Ethical Standards Every Jamaican Strata Board Member Should Know

Volunteer board members in Jamaica’s strata corporations collectively oversee billions of dollars in real estate assets and maintenance funds, often with minimal oversight. Most serve without any written code of ethics, without a conflict of interest policy, and without procurement guidelines governing how they spend proprietors’ money. The results are predictable: a significant number of complaints filed with the Commission of Strata Corporations (CSC) involve allegations of self-dealing, conflicts of interest, misuse of funds, and favouritism in vendor selection. When the CSC has audited strata corporations, 88% were found to have violated multiple bylaws — and many of those violations trace back to decisions made at the board table.

Board service in a strata corporation is voluntary. It is also a position of trust. Under the Registration (Strata Titles) Act, the executive committee of a strata corporation is responsible for managing common property, collecting maintenance fees, maintaining insurance, filing annual returns, and enforcing bylaws. These are not ceremonial duties. They carry legal weight, and they demand ethical conduct.

This gap is a problem, but it is one that boards can address proactively.

What Fiduciary Duty Actually Means

Every strata corporation board member has a fiduciary duty to the corporation and its proprietors. This is not an abstract concept. It means, in practical terms, that board members must:

• Act in the best interests of the corporation as a whole, not in their own personal interest or the interest of a particular group of proprietors
• Exercise sound judgment when making decisions, using all available information and seeking professional advice when needed
• Act within their authority as defined by the Registration (Strata Titles) Act and the corporation’s bylaws
• Treat all proprietors fairly, without bias for or against any individual or group

Fiduciary duty is the foundation on which every other ethical obligation rests. Awarding a contract to a relative without disclosure, using maintenance fee funds for a personal expense, or selectively enforcing bylaws against one proprietor while ignoring violations by another — all are breaches of this duty. The challenge is that many board members view the role as informal, as a neighbourly favour rather than a legal responsibility. That misunderstanding is where problems begin.

Conflicts of Interest: The Most Common Ethical Failure

Conflicts of interest represent the single most common ethical issue in community governance. A conflict of interest arises whenever a board member’s personal or professional interests could influence, or could reasonably be perceived to influence, their decision-making on behalf of the corporation.

Common conflict of interest scenarios in strata corporations include:

The board member who is also a contractor. A member of the executive committee owns a landscaping company and wants to bid on the corporation’s grounds maintenance contract. Even if their bid is competitive, the conflict is obvious. They stand to benefit financially from a decision they have the power to influence.

The board member with a family connection to a vendor. A board member’s spouse works for the security company currently under contract with the corporation. When it comes time to renew or rebid the contract, the board member has a personal interest in the outcome that may not align with the corporation’s best interest.

The board member with developer or landlord interests. A board member appointed by the developer may prioritise the developer’s interests over those of proprietors, particularly during the transition period. Similarly, a proprietor who rents out multiple units may push for policies that benefit landlords at the expense of the broader community.

The solution to conflicts of interest is not to eliminate them entirely, as that would be impractical. The solution is disclosure and recusal. Every strata corporation should have a written conflict of interest policy that requires board members to:

1. Disclose in writing any personal or professional relationship with any company or individual that has or is seeking a business relationship with the corporation
2. Recuse themselves from discussion and voting on any matter in which they have a conflict
3. Record all disclosures and recusals in the minutes of the meeting

Without a written policy, conflicts of interest are handled informally, which is to say they are often not handled at all.

Vendor Procurement: Where Ethics and Money Intersect

Vendor selection is the area where ethical lapses most frequently occur in strata corporations. The amounts are substantial — security, grounds maintenance, elevator service, insurance, and building trades contracts can collectively represent millions of Jamaican dollars annually. Best practice in vendor procurement requires:

• Competitive bidding. For any contract above a defined threshold, the corporation should solicit at least three written bids from qualified vendors. The threshold should be set by the board and documented in a procurement policy.
• Transparent evaluation criteria. Bids should be evaluated based on predetermined criteria such as price, experience, references, insurance coverage, and scope of work. The criteria should be established before bids are solicited, not after.
• No gifts or gratuities. Board members should not accept gifts, meals, entertainment, or any other benefit from vendors or prospective vendors. This includes the holiday season, when vendor gift-giving is common and can create a sense of obligation.
• Arm’s length relationships. All vendor relationships should be conducted on a strictly professional basis. A vendor who is also a personal friend of a board member should be treated no differently from any other bidder.
• Written contracts. Every vendor engagement should be documented in a written contract that specifies scope of work, pricing, duration, termination provisions, and insurance requirements.

The reality in many strata corporations is very different: contracts awarded on personal relationships, a single quote instead of competitive bids, and vendors retained year after year without review. These practices erode trust and inflate costs.

Misuse of Corporation Funds

The misuse of strata corporation funds is not merely an ethical violation — it is potentially a criminal offence. Corporation funds belong to the proprietors, not to the board, the treasurer, or the property manager. Common forms of misuse include using petty cash for personal expenses, redirecting maintenance fees to benefit individual board members, awarding inflated contracts to vendors who provide kickbacks, and failing to maintain proper financial records that would expose such practices.

Under the Registration (Strata Titles) Act, strata corporations are required to file annual returns using Forms 13A, 13B, and 13C within 120 days of the financial year end. These returns include financial statements that should reflect how corporation funds have been spent. The fact that only about 12% of the roughly 1,300 registered strata corporations file these returns in any given year means that financial oversight is, in most cases, virtually nonexistent.

The CSC has the authority to conduct inspections with at least three months’ advance written notice. These inspections can include a review of the corporation’s financial records. Boards that have been sloppy with finances may face uncomfortable questions during such inspections, and proprietors who have been denied access to financial records can file complaints using Form 10 at a cost of JMD $4,000 per complaint.

Transparency: The Antidote to Misconduct

Transparency is the single most effective safeguard against board misconduct. Practically, this means:

• Open meetings. Board meetings should be open to proprietors except when discussing genuinely confidential matters. Dates, times, and agendas should be communicated in advance.
• Accessible financial records. Proprietors have a right to review the corporation’s financial records. Boards that obstruct access create an appearance of impropriety.
• Published minutes. Meeting minutes should be made available to all proprietors promptly, creating a record of decisions and the reasoning behind them.
• Regular financial reporting. Monthly or quarterly financial statements — not just the annual returns required by the CSC — allow proprietors to track income and expenditure in real time.
• Annual General Meetings. The AGM is the primary accountability mechanism under the Registration (Strata Titles) Act. Boards that fail to hold AGMs, or that conduct them as perfunctory exercises, undermine the entire governance structure.

Reporting Concerns

Every corporation should have a way for proprietors, staff, and fellow board members to report concerns about board conduct without fear of retaliation. At minimum, this means designating an independent point of contact — such as the corporation’s attorney — to receive complaints, and committing to investigate them promptly. When internal resolution fails, proprietors can escalate to the CSC by filing a formal dispute using Form 10.

Drawing the Line Between Service and Personal Gain

Board members are unpaid volunteers, and that can create a sense of entitlement to small perks — using the corporation’s contractor for discounted work on a private unit, for example, or receiving a free parking spot that other proprietors pay for. The best approach is a simple standard: if the benefit would not be available to you as an ordinary proprietor, do not accept it as a board member.

Practical Steps for Your Strata Corporation

If your strata corporation does not currently have ethical governance policies in place, here is where to start:

1. Adopt a written code of ethics that defines expected conduct for all board members. The code should be reviewed and signed by each board member annually.
2. Implement a conflict of interest policy that requires disclosure, recusal, and documentation.
3. Establish a vendor procurement policy that mandates competitive bidding for contracts above a defined threshold.
4. Create a financial oversight structure that includes regular reporting to proprietors and separation of financial duties among board members.
5. Document everything. Minutes, financial records, vendor contracts, and board decisions should all be maintained in writing and accessible to proprietors.
6. Hold the AGM. This is both a legal requirement and the primary mechanism for accountability. Use it.
7. File your annual returns. Forms 13A, 13B, and 13C are not just regulatory paperwork. They are a discipline that forces financial transparency.
8. Establish a complaint mechanism so that proprietors and staff can raise concerns about board conduct without fear of retaliation.

The CSC’s Role in Accountability

The Commission of Strata Corporations can conduct inspections, review financial records, and adjudicate disputes filed by proprietors — serving as an important external check on board conduct. The Registration (Shared Community) Act 2026 will extend similar regulatory oversight to gated communities that are not currently structured as strata corporations, making ethical governance standards relevant to an even broader range of residential communities. Boards that establish ethical practices now will be better prepared for this expanding regulatory environment.

Building an Ethical Culture

Ethical governance is not about catching people doing wrong. It is about creating an environment where doing the right thing is the default. Every board member should ask themselves a simple question before making any decision: if this decision were reported in full to every proprietor in the corporation, would I be comfortable defending it? If the answer is no, it is probably the wrong decision.

The roughly 1,300 registered strata corporations on the island collectively manage billions of dollars in real estate and maintenance funds. The proprietors who entrust their investment to volunteer board members deserve nothing less than the highest ethical standards.

---

FiWi Community’s platform helps strata corporations maintain transparent records, track financial transactions, and communicate effectively with proprietors, supporting the governance practices that ethical board service demands. To learn more, visit fiwi.community.