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
- 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)