Real Estate Agent and HOA Manager

Is there a conflict of interest if a broker/agent is also the hoa/coa manager. Can part of their management contract/payment arrangement be that they have exclusive right to sell or rent units?

There could be.

It could be I suppose. But this to me could also be the source/cause of the conflict of interest.

In theory a broker/agent who has exclusive rights to sell/rent units has a vested interest in decisions made by the Board and the activities that they carry out as HOA manager and the manner in which they carry out those activities.

Also, I think this might violate anti-competition laws in some states if not federal law.

I agree with Cathy's comment, "What about sellers' right to choose the broker with whom they want to deal? How do you plan to enforce the broker's exclusive right if homeowners are not party to the contract with the PM?"

I also would ask, if the governing documents don't give the HOA the authority to do this how could this possibly be kosher?
In my neck of the woods you can negotiate the Real Estate commission and I would not want to give up this ability.

The more I thought about it, the more I've decided that this is a legal deal breaker as John says. And what about the folks who want to do a For Sale by Owner? Is the HOA going to tell them that they can't? Good luck with that.

There are other practical difficulties. For instance, what if there is an emergency that requires prompt attention from the PM (eg. a broken water pipe), and the PM is out showing homes or attending a closing? What happens if delay results in more extensive damage? Which of the two will the PM regard as their primary job, with the other a part-time "get to it when you can" job? It's likely that the HOA would draw the short straw.

This arrangement could work if the HOA is just looking for a bookkeeper, which truly can be a part-time "get to it when you can" job. But you still have to ask what benefit hiring a realtor would provide over hiring a regular bookkeeper.

It still looks to me that the realtor/PM benefits more than the HOA in the proposed arrangement, which makes it questionable even if there is no conflict of interest - and once money is involved, then a conflict of interest is inevitable.

I recently saw an article about a court case in California (about a different issue) in which the court ruled that an association can't add a restriction that was not in force at the time the owner bought the property. (This raises questions about amending CC&Rs in general, but that's a topic for another time. I suspect nuance and details were involved.)

Anyway, an arrangement like the OP suggested *may* be OK if it existed from the beginning and buyers understood that this is what they were getting. It may work in communities where the HOA has a right of first refusal for buyers and tenants, but many HOA/COA CC&Rs don't allow that level of intrusiveness.

I have never believed that a company that specializes in rentals and real estate sales should be managing HOA's, at least under the same roof or corporate name. What if the owner was using the management company to manage their unit as a rental with the same company that the MC is also managing. It is quite possible that the property manager of the HOA doesn't know about the arrangement with the landlord. Generally, they are not up to speed with HOA laws in their specific states, as I know this is common in California.

If there is a clause in their contract about exclusive selling rights, that is on the Board and/or the attorney. Should never be allowed, although I coud see this in a developer situation.