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Feldsott Lee Pagano & Canfield
Orange County Homeowners Association Law Firm

Avoid these "conflicts of interest" with your HOA board

Serving on a homeowner’s association (HOA) board is a chance to participate in managing the affairs of the community, but it also can be a thankless job that leaves you open to unsatisfied residents’ unsolicited feedback.

If a conflict of interest crops up with the board, serving the association becomes much more difficult on many levels. Fortunately, with a little proactive planning and consideration, you can avoid these problems.

Attorney Conflict Of Interest

An attorney who is also a board member legally advising the association on an informal basis is just one of the legal conflict of interests your association should avoid. An attorney acting as an informal advisor for the association introduces a dual connection that constitutes an attorney-client relationship.

Another situation that is questionable for an HOA board to tolerate is when an HOA’s attorney also represents the HOA’s management company. An even larger warning sign is when the attorney has not given notice of the representation relationship to the HOA.

Hiring A Board Member’s Company

Hiring a board member’s company to do work around the grounds of the association sets up an awkward conflict of interest which could blow up into a situation that is hard to untangle. For example, some board members think that it’s very convenient the president owns a lawn maintenance company and want to give his business the association’s landscaping contract.

Not Separating Individual Wants From The Larger Good

Each board member should receive an orientation to serving as a representative of fellow residents. Awareness of internal conflicts of interest that can crop up while serving on the board can help each member make optimal ethical decisions. A common internal conflict is not being able to separate what you want as an individual property owner from what would be the best for the association as a whole.

Employee And Owner – Board Member

If a management company employee purchases a property in the building, then runs for a board position, a huge conflict of interest presents itself. A triple conflict rears its head that could be avoided by a provision in the HOA against this conflict of interest.

The best thing that an HOA can do to avoid conflicts of interests is to adopt a standardized and transparent approach for making decisions in every instance. If a conflict arises, consult trusted legal counsel to address the issue.

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