NDA

Started by KurtG1 • 3 replies • 1841 views

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KurtG1 (Texas)
Posts: 30

Posted:

I noticed in the meeting minutes of the last HOA meeting that the MC asked the board members to sign non-disclosure agreements. I have asked what the nature of the NDA is and why the MC felt the need for them but have not gotten a response yet. Is this a common practice and under what circumstances would the MC need the board members to sign one?

DanielH1 (California)
Posts: 482

Posted:

Management companies don't want their competitors (other management companies) to look at and imitate their proposal materials, documents, forms and contracts.

Most likely, the NDA is for this purpose.

KurtG1 (Texas)
Posts: 30

Posted:

If that were the case then shouldn't the NDA requirement have been part the contract between the HOA and the MC? As I understand it, the contract is between the board members individually and the MC. What if the board changed and the new members did not want to sign the NDA. What impact could this have when we change management companies? If the NDA were between the HOA and the MC then new board members would be covered by the agreement.

DanielH1 (California)
Posts: 482

Posted:

Confidentiality agreements are one of the most common of legal documents. They tend to get thrown around a lot. People are told to get signatures but, since they aren't lawyers, they just get whoever to sign. The documents often even have a fill-in-blank for the names. They are often presented for show or as a feel-good measure. Even without a document, you are legally bound to keep confidential information as confidential, if you know that it is confidential.

It might make more sense to the management company to have the HOA sign as a whole, not as individual Board Members. But, that's going to be a lot more work: getting the Board to have a meeting, take a vote and bind the entire HOA to an NDA. It might not get done and the management company would have to decide whether keeping confidentiality was worth breaking/not getting the contract. (Uh, no.)

Enforcing NDAs is really difficult anyway so it's unlikely to ever become an issue.

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