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RichardD17 (Florida)
Posts: 7
Posted:
I am in Florida. Can anyone tell me if they have come across a situation where related parties (husband and wife) have been one the Chairperson of the Board of Supervisors of the Community Development District, (CDD)and the other the President of the Homeowners Association? (HOA)
I do not purport to be an expert, hence my inquiry, but to me there is at least an implied conflict of interest since the CDD provides services and public facilities used by residents, controlled by those who use them, and paid for by assessments and fees. The HOA seems to have a very similar charge and in our case the CDD still owns property in the community, ie. Community Center, pool, boat docks, and their interaction therefore would be assumed to be quite close. I find it very possible and logical that conflicts could arise when one related party is deriving financial benefit from the CDD.
But I am asking the question, and am interested all sides. Thank you in advance for your anticipated constructive comments.
SheliaH (Indiana)
Posts: 6,964
Posted:
This community development district sounds like some sort of government agency - is it? If so, how does one get on the board? If appointed by the general public, that would include people who don't live in your HOA, so I don't see a conflict on its face. If, however, the CDD was voting on something that would have a direct impact on the HOA, I would expect spouse #1 to abstain from voting. If the CDD controls operations of the community center, pool and what not, I'm not sure how the HOA president would benefit financially.

The homeowners vote for the HOA board and I imagine the board then votes for officers. The president is one vote, so spouse #2 can be outvoted on something if the CDD is doing something the others don't like. And if the homeowners are dissatisfied with the president, they can vote spouse #2 out in the next election or even do a recall.

So it depends on the issue. If/when something comes up, you might attend the appropriate meeting (CDD and/or HOA) and express your concern at that time.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Like my wife cannot be the mayor of a town where I am the President of our HOA because we pay taxes/interact with that town. Come on. Be reasonable.
KerryL1 (California)
Posts: 14,550
Posted:
I'm with John! Wee have one director who serves on several city advisory boards, etc.
DouglasK1 (Florida)
Posts: 2,046
Posted:
If both positions are elected, then it would be up to the respective voters to determine if they feel comfortable with that situation. As Sheila mentioned, there might be specific decisions where one or the other should abstain if a conflict is likely.

Escaped former treasurer and director of a self managed association.
KerryL1 (California)
Posts: 14,550
Posted:
Can someone provide examples of what "specific situations" would create this "conflict?"

Would anyone care to actually define "conflict of interest?" this topic has come up quite a few times on this forum and usually th bases for concern is a misunderstanding of "conflict of interest."

Should no director in an HOA serve the larger community? Look, we have one director who serve on many local muni boards.
RichardD17 (Florida)
Posts: 7
Posted:
Thank you all for all your interest and your comments. Like me, most of you are simply striving for the right answer. Personally I do not know the legality of the issue I propose, though I hope to learn. From purely a common sense perspective, having one spouse the Chairman of the Board of Supervisors of the CDD and the other the President of the HOA, in the same community, would appear to have the resultant effect of frustrating the 'one vote, one property' goals. Additionally, such nepotism has the appearance of, and could result in, abuse via a kind of doubling down effect on influence pedaling within the Community.
Thank you again for your input and I remain in search of the answer. Keep up the replies. I am very interested in your thoughts and perspectives.
SueW6 (Michigan)
Posts: 814
Posted:
Unless one or the other is required to make a decision involving the other one, specifically a monetary one, then there is no conflict.

Either one can recuse themselves from ANY decision involving the other, but you have not given a sample scenario to consider.

How are the paths of these two people crossing? Be specific.

KerryL1 (California)
Posts: 14,550
Posted:
"Common sense" often is wrong, RichardD and also often is simple speculation based on no knowledge. Your last post, I have to say, makes no sense to me. Why not look up conflict of interest??

Sue's observation," Unless one or the other is required to make a decision involving the other one, specifically a monetary one, then there is no conflict,"is a good summary.
RichardD17 (Florida)
Posts: 7
Posted:
To KerryL1 : A situation that has the potential to undermine the impartiality of a person because of the possibility of a clash between the person's self-interest and public interest.
KerryL1 (California)
Posts: 14,550
Posted:
Again I ask, RichardD, what is an example --of the clash between personal benefit & community interests that could possibly occur in the situation you've presented?
RichardD17 (Florida)
Posts: 7
Posted:
To KerryL1: Do you have an understanding of a Community Development District (Florida Uniform Community District Act of 1980)and how it works in concert with the HOA? If so, can you please describe it to us?
If you lay them side by side perhaps that will support your understanding as to why the two bodies would not intentionally be designed such that both might be controlled by the same entities.
JeffT2 (Iowa)
Posts: 880
Posted:
You might want to look at the Florida Nonprofit Act for conflict of interest, which I copied below. From this perspective, interest means financial interest, and a conflict-of-interest transaction refers to things like a director seeking to give a contract to his wife's company.

If there is no financial gain to the individuals, then it is probably just politics. What financial benefit do you see for these individuals? Maybe it is a good thing?

Florida 617.0832 Director conflicts of interest.—
(1) No contract or other transaction between a corporation and one or more of its directors or any other corporation, firm, association, or entity in which one or more of its directors are directors or officers or are financially interested shall be either void or voidable because of such relationship or interest, because such director or directors are present at the meeting of the board of directors or a committee thereof which authorizes, approves, or ratifies such contract or transaction, or because his or her or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the board of directors or committee which authorizes, approves, or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors;
(b) The fact of such relationship or interest is disclosed or known to the members entitled to vote on such contract or transaction, if any, and they authorize, approve, or ratify it by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the corporation at the time it is authorized by the board, a committee, or the members.

(2) For purposes of paragraph (1)(a) only, a conflict-of-interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board of directors, or on the committee, who have no relationship or interest in the transaction described in subsection (1), but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no relationship or interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director having a relationship or interest in the transaction does not affect the validity of any action taken under paragraph (1)(a) if the transaction is otherwise authorized, approved, or ratified as provided in subsection (1), but such presence or vote of such a director may be counted for purposes of determining whether the transaction is approved under other sections of this chapter.

(3) For purposes of paragraph (1)(b), a conflict-of-interest transaction is authorized, approved, or ratified if it receives the vote of a majority in interest of the members entitled to vote under this subsection. A director who has a relationship or interest in the transaction described in subsection (1) may not vote to determine whether to authorize, approve, or ratify a conflict-of-interest transaction under paragraph (1)(b). However, the vote of that director is counted in determining whether the transaction is approved under other sections of this chapter. A majority in interest of the members entitled to vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section. As used in this subsection, the term “majority in interest” refers to a majority of the voting shares or other voting units allotted to the members.
RichardD17 (Florida)
Posts: 7
Posted:
Thanks JeffT2, I already have the info you forwarded but thanks anyway. We are talking here about not one (1) but two (2) Non Profit Corporations that have a close relationship, as well as congruent responsibilities to hundreds of residents.
Perhaps it is the words "Conflict of Interest" that gets the hair up on the back of our necks. It is of course always thought of in legal terminology and associated with monetary benefit. Other benefits however, in the case of public officer holders, can be derived through satisfaction of personal interests and through influence. Perhaps politics is a good analogy. After all, politics relates to individuals hoping to gain influence and power.
What I am describing are two entities, which the control money and the access to amenities to many people. Two entities, both prescribed by law, with very similar responsibilities, supporting a community where equal rights (one vote one property) is the cornerstone.
As I began this thread I used Conflict of Interest for lack of a better term, but I did also use the phrase of "doubling down on influence peddling". There are many things in this world for which there may be a "right" but it does on make them right. In a community, where many people live, influence, power and personal agendas have no place.
Yes, I have specific instances where property owner's disagreement with one entity has tainted the cooperation of the other, but this forum is not the place for "specifics". I was in hopes a Florida community involved with a CDD as well as an HOA would see my post and have some real life experience.
Thank you all for your input. I can see where this forum can be a great tool.
JeffT2 (Iowa)
Posts: 880
Posted:
Florida 617.0830 General standards for directors, says that a director shall discharge duties in good faith and in the best interests of the corporation, among other standards. Have you seen it?

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