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Subject: Board member with confliict of interest?
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01/24/2006 10:01 PM  
There is a woman on our board who not only is married to the resident manager but also owns the rental department, which at our complex occupies the front desk. Everyone who works the front desk is her employee. She works at collecting proxies so she also has control over who is on the board. In my opinion and many others who become new owners here, it is a major conflict of interest. But since she is not THE resident manager, only married to him, she claims there is no conflict and she will readily abstain from votes concerning the property manager. I don't really feel our property manager is putting in a full day's work either but it's impossible to bring that sort of thing up at our board meetings with his wife on the board.

Is there anything in print that might answer this question?

Thank you,

Ed Reder


01/27/2006 5:56 PM  
By simple review, I agree it is a conflict. Not because her husband if the manager- but because she is on the Board and owns the rental department.

I have not seen this issue previously, but I would think that at the least someone will have to work just as hard at getting enough proxies to vote her out. If she is honest, and her husband is working a full day for his pay then explaining or proving it should not be an issue. If it is brought up at a meeting in a 'silly me, I am probably wrong, but it appears that our manager has been putting in odd hours.' manner you may backdoor your way into an answer or back them into a corner.

Good luck,


01/30/2006 9:07 AM  
You have two issues here. First, is the woman on the Board you claim may have a conflict of interest and also "controls" the outcome of the board by collecting proxies. I assume she is also an owner.

Board members must be vigilant and make sure that this particular board member recuses herself from voting on matters where there is a possible conflict of interest.

It is also in the best interest of the association for owners set up an Elections Committee, if there isn't already one, to encourage new candidates for the Board. The Committee should organize candidate forums before the Annual Meeting/Election so that owners can hear position statements of the candidates and also question them as to possible conflicts of interest. I advise against nominations from the floor of the Annual Meeting.

You may wish to change the rules about proxy collection, which is what my old HOA did, so that no one person can collect more than two proxies. This prevents one person or a bloc of owners from controlling the outcome of an election. If this requires a bylaw change, it will involve more time and effort, but the outcome will be worth it.

The bottom line is owners must take an active role in their community association and not let others act in their behalf.

As for the resident manager allegedly not putting in a full day's work: The resident manager serves at the pleasure of the Board, so the Board members need to hold the manager accountable for his performance. If there is no job description and performance goals against which to measure performance, the Board should task an executive committee to create one. (It goes without saying that the wife of the resident manager cannot serve on this committee.)

Again, the Board members must exercise their fiduciary responsibility; it is a lot of work, but that is what is required.
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