Fiduciary Duty of Board Members in a Las Vegas HOA: Board Members, Do Your Duty!

Upon becoming a member of the board for an homeowner association, you are expected to enforce and follow the guidelines set for the in the association’s governing documents (CC&R’s) and NRS 116.  In fact, the Nevada Real Estate Division (Office of the Ombudsman) requires that each board member sign, date and return a form (form 602) stating that you understand your CC&R’s and NRS 116 and agree to abide by them to the best of your ability.  So what are the fiduciary responsibilities of a board member in a Las Vegas homeowners association?  Below is a brief description of the duties of a board member.

In Nevada, the requirements of a fiduciary are outlines in NRS 116.3103 and NAC 116.405.

As a board member, your primary duty is to make decisions on behalf of your community or on behalf of someone else, being the owners within the association that you are a member of. Being a fiduciary requires that a board member be open, honest and diligent in their duties, stay informed and use sound business judgment when making decisions. A board member is legally required to put the general interests of the association above self-interest.

Basics of a Fiduciary:

  • Use the business judgment rule
  • Act on an informed basis
  • Use experts such as an attorney, accountant or licensed reserve study specialist
  • Use care when making decisions
  • Duty of Loyalty – avoid potential self-dealing conflicts of interest
  • Duty of Confidentiality – board members have access to privileged information that must be kept confidential
  • Always act within the scope of authority given to you

Other Duties of a Board Member:

  • Education – board members must stay informed of changing laws and general association business practices
  • Keep records of every act that you’ve made as a board member – this protects not only you, but the association as a whole

Prohibited Acts:

  • Acting for reasons of self-interest, gain prejudice or revenge
  • Commit an act that can be considered incompetent, negligent or grossly negligent

If you have any questions, please feel free to contact a member of the Shelter Management Group (SMG) team, we would be happy to help! Contact us at 702–818–4780 or info @ sheltermanagementgroup.com.

Article Authored By: Jamie Collins, Supervising CAM, CMCA, AMS agent at Shelter Management Group (SMG)