Dec. 31, 2025, 6:15 a.m. ET
- A fiduciary duty requires condominium board members and officers to act in good faith and in the best interests of the association.
- Florida law outlines specific operational requirements for boards, including prohibitions on self-dealing and mandates for financial controls.
- Community association managers are considered agents of the association and must act loyally, honestly, and with full disclosure.
Q: Can you explain what “fiduciary duty” means for a condominium board member and managers? (M.S., via e-mail)
A: Section 718.111 of the Florida Condominium Act explicitly states that officers and directors of the association have a fiduciary relationship with the unit owners in the condominium. The statute goes on to say that directors and officers must act in good faith, with the care an ordinary prudent person would exercise in a similar position, and in a manner reasonably believed to be in the association’s best interests, incorporating the applicable state law. Similar language appears in the statutes for homeowners’ associations and cooperatives.
The Florida Condominium Act also sets out specific operational requirements that flow from the fiduciary relationship. These include: (1) prohibitions on self-dealing and kickbacks, with criminal penalties and mandatory removal for violations; (2) strict conflict-of-interest procedures, including disclosure, recusal, and member cancellation rights for conflicted transactions; (3) requirements for board voting and meeting minutes; (4) mandates for financial controls, such as fidelity bonding for those handling association funds, prohibitions on commingling funds, and restrictions on the use of association debit cards; (5) duties to confirm that community association managers are properly licensed before contracting; (6) obligations to maintain and provide access to association records, with criminal penalties for willful violations.
In discharging their fiduciary duty, directors and officers are permitted to rely on information from competent officers, professionals, or board committees, unless they have knowledge that makes such reliance unwarranted.
Florida law provides qualified immunity for association officers and directors, shielding them from personal monetary liability for management decisions unless their breach of duty involves criminal conduct, improper personal benefit, recklessness, or bad faith. The corporate statutes define “recklessness” as the conscious disregard of a known or obvious risk likely to cause harm.
The law for managers and management companies is a bit more amorphous. Section 718.111(1)(a) of the Florida Condominium Act states that the existence of a fiduciary relationship between managers and unit owners is neither created nor removed by the statute; rather, it begs the question. Managers are held to professional standards, some rather strict, in the statutes that regulate their licensure and discipline.
Community association managers, often referred to as “CAMs,” are generally considered agents of the association. As such, they must act loyally, skillfully, diligently, honestly, and in good faith, with full disclosure and proper accounting. Section 468.4334 of the CAM regulation statute provides that managers must avoid unreasonable fees, promptly return association records upon contract termination, and are subject to penalties for willful noncompliance.
Section 468.4335 of the same statute outlines that any activity by a manager that may reasonably be construed as a conflict must be disclosed, and conflicted transactions require certain actions including competitive bidding and detailed notice. Violations can result in voidable contracts, termination of management agreements, and penalties against the CAM, including license suspension or termination.
Q: What are the different legal forms of condominium development? (B.S., via e-mail)
A: There are many. The most common is a single condominium consisting of a property regime where all units and common elements are governed by one association and one declaration of condominium. To make matters a bit more complicated, Florida law permits the development of single condominiums in “phases.”
Often confused with phase condominiums is the “multicondominium.” These are defined as real property containing two or more condominiums, all operated by the same association. To complicate matters a bit further, the statute also allows multicondominiums to operate under a consolidated declaration of condominium.
The law also distinguishes between residential and non-residential condominiums, sometimes also called commercial condominiums. Mixed-use condominium contains both residential and commercial units.
Recent statutory amendments authorize what is referred to as a “condominium within a condominium.” These are specialized legal structures used to further subdivide property after initial development, most often in the commercial context.
“Master condominium associations” typically arise in developments with multiple condominiums with their own associations, often called “sub-associations.” Master condominium associations often manage shared amenities serving multiple condominiums.
The law also recognizes “land condominiums,” sometimes called “landominiums,” where a “lot” or other subdivision of real property is the “unit.”
“Timeshare condominiums” are another subcategory of condominium development.
It is important to understand the legal nature of any particular condominium development. While there are some “one size fits all” sections of the statutes that apply to all condominiums, there are specific rules that apply to each type of condominium recognized by the law.
Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.
