Board President using family members as vendors

Started by JonnielynnD • 47 replies • 855 views

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JonnielynnD (Maine)
Posts: 11

Posted:

Hello. My Board President has used her sons as vendors for maintenance and repairs in our Association. They took the checkbook from the, then Treasurer, and wrote the check to their son and signed it. They stated they could not get another vendor and that it was an emergency (some shingles fell of the roof during a storm but there wasn't a leak in the unit-many feel it could have waited) They also stated that since it was just under $500.00 the bylaws state they have spending authority for that amount and they didn't need to get permission from anyone else. They continue this practice. In addition, the association is using a family member's landscaping company and their services are approximately 52% of our entire budget.

These family members are good workers. The President did not know this was a conflict of interest. We are a very small community but live in a busy area with more than enough vendors. I've done some online research wherein all of the sites state that there is a conflict of interest in using a board member's family as vendors and the Board member should a. recuse themselves from all voting and financial processing (which is now part of our newly incorporated policies and procedures) or step down from the board if we continue using that family member. We have already decided not to use the sons but are torn about the landscaping company.

The President does not want to follow these new procedures because they are not in the Bylaws, but are a practice that received an unanimous affirmative vote on at an annual meeting. Does anyone have any ideas as to where we can go for guidance on this subject? Thank you so much

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Well is anyone else researching vendors that would be better? that is the first step.
the next step is finding someone to do hours of free volunteer work to be the president since you stated he/she/thye aren't playing along even though the community voted in this policy at the last meeting. Any president that doesnt' do what the community wants should be voted out.

maybe you could run as president and solve everything?

vis ta vie

JonnielynnD (Maine)
Posts: 11

Posted:

I was voted in as Treasurer and we are a very small community. No one wants to step up and be President. As Treasurer, in our new procedures, we state the Treasurer will handle all fiscal issues including getting quotes, paying bills, financial reporting, etc. I will not handle the mail, and the President collects all deposits and transfers but has no input into our accounting system.

So yes, we are doing that but it is a struggle. I just need to know where to get confirmation that this is a conflict of interest (nepotism), and shouldn't occur. I also need to know what the President should do if we want to keep their family member as a landscaper because they've been doing it for years and started prior to the President even moving here. Should they recuse themselves from vendor and fiscal responsibilities? Or, should they step down? I'm requesting an audit as well. They've never done one.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

As long as they are licensed and insured I see no problem.

When I hear situations like this it reminds me of the story of two barbers. They live on a island where only 2 barbers live. One barber has messy hair and the other is nicely trimmed. Which barber do you go to? The one with the messy hair... He is the one cutting the other barbers hair...

So if you have a good contractor available and meets the criteria, why not hire them because they are "friends or relatives" of a board member? That to me is not a reason not to hire the best contractor...

Former HOA President

JonnielynnD (Maine)
Posts: 11

Posted:

thanks for the story about the barbers. It doesn't help but I appreciated it. I'm pretty certain, its an issue. I don't think this forum is going to help me but I thank you. I thought id give it a shot.

NA1 (Massachusetts)
Posts: 190

Posted:

It's really bad optics. Its amusing how often that isn't understood.

MichaelT21 (Arkansas)
Posts: 200

Posted:

Our community really struggles getting handyman style vendors to do small jobs for us. It's unfortuante.

I've been poking around to see if we could hire any of our homeowners to do the work. They have to be licensed, bonded, and insured, and we don't have a lot of homeowners in our community that we could hire for this type of work.

In the absence of hiring professionals, I would be the one do the work. Replacing shingles on a roof is not a task that I would do; but we do not have HOA owned roofs in our neighborhood. Some Board members have objected to me doing work in the community for free but they have been unable to provide the name of a vendor we could hire to do it instead.

BillH10 (Texas)
Posts: 1,217

Posted:

JonnielynnD

You may or may not have a conflict-of-interest problem; your on-line research apparently has not drilled down into the nuances. However, you have identified an issue which must be addressed.

"The President does not want to follow these new procedures because they are not in the Bylaws but are a practice that received a unanimous affirmative vote on at an annual meeting."

Unanimous votes at annual meetings, as an affirmation of a concept are nice, but they do not hold water if they are not properly enacted under the Bylaws and Declaration of the Association. Based on your description, your President is justified in taking the position he or she has.

Most documents I have seen empower the Board to establish rules and processes for the orderly management of the Association; those rules must be approved during a meeting of the Board, published to the owners, and, in some states, must or may be filed with the County Clerk. The "affirmation" does not meet that criteria.

I am not an expert in conflict of interest. I do know an actual conflict of interest does not automatically exist if a family member is used as a vendor, although you are correct the elected official must recuse him or herself from all discussions, consideration of the vendor, remuneration for services, etc. Recuse means leaving the room, not just sitting silently.

A conflict of interest exists if the relationship is not fully disclosed, and appropriate recusal and other protections are not put in place. I agree, optics are not necessarily the best when family members are used, no matter how transparent.

I recommend you obtain advice on how to proceed--the attorney for the association would be a good place to begin.

Taking the checkbook? How? By force?

MarkM19 (Texas)
Posts: 1,459

Posted:

Bill,
I think the fact that she mentioned that the family member has done the landscape work in the community before the President was on the board is important. That means to me that the contract was already awarded and is now just honoring past board's decision. Paying the person to fix the roof is another topic and could very well be a conflict.

I am wondering if it was known that she was related to the vendor when she ran for office? There is a lot we do not know about this HOA like is anyone else out there that wants this president's job. If the vendor is doing a good job my opinion would be to move on.

JonnielynnD (Maine)
Posts: 11

Posted:

This is very helpful. Thank you very much. I am calling our lawyer. The President is a good one. They are just unsure of the nuances. We are incorporating the procedures into our bylaws. We are also doing an audit just to ease everyone's minds. I really don't think there is an issue as long as they recuse themselves from voting on the vendors. We are getting 3 quotes and will present to the members. There are only 6 units so its very small. Again, thank you.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

My point is that the relative may well be the best in town. Your not going to hire them because it sounds like a conflict in interest? Has not been proven.

If it is disclosed the relationship, licensed and insured, and in the business needed what is the problem?

Our ex president was a sneaky con man to say it nicely. He quit being president so he thought could use me to get him jobs in the neighborhood. The problem for him was I am not stupid or blind. Made him get a license and insurance. (He was doing work prior for the HOA without). If we hired hime for a job, he faced 2 other bidders. We had a 3 bid requirement. He still won some of the jobs he bid on. Not by my vote but others. I just kept a close eye on the bill. He was one of those who always upped the bill and tried charge for his supplies. (If your a painter we not paying for your paint brushes example).

So as long as it is disclosed and no one is upset over it. Let it go. Who is judging?a HOA is only you and your neighbors...

Former HOA President

WendyM5 (North Carolina)
Posts: 1,522

Posted:

of course it's a conflict of interest, why do you need some strangers on the internet to verify that?
below is a sample conflict of interest agreemenet all board member should sign.
feel free to modify to fit your needs.

calling a lawyer is just pissing away money, the lawyer will tell you what ever you want to hear to get hired and make money.

ASSOCIATION
BOARD OF DIRECTORS
CONFLICT OF INTEREST POLICY

(Date)
(1) Individuals elected to the Board of Directors (the “Board”) of _________________
Association (the “Association”) shall not engage in activities that might interfere
with the discharge of their responsibilities to the Association or in transactions that
reasonably might affect the judgments they exercise on behalf of the Association.
(2) A conflict of interest exists when the interests or concerns of any Director are, or
may be seen as, conflicting or competing with the interests or concerns of the Association. This includes where a Director may personally benefit, directly or indirectly,
by a decision made by the Board. Such a conflicting or competing interest may,
but does not necessarily have to, involve an outside organization that has received
funds from the Association, has granted funds to the Association, or has provided
the Association with goods or services. An “Outside Organization” shall mean any
entity, person or business organization other than the Association.
(3) A Director who serves as a director, trustee, officer, staff member, employee, consultant or in a similar capacity to an Outside Organization that is currently providing
funds to the Association, or is providing goods or services to the Association, or is
receiving financial support from the Association, or has some other direct tangible
financial relationship with the Association shall include such information on a form
that the Association will collect annually, and shall provide updated information to
the Board as circumstances change. In addition, if any immediate family member of
a Director also serves in a similar capacity for an Outside Organization of the type
described above, such Director shall include such information on his or her annual
reporting form and any updates.
(4)(a) When any such conflict of interest is relevant to a matter requiring action by the
Board, the interested person shall call it to the attention of the Board, or any
relevant Committee, and such person shall not vote on the matter; if appropriate
such Director shall also absent him/herself from the discussion of the matter.
Specifically, in considering a request to provide grant, loan or other funds to, or
to borrow funds from, or to contract with, an Outside Organization with which a
Director is affiliated, the concerned Director shall notify the Chairperson of the
Board, or the Chairperson of the Committee, who will inform the Board, or the
Committee, of the relationship of such Director to the Outside Organization that
is the subject of the matter before the Board, or the Committee, and such Director’s relationship, if any, to the consideration and development of the proposal
before the Board, or Committee. If there is a potential situation of this nature
but a Director is not certain if the circumstances come within such procedure,
such Director may consult with a member of the Board of Directors. The Director
shall then disclose the matter to the Board and the Board shall vote on the best
course of action.
© 2019 Plain-English Media, LLC 42 HOAleader.com
(4)(b) The minutes of the meeting of the Board, or any Board committee, shall reflect
that the potential conflict of interest was disclosed, that the interested person did
not participate in the voting on such matter, and, if that was the case, was not
present during the discussion of such matter.
(5) The Chairperson shall annually prepare, and circulate to the entire Board, a list of
affiliations of Board members with Outside Organizations that may create conflicts.
Unless otherwise notified, the Chairperson may assume that past affiliations are
continuing.
(6) A copy of this Conflict of Interest Policy shall be furnished to each current Director.
All new Directors shall be advised of this Policy upon undertaking the duties of such
office. This Policy shall be reviewed annually or as requested by the Directors

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By JonnielynnD on 12/19/2022 6:14 AM
I was voted in as Treasurer and we are a very small community.
No one wants to step up and be President.

well then live with the consequences of no one wanting to step up and be president.
Or dont' write the check to the vendor saying it is overcharging due to being an inside conflict of interest.
if you hold the strings to the purse you should have a lot of power right?

but as others have said if the president recuses himself and other board members vote for his family to do the work and bids are transprent to rest of community no fowl iMHO.

vis ta vie

MichaelT21 (Arkansas)
Posts: 200

Posted:

I am curious what a Board does if a Board member declines to sign the conflict of interest agreement that Wendy presented? They are on the Board regardless.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MichaelT21 on 12/19/2022 7:50 AM
I am curious what a Board does if a Board member declines to sign the conflict of interest agreement that Wendy presented? They are on the Board regardless.

you get new board members to sign it and you publish in the newsletter that some board members didn't want to sign it.

Do you see anyone calling for US politicians to resign after they called for martial law on Jan 6th to overthrow a peacefull fair election? Nope. so in the end you maybe right, but never hurst to try and enforce ethical behavior even if in the end nothing is done.

vis ta vie

MichaelT21 (Arkansas)
Posts: 200

Posted:

Quote:

Posted By WendyM5 on 12/19/2022 7:52 AM

Posted By MichaelT21 on 12/19/2022 7:50 AM
I am curious what a Board does if a Board member declines to sign the conflict of interest agreement that Wendy presented? They are on the Board regardless.

The point that I am making is that no Board member has the authority to mandate other board members sign a code of conduct, unless the by-laws that all members should agree to and sign a code of conduct.

Public shaming of a board member who does not cooperate with undocumented request is not right and potentially would open the Board up to lawsuits.

if a board member wants signing a code of conduct to be a thing, that Board member should work to have the by-laws revised to include that provision and approved by homeowners.

KerryL1 (California)
Posts: 14,550

Posted:

Your've received helpful answers that agree with you there is a conflict of interest. Board members simply demand that the president recuse herself when the family members' business is up for bid. The Board can ask the "interested" director to leave the room during the discussion and the vote.

CA corporations codes has procedures about how "interested" directors must behave at meetings. They must reveal the conflict of interest and then not discuss or vote on the topic.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By KerryL1 on 12/19/2022 9:12 AM
Your've received helpful answers that agree with you there is a conflict of interest. Board members simply demand that the president recuse herself when the family members' business is up for bid. The Board can ask the "interested" director to leave the room during the discussion and the vote.

CA corporations codes has procedures about how "interested" directors must behave at meetings. They must reveal the conflict of interest and then not discuss or vote on the topic.

I agree. The OP added that people were happy with the landscaping (Pres. son) and they were the landscaper before the Pres was even a resident. This reeks of the OP on a Witch Hunt.

SheliaH (Indiana)
Posts: 6,964

Posted:

I think you probably know the answer to this, but in case it has to be written out:

• It’s not appropriate for families of board members to do association business – as NA1 said, the optics are awful and there’s too much potential for conflict of interest. I don’t buy this stuff about not being able to find another vendor – there wasn’t a leak, so why not have someone (not the president’s sons) put a tarp on the area until a roofer could be hired?
• The Bylaws dictate how the community is to be run, but there may also be language that allows the board to enact additional rules and protocols, as long as they don’t contradict or try to override the Bylaws and CCRs, so sit down and read them to see what they say. For example, board member should be acting in the best interests of the association, so it would make sense to establish a policy about conflicts of interest - what are they and what should a board member do if he/she has an actual or potential situation. What will the board do if the member keeps quiet and this is discovered later? Come up with a policy and adopt it via a board resolution in an open meeting. Put them in a notebook, with copies going to all board members and homeowners, if they'd like to review them. Also note the passing of the resolution in the minutes, which should also be available to homeowners.
• If your board president doesn’t want to behave in a transparent manner (which she really didn’t do in this case), the rest of the board needs to remove her from the position and pick someone else. If you’re on the board, you need to bring this up and see what happens. She probably won’t like it, but if there are several board members, she can be outvoted.

You may be a small community, but there’s still a right and wrong way to run a HOA – and it would appear yours needs some education on best practices. Looking around this website you’ll see lots of conversations about lots of topics – start by reading them to get some ideas. However, please note the dates of the conversation – if you have questions, start a new conversation, so you’ll get more recent information not something based on a conversation from a year ago).

Also, check out the community associations institute (CAI) website. They have education materials on HOA issues for new and experienced board members, and there may be some webinars you and your board might invest in – from there, you can develop policies that will work for you. Good luck!

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

DavidG45 (Delaware)
Posts: 994

Posted:

Quote:

Posted By JonnielynnD on 12/19/2022 6:02 AM
Hello. My Board President has used her sons as vendors for maintenance and repairs in our Association. They took the checkbook from the, then Treasurer, and wrote the check to their son and signed it. They stated they could not get another vendor and that it was an emergency (some shingles fell of the roof during a storm but there wasn't a leak in the unit-many feel it could have waited) They also stated that since it was just under $500.00 the bylaws state they have spending authority for that amount and they didn't need to get permission from anyone else. They continue this practice. In addition, the association is using a family member's landscaping company and their services are approximately 52% of our entire budget.

These family members are good workers. The President did not know this was a conflict of interest. We are a very small community but live in a busy area with more than enough vendors. I've done some online research wherein all of the sites state that there is a conflict of interest in using a board member's family as vendors and the Board member should a. recuse themselves from all voting and financial processing (which is now part of our newly incorporated policies and procedures) or step down from the board if we continue using that family member. We have already decided not to use the sons but are torn about the landscaping company.

The President does not want to follow these new procedures because they are not in the Bylaws, but are a practice that received an unanimous affirmative vote on at an annual meeting. Does anyone have any ideas as to where we can go for guidance on this subject? Thank you so much

Perhaps I am misunderstanding, but in the case of the landscaping contract, that would be a vote by the entire board; not a decision made by the President alone. If a majority of the board felt the contract was acceptable, then that is the end of it. As Bill indicated, hiring a relative, it is not automatically a conflict of interest or unethical. If there are landscapers available who can do a better job at a better price, then it is a bad decision regardless.

I also agree with Bill that the vote at the meeting does not have any substantive affect. These decisions are still the board's to make.

Unless there are enough owners who feel strong enough about this to run for the board and replace those who vote to use the President's relatives, I don't see anything that can be done.

JonnielynnD (Maine)
Posts: 11

Posted:

I just want to thank all of you for your responses. Some were extremely helpful and not judgemental. Again, no one is on a 'witch hunt' as someone suggested. In fact, it was the President who asked me to do the research when the complaint was brought up by a member. No one, including myself (very happy where I am) is looking to replace the President.

I consulted our bylaws (vague and old) as well as the IRS, state and federal laws as well as this forum. Then, I went to the lawyer. He agrees that the practices I've suggested to be put in place (with internal controls, getting 3 quotes per project, etc.), will suffice. We are also going to incorporate the procedures into our bylaws to include getting audits on a periodic basis.

I think some of you missed my statement that our President is a good one. They just didn't know which is why they asked me to research it. They didn't want to follow the procedure if it wasn't necessary but now they have confirmation that it is a conflict, they will comply.

Again, several of you provided extremely helpful advice and direction! This question can now be put to rest! Thank you!

MichaelT21 (Arkansas)
Posts: 200

Posted:

Quote:

Posted By JonnielynnD on 12/19/2022 10:38 AM
I just want to thank all of you for your responses. Some were extremely helpful and not judgemental. Again, no one is on a 'witch hunt' as someone suggested. In fact, it was the President who asked me to do the research when the complaint was brought up by a member. No one, including myself (very happy where I am) is looking to replace the President.

I consulted our bylaws (vague and old) as well as the IRS, state and federal laws as well as this forum. Then, I went to the lawyer. He agrees that the practices I've suggested to be put in place (with internal controls, getting 3 quotes per project, etc.), will suffice. We are also going to incorporate the procedures into our bylaws to include getting audits on a periodic basis.

I think some of you missed my statement that our President is a good one. They just didn't know which is why they asked me to research it. They didn't want to follow the procedure if it wasn't necessary but now they have confirmation that it is a conflict, they will comply.

Again, several of you provided extremely helpful advice and direction! This question can now be put to rest! Thank you!

It's problematic to request 3 quotes per project for small projects (under $500). Most vendors do this on a time and material basis because of the expense involved in creating a bid. If they do create a bid, it'll be for double or triple the money that time and materials would be.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I do not agree Michael. Having done that practice several times it was beneficial. We had a few contractors after doing a big contract with them were willing to pick up small jobs. Lawncare workers are happy to get anything on their off or slow times. I know several lawncare companies that turn into Christmas light installers after grass season. Which means they are often willing to negotiate or do smaller items outside their lawn contracts.

Former HOA President

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MichaelT21 on 12/19/2022 7:55 AM

Posted By WendyM5 on 12/19/2022 7:52 AM

Posted By MichaelT21 on 12/19/2022 7:50 AM
I am curious what a Board does if a Board member declines to sign the conflict of interest agreement that Wendy presented? They are on the Board regardless.

we all have a mandate to treat each other ethically. what are you smoking?

vis ta vie

JohnC46 (South Carolina)
Posts: 14,265

Posted:

A Code of Conduct is useless. Cheaters cheat no matter what they signed.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By JohnC46 on 12/19/2022 12:07 PM
A Code of Conduct is useless. Cheaters cheat no matter what they signed.

well at least they cant' claim they didnt' know about it. If they cheat we can go back to the paper and said you signed this remember?

besides that's the same arguement 2a people use. laws are useless, criminals don't obey them so why have laws?

vis ta vie

WendyM5 (North Carolina)
Posts: 1,522

Posted:

Quote:

Posted By MichaelT21 on 12/19/2022 7:55 AM

Posted By WendyM5 on 12/19/2022 7:52 AM

Posted By MichaelT21 on 12/19/2022 7:50 AM
I am curious what a Board does if a Board member declines to sign the conflict of interest agreement that Wendy presented? They are on the Board regardless.

maybe if everyone is elected but in our HOA no board member has ever been elected as far as I recall, they are all appointed and the exsisting board members can make any criteria they want to appoint someone new including signing a code of contact contract.

vis ta vie

KerryL1 (California)
Posts: 14,550

Posted:

Do any of your state statutes--probably corporation codes have statutes about the procedure to handle a conflict of interest on a nonprofit Board? Hmmmm.....m no one know?

MichaelT21 (Arkansas)
Posts: 200

Posted:

No one is getting rich off of under $500 contracts. As long as the work is getting done and getting done well I wouldn't worry about COI.

COI comes into play in much larger contracts - $10,000 and up for example. A $130,000 playground bid shouldn't go to the brother of the board president without a competitive bid.

But under $500? Nah, nothing to see there. Unless there are 20 of those in a year that are signed.

KerryL1 (California)
Posts: 14,550

Posted:

Might be an issue when they reNEW the landscaping contract.

JonnielynnD (Maine)
Posts: 11

Posted:

This is funny. You are wrong and perhaps should know more about our association. YES, because we are so small, $500 is a HUGE impact on our small community. The landscaping contract is over 53% of our budget, many others in the area can do the same work and just as good. The $500 issue keeps coming up, family member vendors keep getting paid. I just became Treasurer and am trying to sort this all out.

But if the same family member is paid close to $500 each time they do work, no one is told about it, and it happens several times a quarter/year, yeah, it adds up. Again, 6 units!

MichaelT21 (Arkansas)
Posts: 200

Posted:

Quote:

Posted By JonnielynnD on 12/20/2022 5:53 AM
This is funny. You are wrong and perhaps should know more about our association. YES, because we are so small, $500 is a HUGE impact on our small community. The landscaping contract is over 53% of our budget, many others in the area can do the same work and just as good. The $500 issue keeps coming up, family member vendors keep getting paid. I just became Treasurer and am trying to sort this all out.

But if the same family member is paid close to $500 each time they do work, no one is told about it, and it happens several times a quarter/year, yeah, it adds up. Again, 6 units!

I'm sorry...posters come here, don't share information about their association, and then get mad at the advice that they give doesn't seem to fit their particular situation.

If $500 is a huge impact, perhaps your Board should revoke the right to unilaterally spend money, and require all contracts be authorized by the Board.

NA1 (Massachusetts)
Posts: 190

Posted:

Quote:

Posted By MichaelT21 on 12/20/2022 6:21 AM

I think jonnylynne’s last indicated its $500 per visit for several visits a quarter

So this is not a $500 contract but a several thousand $ contract, which is how it should be presented and what needs to be budgeted and voted

It may still be true that no one is interested in the contract, but at several thousand dollars it might be more interesting. (Ours is 5 digits and we could still only attract two bids).

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I still view this a someone's son or daughter has a good business and happen to be President. I am not going to kick out a good vendor option just because of the relationship. I know what that relationship is and also know good work they do. So as long as I know both, have no issues.

It is a small HOA. $500 does not sound like much for some lawncare items. That is about typical. You may want to get other bids but why kick the good vendor out because you THINK it is a bad thing? Is it really?

Former HOA President

JonnielynnD (Maine)
Posts: 11

Posted:

Please read my above texts. I've laid it out clearly. I so not THINK, it IS a conflict of interest. It IS a conflict of interest, so says our lawyer, and various government websites. This is our policy per our bylaws. I'm happy for you to be President. That's wonderful. We are opening ourselves up to litigation. The landscaping contract is NOT $500. It is 53% of our current budget. The Presiden't condo gets extra service. Again, thanks to everyone who provided constructive advice. This issue is resolved. How do I close it out so that no one else responds.

JonnielynnD (Maine)
Posts: 11

Posted:

The landscaping company is NOT willing to compromise. They do our snowplowing as well. The President, signed the contract and was paying them themselves and not the Treasurer as they do with their sons. That I why the previous Treasurer resigned. I know what to do. I will get the 3 quotes for all vendors. I worked for the Feds as a Federal Compliance Manager and Director of Administration, for decades prior to retiring. I feel it necessary. I've never done an HOA so I thought this site would assist me. Several of you did. Our association shouldn't be compared to others. We have different bylaws, different states, different sizes, etc. Its like comparing Apples to Oranges. Thank you.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

No one knows the full story. No HOA is alike. They are not related to each other. Each state varies. We can only advise from what we know or research.

Who is paying for this lawyer?

It should be noted in our HOA we were responsible for lawncare only. (We had a pool/clubhouse too). That vendor amount on average took up over 50% of our income. We did not plow snow but that is usually an additional amount. We paid around $2500 a month on lawncare from April till October. We only collected monthly 5K. Lawncare or any additional projects are up the budget However being a non profit corporation as most HOA we were to spend as much as we collected.

Former HOA President

JonnielynnD (Maine)
Posts: 11

Posted:

This is only because of our internal controls.

PLEASE STOP! i KNOW WHAT TO DO. YOU DO YOU.

MichaelT21 (Arkansas)
Posts: 200

Posted:

Sometimes, it would be helpful if the OP could just tell us the answer they would like to hear, so we could all say exactly that, and save everyone a bunch of time.

JonnielynnD (Maine)
Posts: 11

Posted:

You are reiterating what I've said and refusing to read my previous emails. Are you implying I'm lying about the situation? What gain is that if you are a complete stranger with a different HOA?

FYI: What concern is it of yours who pays for the lawyer? Leave this alone.

Again, YOU DO YOU and PLEASE STOP TEXTING ME. YOU ARE NOT HELPFUL AT ALL, YOU ARE SIMPLY BEING JUDGEMENTAL. I WILL NEVER USE THIS SITE AGAIN.

JonnielynnD (Maine)
Posts: 11

Posted:

I don't know what an OP is, but if you are referring to myself. You are harassing me after I repeatedly mentioned this matter is closed. I'm certain issuing judgements, implications and pressure to do things according to your HOA, isn't what this site is about. If you respond again with your judgements, I will find a way to report you. I've mentioned repeatedly, I shall do what is best for MY association, NOT yours. Thank you.

KerryL1 (California)
Posts: 14,550

Posted:

Yes, it's a conflict of interest, but so long as the president has no role whatsoever in any aspects of changing, renewing, etc, the contract(s) it's OK. the problem is that "optics." It can look bad to other owners.

Btw, way, boards vote on contracts at board meetings. The prez does not (or should not) approve them. Often the president is the one who signs them, but generally any officer can.

Please ignore Melissa on this topic. She was a president literally decades ago and is not a reliable source.

I don't know why MichaelT (actually a long-time poster) is being such a jerk. Generally he's helpful and courteous.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

My concern about who is going to be paying for the lawyer is based solely on the fact the money has to come out of the HOA budget or your own personal pocket.

Who agreed to go to the lawyer and then spend HOA funds? Is this not similar to what your claiming is already happening?

You can just throw a legal bill onto your HOA just because feel need to consult one. It has to be agreed upon by the board this expenditure before talking to a lawyer

$500 is not out of range of price to pay for consulting. Plus what if that lawyer is related or a friend of your or BOD member? Will that not just be apples to apples?

Former HOA President

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I also do not see anyone being judgemental or harassing. That was taken to a level no one else sees...

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

JonnieLynnD, the Maine Nonprofit Corporation statute addresses conflicts of interest at https://legislature.maine.gov/statutes/13-B/title13-Bsec718.html . Chances are your HOA is a mutual benefit corporation. You will want to confirm this by doing some research at the Maine Secretary of State.

According to the statute, a transaction involving a conflict of interest is generally going to be valid if the conflict of interest was disclosed to all board members and also, the director with the conflict of interest does not vote.

If you have questions about applying this section, please mention my name and ask away.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Quote:

Posted By KerryL1 on 12/20/2022 9:02 AM
Yes, it's a conflict of interest, but so long as the president has no role whatsoever in any aspects of changing, renewing, etc, the contract(s) it's OK. the problem is that "optics." It can look bad to other owners.

Btw, way, boards vote on contracts at board meetings. The prez does not (or should not) approve them. Often the president is the one who signs them, but generally any officer can.

Please ignore Melissa on this topic. She was a president literally decades ago and is not a reliable source.

I don't know why MichaelT (actually a long-time poster) is being such a jerk. Generally he's helpful and courteous.

Well said.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Jonnielynn,

If you are getting emails/texts when someone replies to this thread, you likely checked a box to be notified.
This is easily fixed.

Simply open the thread and uncheck the box that says email me.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Good advice Tim. Know I can barely text in real life... A fact friends tease me about...

Question? If I lived in a HOA of 10 members. 3 of which are the BOD members. The President has a son who mows lawns to earn money. Would that be a conflict of interest on the President or mine? I am paying the kid but they are the President's kid... So should I report this to all the other neighbors who may see or hire this kid also?

I am just saying short of the HOA footing the bill, why is this an issue in a small community?

Former HOA President

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