House painter owner & Board member

(Hopefully THIS response goes better than the last conversation!)

There's nothing wrong with the man sitting on the board, provided he understands and accepts that it wouldn't be appropriate for his company to bid on RFPs because he could benefit financially if he were to get the contract. Even if he refrained from voting on the vendor and stayed out of any discussion regarding any company, it would still look awkward if he won.

Appearances of a conflict can be just as bad as the real thing. I'd also be concerned about possible kickbacks from other companies if he pushed really, really hard for a specific business. To be fair to everyone, it may be time for your board to adopt a policy on conflicts of interest. You don't have to single this person out - any homeowner can wind up with a conflict of interest and you should have a protocol how to address it.

No as long as it's understood they do not represent nor are paid by the HOA to paint the house. Anyone is still allowed to own a business and be on the board. Why do you need to drop your livelyhood over it?

BTW: I had this at my former HOA. The ex-President had his own painting business. Many residents would hire him because he lived in the neighborhood. They knew him too. So it was no big deal if someone needed to paint their house to give him a reference. It was not a preference. We did not receive a benefit except to make sure it was painted to the right color. Which he as a board member should know.

Now... Having said that... Our Ex-President was quite the scumbbag. (I am being nice). He did try to trick the HOA into writing violations for those houses needing painting. The owner had a choice to paint the house or the HOA could paint it. IF the HOA painted it, then we could send the owner the bill. If the owner did not pay the bill, then we could file a lien for that money owed. We did not do "fines". Instead we had the rights to correct the violation and bill the owner.

This practice is an example of being unethical or at least questionable. I figured out his scam early. He was trying to get the money from the HOA and figured the HOA would get theirs later from the owner... Not a good plan. Instead we would just notify an owner they may want to look into painting. Send them the paint swatch colors. They could choose to use the Ex President if they chose. Otherwise, best to find their own painter. You can tell the ex-president was not my biggest fan me keeping him out of the HOA funds...

I agree with Shelia & Tim. There is NO conflict of interest for him to serve on the Board. But he must recuse himself from any topics around the business that he conducts. The Board would ask him to leave the room during discussion and voting.

He could even bid, and sealed bids, as Tim suggests, seem best. In CA Corporations code, he'd be an "interested director" in that he'd have a personal "interest" in the project. Again, he'd recuse himself and have no vote in the discussion or vote on this matter. IF his firm did get approved, as Sheila notes, it's very awe award to explain to other owners. The optics are lousy.

even IF in your docs, MichaelT, it most likely would be in your Bylaws, not your CC&Rs.

Maybe there's something in WA corporate code. Hmmmmm, whatever became of Steve of WA?

Let me pose this question or angle:

What if having a painting company owner as an active BOD member leads to pricing, services or "quality for the price" that greatly BENEFITS the HOA dues payers? I mean no funny business but serious project execution on terms that save the HOA based on the director/HOA connection.

I understand the impropriety of paying higher prices under collusion aka "a Hook Up," but what about the other way around? In my experience, if all things are equal, I'm putting my dues payers' wallet first.

Change your ccrs then