What does "fiduciary duty" entail in property management?

Fiduciary duty in property management fundamentally refers to the obligation of the property manager to act in the best interest of the client, which is typically the property owner. This relationship is built on trust and confidence, where the property manager is expected to prioritize the interests of the client above their own. This means making decisions that enhance the value of the property, protect the owner’s investment, and ensure that the property is managed appropriately and ethically.

When a property manager fulfills their fiduciary duty, they take actions such as maintaining clear communication with the owner, providing accurate financial reports, and ensuring that all management decisions are made with the owner's goals in mind. This includes handling financial matters, tenant relations, and compliance with legal requirements with utmost integrity.

While minimizing operational costs, maintaining the property, and managing tenant marketing are all important aspects of property management, they do not encompass the full scope of fiduciary duty. These responsibilities are part of the property manager's role, but the essence of fiduciary responsibility is centered on loyalty and acting in the best interest of the client. Therefore, the primary focus of fiduciary duty remains the commitment to serve the client's interests effectively and ethically.