if they breach that fiduciary duty. 

A fiduciary duty can be described as a responsibility of care, loyalty, good faith, honesty, full disclosure, and to refrain from self-dealing, among other things. At its core, this duty is essentially an obligation for one to pursue the interests of another over one’s own. Texas law has established that determining whether a breach of fiduciary duty has occurred is a fact-based question, meaning that the fact finder (judge or jury) will determine if a breach has occurred based on the factual circumstances.

Nonetheless, even if a director or officer may be said to be liable under Sec. 82.103(e) referenced above, a director or officer may still escape liability if such is provided for in the association’s declaration, bylaws, articles of incorporation, or other applicable statutes or regulations.

In conclusion, while the determination as to whether officers or directors of a COA have breached their fiduciary duty is highly dependent on the facts and circumstances, there is certainly some fiduciary duty owed by the directors and officers to act in the best interests of the homeowners. If you have any concerns that your COA has breached its fiduciary duty to you, it may be in your interest to contact us and schedule a consultation in order to determine if action should be taken against your COA.

Dallas COA Attorneys
Nacol Law Firm P.C.
(972) 690-3333

Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.