One of the most distressing issues confronting board members is how to comply with their fiduciary duty to shareholders and unit owners.
The board has a fiduciary duty to operate on budget, or, As a board member, he has a fiduciary duty to regularly attend meetings.
The essence of the fiduciary relationship is best described in a 1972 court decision which held that a franchisor owes a fiduciary duty to a franchisee:
...a fiduciary relationship is one founded on trust or confidence reposed by one person in the integrity and fidelity of another...the rule embraces both technical fiduciary relations (i.e. trustees, executors) and those informal relations which exist whenever one man trusts in and relies upon another...A fiduciary relation exists when confidence is reposed on one side and there is resulting superiority and influence on the other...
In the context of cooperatives and condominiums
, shareholders and unit owners invest their trust in board members by casting proxies and ballots in their favor at the annual meeting. As a result of this, duly elected board members have the power to enact and enforce house rules which profoundly impact residents' daily lives. In certain cases board members have the discretion to levy fines, withhold services, or deny access to building amenities
, all of which confers upon them sweeping powers over shareholders and unit owners.
Thus, board members are fiduciaries to the shareholders and unit owners who have elected them to their position of power. Accordingly, individual co-op and condo board members are strictly prohibited from self dealing to the detriment of their association
and its constituent shareholders or unit owners. They are also required by law to treat their shareholders or unit owners with meticulous fairness and equality.
So, my advise to you is to inform the board that they are in breach of their fiduciary duties by discriminatorily allowing some members to erect fences higher than other are allowed to erect fences.
That's it not good enough nor a member's duty to point out disparate treatment. But it's a clear breach of their fiduciary duties to not enforce the rules the same for all the members.
What I suggest:
- Document what you want to do;
- Notice the board of what you want to do;
- Notice the board that other members are in violation but nothing is being done
- Cite to the section of the documents or rule being violated;
- Inform the board that you will pursue your legal remedies if they don't address the issues and it's a clear breach of their fiduciary duty and they are discriminating against you;
- If they won't give you permission - retain local legal counsel to pursue legal action against them.
- Commence an action in court (after demand for pre-suit mediation if applicable) seeking an order requiring that the non-complying and/or offensive activity cease and for an award of the association’s attorney’s fees and costs for bringing the action.