Conflict of Interest Question

Started by JimH29 • 15 replies • 1137 views

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JimH29 (Florida)
Posts: 63

Posted:

A board member has posted an ad on the community bulletin board offering home services such as mulch spreading, sprinkler repair, etc.

In discussion with other community members, this subject came up. We are a 56 unit HOA in Florida where this member serves on both the HOA board and the Architectural Committee. In fact there are three HOA board members that also serve on the ARC. There have been other volunteers in the community that have been overlooked by the HOA board for appointment to the ARC.

I did not have an answer so here I am. Thanks in advance for the help.

SheliaH (Indiana)
Posts: 6,964

Posted:

I don't see the conflict of interest unless this board member is doing work for the association and no one else has a chance to bid on the work. As far as the architectural committee is concerned, I would expect this board member to excuse himself if the committee is considering a landscaping change from a homeowner who has hired him - not only is he prohibited from voting, I would have him leave the room when the issue is discussed so he wouldn't be able to ask questions or comment on the work, as that could influence the committee's decision.

I don't know why other committee volunteers haven't been appointed by the board - it IS the board's decision, although I would agree it's a good idea to rotate people in and out of that committee to keep ideas and perspectives fresh. Have you made that suggestion? If not, why don't you?

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

KerryL1 (California)
Posts: 14,550

Posted:

Sheila's remarks make sense to me. And I think she meant "recuse" instead of "excuse."

Arre you a board member, Jim? Your question isn't really clear to me.

JimH29 (Florida)
Posts: 63

Posted:

Sheilah: Thanks. Indeed I have volunteered as well as another resident in our community to serve on the ARC. The two of us are new to the community. I was successful in having the ARC meetings posted in advance as they were not in the past. There was a bit of resistance to this, but I was persistent. I also worked with the Treasurer, who at the time was not a board member, in regards to the Reserve Schedule as there was no line item for road replacement; other items were adjusted as well which the community applauded.

It has been an interesting journey...all I heard was that no one wants to volunteer but when two of us stepped forward we were dismissed. We both serve at the committee level.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I don't really see the conflict as long as that person isn't paid by the HOA. The HOA should only hire contractors with a license and insurance. Individuals who qualify with license/insurance and are members shouldn't be excluded from being hired either. The homeowner takes on their own risk if they decide to hire this individual if they are not licensed/insured. It should also be announced that this person work does not involve the HOA. If there is a problem, they go to that person NOT the HOA.

We had a person who did this in our HOA. Granite he was a con-man. Could not do much about people choosing to hire him. Just let them know he was NOT doing it on the HOA's behalf. If he did do HOA work, then it was within a small scope approved by the membership. It worked for us. It's just he would not be on my recommendation list personally...

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jim

If the mulching and sprinkler repairs are not the responsibility of the association, meaning the home owner privately pays for such, then I see no problem with the fellow soliciting work.

KerryL1 (California)
Posts: 14,550

Posted:

JohnC makes a good point.. If his work is only on individual lots and not the common areas, he may advertise. He just needs to make sure that he in no way says the "board" recommends him or "approved by the HOA" or any such language.

You not you serve at committee level, Jim. what kin of committee is it? Hav you actually written to the Board offering to serve on the ARC? Or just verbally volunteered?

KerryL1 (California)
Posts: 14,550

Posted:

JohnC makes a good point. If his work is only on individual lots and not the common areas, he may advertise. He just needs to make sure that he in no way says the "board" recommends him or "approved by the HOA" or any such language. We had s real to on our board who had ads on our bulletin boards and who even wore her firm's name piece to to board meetings and social events. I thought her motives for service were self serving, but there's nothing l illegal about. She resined before bore her term expired.

You note you serve at committee level, Jim. what kind of committee is it? Have you actually written to the Board offering to serve on the ARC? Or just verbally volunteered?

JerryD5 (Colorado)
Posts: 218

Posted:

I don't see a conflict of interest either unless the board member uses his position to get business. Im in a similar situation. Im a board member and I have a small business of dog walking/pet sitting. I have 2 clients that are also homeowners (one was a previous client that moved into the association and other is a fellow board member that joined the board and then got a puppy). I ensure I keep my business interests and the HOA interests separate. I don't advertise and don't actively solicit clients in the HOA. I walk the HOA property routinely while I am walking my client dogs. Plus it is a good way to meet a lot of the homeowners.

TimB4 (Tennessee)
Posts: 21,062

Posted:

I also do not see this as a conflict of interest.

I suspect that if the individual was not on the board, this posting of the advertisement wouln't even be brought up.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

There is a legal battle going on in one SC HOA centered around the letting of a new PM contract to a PM company owned by one of the HOA owner/member. One of the objections raised by the present PM looking to keep their contract with the HOA was the fact that as the new PM owner lived there, it could cause conflict. I say a weak reason but it scared some of the BOD Members and at the last minute they pulled the new contract back and are staying with the present PM.

See the headlines on the first page of this site. It gets even stickier.

The new PM would have been the same one we use and we are very satisfied with their performance.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By JimH29 on 03/31/2018 5:28 AM
Sheilah: Thanks. Indeed I have volunteered as well as another resident in our community to serve on the ARC. The two of us are new to the community. I was successful in having the ARC meetings posted in advance as they were not in the past. There was a bit of resistance to this, but I was persistent. I also worked with the Treasurer, who at the time was not a board member, in regards to the Reserve Schedule as there was no line item for road replacement; other items were adjusted as well which the community applauded.

ARC meetings need to be open with a 48-hour notice posted in advance. The statute FS 720 explicitly mentions that committees that make architectural decisions must abide by the same meeting rules as the board.

Sounds like you're doing a good job so far. Boards seem to not care what the law says when it suits them. Our president last year was on the street arguing with an owner and was heard to bellow at the top of his lungs, "I DON'T CARE WHAT THE LAW SAYS!" Beyond that, at least we knew where we stood with him. Other board members over the years think the same way, they just don't go around saying it out loud.

JimH29 (Florida)
Posts: 63

Posted:

KellyL1: Lawn Care Committee, Gate Committee and Budget Committee.

I verbally told the Nominating Committee of my interest in serving on the ARC. The nominating committee presents a list of names to the HOA board for the board to appoint to the ARC.

BenA2 (Texas)
Posts: 1,273

Posted:

I don't see a conflict in posting and providing home services but there could be a potential conflict in board members serving on the ARC, if your board hears appeals for ARC decisions. I don't think it would be a problem as long as the board members recused themselves on appeals and you did not have so many board members on the ARC that it would give the impression that an appeal was worthless because it is all the same people who made the original decision.

KerryL1 (California)
Posts: 14,550

Posted:

How many directors are there total, JimH? anyway, with your good experience, on other committees, it seems you certainly could contribute on the ARC. Or even on the board.

Do your bylaws say that the "Nominating Committee" submits names to the Board for Committee service???

JimH29 (Florida)
Posts: 63

Posted:

KerryL7: There are 5 members on both the HOA board an the ARC committee.

This HOA has approximately 15 committees...a gate, communication, welcome, clubhouse, pool and nominating committee to name just a few. There is no mention in the bylaws or covenants of the committee or structure of such.

In the past I have been an HOA president of a 50 unit single family development an it is like night and day.

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