HOA Board Member also works for Management Company

Started by DanielleL1 • 6 replies • 1185 views

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DanielleL1 (Florida)
Posts: 1

Posted:

In the community which I live in we have a board member that also works for the property management company that services the community. Her position on the board is treasurer which concerns me. Do you see this a conflict of interest?

Your comments and suggestions are greatly appreciated.

Thanks!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Our Treasurer position was also the owner of our accounting firm. We did not have a management company per se. However, found it very convenient for the Treasurer/accounting firm to be one and the same. She was a board member who would know if we were lying or not about approvals. Basically, she would be the first to notice that Board member A and NOT the President was asking for a check...

We had a 2 signee check system anyways. So did not matter much. However, I don't see much of a conflict other than it's more of a coincidence in some cases. There are others here who have a similar set up with their HOA's I am sure.

Former HOA President

TimB4 (Tennessee)
Posts: 21,062

Posted:

Danielle,

Conflicts of interest are not illegal providing those who make the decisions are aware of the conflict.

In my opinion, providing that the individual does not vote on awarding management contracts, I don't see an issue.

AugustinD
Posts: 5,144

Posted:

I feel there is at least an appearance of conflicts of interest. I think this dual board director-treasurer-property-manager-employee would have to recuse herself from too many votes to be useful as a director-treasurer. But unless your HOA has a Code of Ethics, and/or your governing documents or state law has words that permit her legal removal from the Board, then I think you are stuck with her.

My condominium HOA has a member who was on the board several years ago. He wanted to become the business/property manager. All agreed he had to resign from the board first, and he did. Then his domestic partner wanted to undertake doing the HOA's monthly invoices. The board agreed to hire her as an independent contractor. Many people are unhappy about both arrangements. But neither any law nor section of the governing documents is being broken, as far as I can tell. When seeming improprieties arise, they are mostly addressed.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Dan

It is a two edged sword. She can aid the HOA in being sure the MC does a good job for the HOA. The other is that the BOD must keep a close eye on their financials especially as relates to the MC.

Overall it could work well for the HOA.

SheliaH (Indiana)
Posts: 6,964

Posted:

Our former Board president took a job with our management company for a brief period, but had already resigned from the board. So, I might be ok with this ONLY if that board member wasn’t handling anything regarding our association. Otherwise, I don’t like the potential for a conflict of interest and would prefer that person resign from the board, as I wouldn’t (and shouldn’t) dictate who anyone’s employer should be.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JanetB2 (Colorado)
Posts: 4,219

Posted:

I know someone who is a BOD member and also works for the mgmt company; however, she refuses to work on her HOA's information that is handled by the mgmt company to avoid any conflict of interest.

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