BOD member and officer wants to hire sons firm as landscaper

I am president of a 40 unit townhome community in NC. We've been using the same landscaper for about 5 years now. He has proven to be reliable and very conscientious regarding his work, with a fair price that has never increased. In addition, he's performed out of scope work many many times without billing us. A number of times, I had to insist that he bill us and he does. Other than a few instances of things getting scratched or broken, there has been little complaint regarding his services (that I am aware of at least). I trust him to do what he says he will do and there have never been hassles working with his company.

One of our Board members owns 20 of the 40 units. At our last board meeting, she submitted a quote from her son's landscaping company and wants us to consider him. My biggest concern is that this is a conflict of interest as her son is also part of the LLC that owns the 20 properties and I stated as much. Her argument is that because he has a vested interest he would do a quality job. HIs price is $500/year higher than our current price and includes things that are usually considered add-ons (clearing parking lots from snow, seeding, pressure washing)

I don't see that as being automatically true, esp. given that they hold 50% of the member votes - the perception very well could be that Board member's get preferential treatment that benefit them financially, or that he could focus on his own properties at the expense of others, or even that there is no recourse to fire his company if he fails to meet our expectations.

This was not a scheduled topic for discussion and was just brought up as 'new business' There were mixed reactions among the other board members. The discussion was tabled for later because the bid was not blind, he knew what we currently get and pay and based his contract offer on that. Nor has the need to change vendors been previously discussed. We agreed to require a blind bid and get at least three including an updated one from our current landscaper.

I've read our bylaws and CCRs and could not find any language prohibiting Owners or Board member's family members from being contractors. I just have a very uneasy feeling about this and setting a precedent allowing it to happen.

Has anyone dealt with this before and are there any legal requirements regarding hiring family members?

Thanks Tim,

Our current landscaper's contract was for a year and has simply been continued uninterrupted ever since, because there has been no problem or request to change vendors. Would this be considered an automatic renewal or continued service on a monthly basis? His original contract ran from July to June.

I did read that in these kinds of situations, the relationship must be disclosed as such and as you state, that the Board member with the relationship must abstain from voting.

I just have qualms about owners providing contracted services.

I've read our bylaws and CCRs and could not find any language prohibiting Owners or Board member's family members from being contractors. I just have a very uneasy feeling about this and setting a precedent allowing it to happen.

Have you read the Articles of Incorporation, that is where our conflict of interest clause is.