Real Estate Law - Conflict of Interest?

Business 7 views 3 answers
I have a situation where two of our HOA board members have direct business dealing with each other and hold the association as if they owned it. One of the board members work for the other member's husband's company. They generally agree with each other on all HOA business, voting and etc... They voted and influenced other board members to award a substantial contract to a roofing company in which they either actively have business with and know the owner personally since they are all part of a boys and girls club. The two board members act with any consideration for the law. One even bragged about getting a free garage door from a company who has a monopoly on the association since the it only allowed a custom made garage door. Are the board members breaking the law here?

Attorney Answers

3
Roger Moss ·
Mr. Smart is spot on. You've described a pot full of ugly problems that are hitting you and others in the pocketbook. Don't delay in consulting with an experienced HOA attorney.
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Brandon Robinson ·
Attorneys Smart and Moss have provided you with good answers. In most states, the fiduciary duty of loyalty requires that if a vote is before an entity's board that will financially benefit one or a couple directors at the possible expense of the entity, the financially interested members must fully disclose the potential conflicts of interest to the entire board, so that the board can make a proper, informed vote on the matter. The board must be given ample time to fully investigate and assess the nature of the conflict. As my colleagues have recommended, you need a seasoned California business or HOA attorney to guide you through this problem. Thanks for being thoughtful enough to post this question, and to consider your entity's best interests above more parochial concerns.
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