HOA Board members and their voting rights

Good Morning!

Problem: As VP of an HOA, this has never happened before and I am wondering about what I should do?

Our HOA has 7 Directors. We have taken on the responsibilities of many co-owner projects and approve vendors, the purchase of materials, etc. regularly.

I am a co-owner as well as a committed member of the Board, elected to make decisions in the best interests of all co-owners. I have done this successfully with the other members for over a year now. I respect all Board members.

Recently, my unit needs some work on the common ground area. The Board is in the process of approving an old updated bylaw document. We have nothing in the new or old document that "speaks" to the issue I am struggling with. All units have timber flower boxes, some very large and many smaller ones. We have 2 in front of our entrance that need replacement. The timbers are rotted and leaking dirt from many holes. We moved here 3 years ago and have gotten repeated work orders for this work to be done. An estimate of $2000 was made and we thought it was going to be fixed.

Another Board member (member at large) has requested that I and another new member who has the same issue recuse ourselves in the voting process for deciding whether the Association pays for this project or what direction is taken. I think there have been many issues in the past that other members units have been affected and am not sure how it was handled then. I can ask at our next meeting. But it seems to me that we are opening a new box here......most of the other members have been on the board for many years and have their units in perfect condition.

As an elected member of the Board, I feel we should be able to vote on any issues affecting co-owners, as we are voting in the best interests of all the co-owners including ourselves as we are co-owners too.

Should we have to recuse ourselves from the vote? Nothing is written anywhere that pertains to this problem. What do you all think?

Thanks so much,
Lou

-- As a matter of law, if neither the HOA's bylaws nor the state's statutes require recusal, then legally you do not have to recuse.

-- Is this a condominium, subject to Mi's condo act? Answer this and I will check the statutes. Sometimes the state nonprofit corp act, for one, does speak to conflicts of interest.

-- Please clarify: Is this a vote on common area repairs? If so, and it happens to be in the vicinity of your unit, then I am pretty sure my position would be that you should in fact vote on this, and you have a fiduciary obligation to do so.

-- Is there truly any doubt about whether the HOA has the legal responsibility for this repair/maintenance?

-- Ethical obligations are different from legal obligations. I happen to think this distinction is not trivial.

I see that ElleN and I have slightly different takes on this.

I think it will depend on the nature of the project. If the association is repairing a line of planters, one of which happens to be in front of my home, then I would not recuse myself. But if the planter was in front of my home and nobody else's planters were being dealt with, then I'd look at what kind of work was being done. Is it clearly a repair, or is it an "upgrade" of some sort?

Regardless of what the laws and ethics require, I think that optics should also be considered. Just because it isn't forbidden doesn't mean it's a good idea.

I do take ElleN's point about fiduciary duty, though....

Thanks!The deteriorating planters are causing some damage to our siding and leaking dirt all over the sidewalk from holes in the timbers. This is a condo Association. Co-owners is synonymous with the term "owner" in our documents. We are in Michigan. Our entry ways are considered limited common elements and are appurtenant to our unit wherein landscaping and ornamentation shall be installed and maintained by the co-owner. ( does that make any sense or can they change what was a common element to a limited common element? Just wondering.) It seems like our front entry porch and steps are maintained by the Association, but the adjointing flower bed, made from timbers are our responsibility.

I ofcourse do not want to look like I just want to show power here, but we have waiting going on years now for this to be done and now I am suspicious that the Board is waiting until the bylaws are passed and this will not be covered to do the project. Does not seem right to me. My responsibility as a VP is to work on behalf of the co-owners who elected me and in their (and my) best interests. I am conflicted here and don't really know what to do. I have no problem Not voting because of how it looks, but with all the other factors, I am not sure exactly what to do. All units needing timber replacement in the past have gotten it done through the Association. Now the rules are changing, 3 years after we moved in and iniated a work order etc. which was cancelled and we were told we had to get another one issued...no reason given. We did get a new WO but it just sits there....and I have suspicions, it will until the bylaws pass and we have to pay thousands to have something done we asked to get done 3 years ago.

Kerry makes some good points about who will the modifications/changes help? If they help all, including me, I see no reason to exclude me from voting. If they help me alone and/or a small portion, I should exclude myself from voting.

Absolutely not. Since “ All units have timber flower boxes, some very large and many smaller ones” this is a common design feature to all or a majority of the units and common area requiring the HOA to maintain. You are not voting on an issue that only affects or benefits you.

As a board member, you should recuse yourself for conflicts of interest such as improvement applications you submit, payments for any services you provide the HOA for a fee, any votes on contractors you have a personal relationship with and alleged bylaw or regulation violations against you. Not repairs of common property just because the repair needed is close to your property.

-- There was a conflict of interest, just not an illegal one.

-- The situation begs the question of boards using HOA funds to pay for social committees (where the CCRs and Bylaws do not authorize spending such money) in the first place. Many think doing so is not ethical. Hence I would not begrudge the President for saying, "Look you are going to favor your husband, so you have a conflict of interests, and your vote here is not impartial."

Gee, Kerry, why is it that the Florida condo Act prohibits husband and wife (who own one unit) from serving on a HOA board at the same time (unless there are no other candidates)? Or in Texas, why does TPC 209 prohibit a husband serving on the board while his spouse serves on the Arch Committee? After all, service on either the board or the Arch Committee pays nothing.

Of course one spouse is going to want to support (with money or other things) a (likely illegal) committee on which her spouse serves. The conflict is obvious.

But it is not an illegal conflict, at least in California.

I realize you disagree.

The subject topic, Elle, is"conflict of interest." I think you need to look it up.* The Soc. Comm. was a mere example--not the subject-- to show that many misunderstand what a conflict of interest is.

Our HOA has had a Building Committee off & on and, as with the Soc. Comm, but since the latter is triggering to elle, spouses of board members also sometimes serve on the BC.. They have no budget so must seek funding from the Board art open board meetings for basically common area improvements & enhancements. They must submit their requests & recs with pricing, etc.

One BC request to the Board was for large clock mounted up high poolside so that pool exercisers could easily see their time in the pool. A Board member's spouse was an everyday pool exerciser. He voted yes with the rest of the Board. Should he have recused himself? I say no because the clock benefits many pool users not solely his wife. She does not benefit DIFFERENTLY than ANY other residents.

In addition, many who've lived in my HOA a long time become friends and socialize with one another. Should I recuse myself when something that will benefit one of my friends is on the agenda?? No--not if all other owners potentially benefit in the same way. "Wanting" to "support" my spouse or friends is NO conflict IF they receive no benefit that's denied to other owners.

You show exceedingly rare instances, elle, where (to be correct with the lingo) co-owners may not serve on a Board together as some kind of evidence. Of what? Be precise. If anything, potential "self-dealing," where on a board of 3, which is very common, 2 co-owners serving simultaneously is a bad policy. Or one co-owner ( TX TPC209 really says "husband??"; please cite verbatim) on the board & one on an ARC? Neither of these rare statutes show that you know what a conflict of interest is.

*If you do not like the verbiage from Davis-stirling.com--authored by HOA lawyers--in my way above, please cite a definition from a similarly legit source.

Knowledgeable directors didn't request my recusal. All voted for the increase including the prez, who actually loved the Soc. Comm. After being defeated as a board incumbent running for reelection, she later joined the Social Comm. and became chair of an SC of 8-10, a typical size.

She was such an idiot that she brought a rec to the Board from the Soc. Comm to purchase a very high end large fridge for our Common Area modest kitchen that's attached to our Social Lounge. Perhaps 1-2 residents reserve the Lounge a month for private parties, receptions, etc. It holds 55 ppl. The kitchen has a microwave & a toaster oven and a small upright fridge.

Her/the Committee's idea was to have this new fridge be for the use of the SC only so that foods/freezer stuff they re-use could be stored there instead of in their own Unit fridges. The cost would exceed their budget hugely so they sought HOA funds. Now, surely someone here can tell the rest of us the many reasons why this request to the Board was so ridiculous.

I can't even believe you're writing this elle: It's really tough, in your mind, for a board member to do what's best for their HOA if their spouse wants, say, the opposite? Elle writes: "This is due to conflicting interests (peace in the household vs. the corporation's well-being)." This usage of "conflicting interests" does NOT at all mean the same thing as "conflict of interest, which for some odd reason you refuse to (are unable to?) define.

I disagree, having been with a spouse my 14 years of board service, it was not difficult AT ALL to disagree on many different HOA topics in this very complex HOA. And we even kept the peace. Good gawd, you're talking as if it's 1954. I'm friends with other current or former board members who also have not seen eye-to eye with their spouses on some HOA topics. They've worked it out.

You know full well, elle, that the OP is talking about a concern about a conflict of interest even if she did not use that phrase. Re-read her OP.

It's an astonishingly weird leap from I, as a director voting to approve a poolside clock, which will benefit many residents, including my spouse who exercises in it daily, TO, as elle puts it: "...husband Jones violates a pool rule and receives a notice of hearing and pending fine, you think it's okay for wife Jones, who is on the board, to vote on the violation." WT...?

As she so often does, elle tried to jam thoughts in my mind that I would never in a million years think.

Pool rule violations in my HOA are basically of two kinds: 1. Obnoxious loud behavior that disturbs the peaceful use of the pool by residents as well as greatly annoying contiguous condo units. 2. Roughhousing, running on the deck, diving, dunking play, which not only are nuisances, but safety issues.

I'll try to explain the DIFFERENCE. The pool clock installation benefits many, i.e., is good for the corporation.

Pool rule violations harm many and are bad for the corporation.

One job as director is to protect the corporation. If my spouse were called to hearing for violating pool/any rules, I, of course, would recuse myself. Presenting excuses to the Board to try to "justify" his behavior to avoid paying a $100 fine, IF I were successful, benefits only him & me. I'd have completely ignored my fiduciary obligation of working in the best interests of the corporation and would have engaged in an obvious conflict of interest.

To repeat my waaaay above from honest-to-gawd HOA lawyers: "An 'interested director' is one who has an interest in the outcome of a board decision BECAUSE he/she receives a personal benefit from the decision that is DIFFERENT from the benefit conferred on other members of the association." And, "Oftentimes board members vote on matters that result in a benefit to them that is NOT a conflict of interest BECAUSE the matter ALSO benefits the membership as a whole [CAPS, KL EMPH.]."