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Subject: Real Estate Agents on HOA Boards
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Author Messages
NpB
(Arizona)

Posts:112


01/10/2020 12:49 PM  
What are your opinions on having real estate agents or brokers on an HOA Board of Directors, irregardless of whether they at any point in time have been involved in the transaction of real property in the HOA in which they are members? I view having real estate agents on a Board as a conflict of interest.
GeorgeS21
(Florida)

Posts:1877


01/10/2020 12:56 PM  
Nah.
JohnT38
(South Carolina)

Posts:179


01/10/2020 1:03 PM  
Under what basis would you deny them a seat if they have been voted on?
MarkM19
(Texas)

Posts:506


01/10/2020 1:08 PM  
NpB,
I will give you my reasons for not liking them on my Boards in the past.

1) They tend to want superficial fixes that Sells homes like flowers and ornamental things.
2) I have yet to me one that has not looked out for their own best interest ahead of everything else.
3) Personally I feel like they have an advantage knowing who is behind in dues.
4) They all end up Farming in the Community they are supposed to be leading. Conflict of Interest yes.
5) I have not met many Board Members that do not have a reason why they want on the board. Selling homes is not a good one in my opinion.
6) They usually do not make good teammates.

OK so I guess you could say that I am not a fan of Realtors even though I have a few that I have used multiple times over the years. I will just say that if I could buy most for what they are worth and sell them for what they think they are worth I could make a lot of money.
MarkM19
(Texas)

Posts:506


01/10/2020 1:08 PM  
NpB,
I will give you my reasons for not liking them on my Boards in the past.

1) They tend to want superficial fixes that Sells homes like flowers and ornamental things.
2) I have yet to me one that has not looked out for their own best interest ahead of everything else.
3) Personally I feel like they have an advantage knowing who is behind in dues.
4) They all end up Farming in the Community they are supposed to be leading. Conflict of Interest yes.
5) I have not met many Board Members that do not have a reason why they want on the board. Selling homes is not a good one in my opinion.
6) They usually do not make good teammates.

OK so I guess you could say that I am not a fan of Realtors even though I have a few that I have used multiple times over the years. I will just say that if I could buy most for what they are worth and sell them for what they think they are worth I could make a lot of money.
JohnT38
(South Carolina)

Posts:179


01/10/2020 1:11 PM  
That doesn't answer my question. I asked if this person was voted in, on what basis would you try and remove them? If you can't then there is nothing to talk about.


https://www.hoaleader.com/public/Are-These-CondoHOA-Board-Member-Truly-Conflicted.cfm
MarkM19
(Texas)

Posts:506


01/10/2020 1:13 PM  
If they are voted in by the Community they can only be voted out by the Community.
NpB
(Arizona)

Posts:112


01/10/2020 1:17 PM  
Posted By MarkM19 on 01/10/2020 1:08 PM
NpB,
I will give you my reasons for not liking them on my Boards in the past.

1) They tend to want superficial fixes that Sells homes like flowers and ornamental things.
2) I have yet to me one that has not looked out for their own best interest ahead of everything else.
3) Personally I feel like they have an advantage knowing who is behind in dues.
4) They all end up Farming in the Community they are supposed to be leading. Conflict of Interest yes.
5) I have not met many Board Members that do not have a reason why they want on the board. Selling homes is not a good one in my opinion.
6) They usually do not make good teammates.

OK so I guess you could say that I am not a fan of Realtors even though I have a few that I have used multiple times over the years. I will just say that if I could buy most for what they are worth and sell them for what they think they are worth I could make a lot of money.






I agree with your reasonings and chiefly #1.
TimB4
(Virginia)

Posts:16632


01/10/2020 1:19 PM  
Np,

Professions of individuals serving on the board should not be considered as a reason to keep that individual off.

For example: I've had individuals who were attorneys who I served with on the the board. Their personalities ranged from one end of the spectrum to the other and places in between. That doesn't want me to include or exclude attorneys from serving on our board.

Take each individual and judge them on their merits.
Each one can bring a unique perspective to issues a board faces.
Some individuals can be complete jerks and still provide a great service to the community.

JohnT38
(South Carolina)

Posts:179


01/10/2020 1:25 PM  
Tim, I agree 100% with you. It's O.K to have reservations but if you're not open minded there is a problem. Also, considering the apathy that is common in many HOA communities it's hard enough to find anyone that is even willing to step up and help.
CathyA3
(Ohio)

Posts:667


01/10/2020 1:27 PM  
Posted By MarkM19 on 01/10/2020 1:08 PM
NpB,
I will give you my reasons for not liking them on my Boards in the past.

1) They tend to want superficial fixes that Sells homes like flowers and ornamental things.
2) I have yet to me one that has not looked out for their own best interest ahead of everything else.
3) Personally I feel like they have an advantage knowing who is behind in dues.
4) They all end up Farming in the Community they are supposed to be leading. Conflict of Interest yes.
5) I have not met many Board Members that do not have a reason why they want on the board. Selling homes is not a good one in my opinion.
6) They usually do not make good teammates.

OK so I guess you could say that I am not a fan of Realtors even though I have a few that I have used multiple times over the years. I will just say that if I could buy most for what they are worth and sell them for what they think they are worth I could make a lot of money.




Wow.

You can say the same things about many board members who are not realtors. I think that most board members are serving out of self interest: they want to protect their investment. Doesn't make 'em lousy directors.

If homeowners want to give their votes to folks who are not realtors, that's their business. But you can't prohibit them from serving - that's discriminatory.

NpB
(Arizona)

Posts:112


01/10/2020 1:30 PM  
Posted By CathyA3 on 01/10/2020 1:27 PM
Posted By MarkM19 on 01/10/2020 1:08 PM
NpB,
I will give you my reasons for not liking them on my Boards in the past.

1) They tend to want superficial fixes that Sells homes like flowers and ornamental things.
2) I have yet to me one that has not looked out for their own best interest ahead of everything else.
3) Personally I feel like they have an advantage knowing who is behind in dues.
4) They all end up Farming in the Community they are supposed to be leading. Conflict of Interest yes.
5) I have not met many Board Members that do not have a reason why they want on the board. Selling homes is not a good one in my opinion.
6) They usually do not make good teammates.

OK so I guess you could say that I am not a fan of Realtors even though I have a few that I have used multiple times over the years. I will just say that if I could buy most for what they are worth and sell them for what they think they are worth I could make a lot of money.




Wow.

You can say the same things about many board members who are not realtors. I think that most board members are serving out of self interest: they want to protect their investment. Doesn't make 'em lousy directors.

If homeowners want to give their votes to folks who are not realtors, that's their business. But you can't prohibit them from serving - that's discriminatory.






Real estate agents and brokers are not a protected class.
TimM11


Posts:329


01/10/2020 2:08 PM  
I see no reason to exclude realtors. I've never been on a board with one, though they've owned property in my HOA. Literally everyone who serves on an HOA board is doing so out of self-interest. Plus, realtors are going to be more knowledgeable about issues than the majority of people who serve on boards anyway.

I'm fine with CC&rs having language about conflicts of interest, especially if it is not already addressed by relevant laws, but it shouldn't specify individual professions.
CathyA3
(Ohio)

Posts:667


01/10/2020 2:46 PM  
Posted By TimM11 on 01/10/2020 2:08 PM
I see no reason to exclude realtors. I've never been on a board with one, though they've owned property in my HOA. Literally everyone who serves on an HOA board is doing so out of self-interest. Plus, realtors are going to be more knowledgeable about issues than the majority of people who serve on boards anyway.

I'm fine with CC&rs having language about conflicts of interest, especially if it is not already addressed by relevant laws, but it shouldn't specify individual professions.




Realtors are like any other professional group: there are good ones and there are bad ones. The ones I wouldn't want to serve on a board with are the ones that I would not do business with, period. It's their character, or lack of, not their profession.

While we're dealing with stereotypes, in my experience the worst board member came out of academia. Thought that there was nothing to learn, did exactly as he/she pleased, bylaws and CC&Rs be [email protected], and did things that would have gotten him/her fired in a business environment. Truly mind boggling.
JohnC46
(South Carolina)

Posts:9053


01/10/2020 2:58 PM  
I say you cannot ban an owner from running for the BOD based on their profession. I have no problems with realtors on my BOD unless they try to play lawyer which many of them do. Not to generalize, but the two PIA professions I have served with are lawyers and school teachers. The lawyers always wanted to get legal opinions. The school teachers wanted to treat owners like school children as in punish all based on the behaviour of a few and they were not use to making big decisions. The worst was one I served with had a law school degree, but never took/passed the Boards to practice law. He was scared to death of making decisions.

I do agree many get on the BOD as they have an agenda (as I did in my first HOA) and quite often when the agenda is met or refused, they become useless.
MarkM19
(Texas)

Posts:506


01/10/2020 2:58 PM  
Cathy,
You reminded me of another profession that should be avoided. My Ca. board appointed a Doctor many years ago and while we were debating it and I was against I was told things like he is a Pillar of the City. He is the Best Doctor in Town. My comment back to them was a simple question. Do you know why they must make 200K a year? Because they are usually not great Business people. Very few take Finance courses in College. He was appointed and was not really as bad as I thought but really did not have many opinions and basically filled a seat till the next election.

I think that Board members need to be Just like a Football team. If you have 5 Quarterbacks you can't play defense and won't score much. It takes some lineman, running backs and receivers and always a Good Quarterback(President) to make a Great Board.
CathyA3
(Ohio)

Posts:667


01/10/2020 3:01 PM  
Posted By NpB on 01/10/2020 1:30 PM

Real estate agents and brokers are not a protected class.




If they're homeowners, they're "protected" by the CC&Rs and one of their rights is serving on the board (unless excluded for some other reason, such as not being current in their assessments).
JohnC46
(South Carolina)

Posts:9053


01/10/2020 3:08 PM  
On my BOD of 5, The Pres and I (VP/Treasurer) do all the work. The other 3 basically rubber stamp what we two want. One reason we two work well together is we are fair, realistic, and neither has an agenda.

Our MC does two important things for us. They basically collect our dues, pay our bills, and provide in-depth monthly financial reports for our review. Secondally, they also play the heavy for dues collections and covenant violations though on the violations they do so at our direction.
CathyA3
(Ohio)

Posts:667


01/10/2020 3:09 PM  
Posted By MarkM19 on 01/10/2020 2:58 PM
Cathy,
You reminded me of another profession that should be avoided. My Ca. board appointed a Doctor many years ago and while we were debating it and I was against I was told things like he is a Pillar of the City. He is the Best Doctor in Town. My comment back to them was a simple question. Do you know why they must make 200K a year? Because they are usually not great Business people. Very few take Finance courses in College. He was appointed and was not really as bad as I thought but really did not have many opinions and basically filled a seat till the next election.

I think that Board members need to be Just like a Football team. If you have 5 Quarterbacks you can't play defense and won't score much. It takes some lineman, running backs and receivers and always a Good Quarterback(President) to make a Great Board.




I agree that the best boards have people with different skills who can play different positions.

Speaking of doctors, one of the odd little truisms we kicked around while I worked at an investment firm was that doctors as a group are terrible investors. No clue why. As with university professors, the only thing I could come up with is that they had been educated within an inch of their lives and they truly didn't understand that there was any more to learn. (My experience with grad school was just the opposite: it taught me how little I did know.)
NpB
(Arizona)

Posts:112


01/10/2020 3:16 PM  
Posted By CathyA3 on 01/10/2020 3:01 PM
Posted By NpB on 01/10/2020 1:30 PM

Real estate agents and brokers are not a protected class.




If they're homeowners, they're "protected" by the CC&Rs and one of their rights is serving on the board (unless excluded for some other reason, such as not being current in their assessments).





Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations.
JohnT38
(South Carolina)

Posts:179


01/10/2020 3:24 PM  
"Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations."

Maybe while you're modifying the CC&R's to exclude an entire profession you can also exclude anyone from the Board that is narrow minded and unable to make decisions on a case by case basis. After all, people that make wide sweeping generalizations are likely to take the same approach on many other topics that affect the Board.
CathyA3
(Ohio)

Posts:667


01/10/2020 3:40 PM  
Posted By NpB on 01/10/2020 3:16 PM


Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations.




Davis-Stirling sez:

https://www.davis-stirling.com/HOME/Realtors-on-the-Board

Quote:

"A "Realtor" on the board does not automatically create a conflict of interest. Real estate professionals can offer great insight into many aspects of the development. Potential conflicts of interest emerge when real estate agent/directors actively list and sell property in their associations. Some Realtors are careful to avoid conflicts and make excellent board members. Others are not so careful and the following conflicts sometimes emerge:..."

Their recommendation: the board should adopt an ethics policy (which of course applies to all board members)
NpS
(Pennsylvania)

Posts:3987


01/10/2020 3:51 PM  
I can only speak from personal experience. The longest serving member of my BOD is a realtor. He's an OK guy, but he's high maintenance.

I remember when I first got on my BOD. I decided that I would go talk to any homeowner who had a complaint. But I didn't want to go alone. So I asked him to go with me. At the first visit to an owner's house, he handed the owner several of his business cards. After we left, I told him never to do that again. And that's the key distinction. I was there for HOA business only. He was there for something more. On later visits to other owners, he didn't hand out his card, but only because he knew I would confront him about it. He saw nothing wrong with handing out his card. Nothing I ever said has convinced him that it was inappropriate.

I've had lawyers and insurance brokers on my BOD. Some attempted to solicit business. I made noise about it, and they stopped. But somehow, my realtor/BOD member thinks this is his private hunting grounds.

Around 75% of the time, the BOD learns that an owner is thinking about selling before the house gets listed. Some ask if we know of anyone in the market to buy. Some specifically say they would like to do a private sale to avoid broker fees. When the BOD learns that someone is thinking about selling, I consider this to be privileged information. Does he? No. He starts soliciting to get the listing. He's only 1 of 6 realtors living in my community. Why should he get 100% of the leads? And why should the BOD have to be careful about what they say in front of him?

A couple of years ago, a tenant was thinking about buying the house he was renting. But the tenant knew that the HOA had some major tree projects in the works (removals and plantings). What we did or didn't do might affect what the tenant was willing to pay. It also might affect whether the tenant used our realtor/BOD member as his agent on the purchase. I saw this as a huge conflict. He didn't. I even got an opinion letter from the HOA lawyer - I asked around half a dozen questions on which conversations and which BOD votes the realtor should participate in. Also, what information could our realtor/BOD member share with the tenant. A key distinction between the lawyers' answer and the realtor/BOD member's perspective was on whether a conflict existed when a potential client was involved. The lawyers said yes. He said no. In the end, it didn't matter because most of the other BOD members got pissed at me for making a fuss. Wasn't a big enough issue in their eyes to get worked up about.

Many more stories I could tell, but I'll end on a discussion of fiduciary responsibility. The Association of Realtors hammers into every realtor's head that they have a fiduciary duty AS A REALTOR - TO THEIR CLIENT. It's a liability issue. Get the best deal you can for the client. But really - How often does the best interest of the Buyer or Seller align with the best interest of the HOA. Best deal for the client might mean that the client should try to pay less to the HOA, wouldn't it? Or get the HOA to agree that less work is needed to bring the house up to HOA standards? How can you be a fiduciary for both the client and the HOA?

With all the "training" he gets from the Association of Realtors about being a fiduciary to his client, I don't think he can deal with anything that comes from a contrary point of view. His realtor fiduciary responsibility is bouncing around in his head every waking hour. Personally, I think he's clueless about any other "fiduciary" responsibility.

In the end, nothing will change. We struggle to get anyone to run for the BOD. He'll never step down. Board member attitudes are split. The passive ones don't want any conflict. The assertive one will push back, but the effect will only be short term. He'll be at it again as soon as there's another real estate opportunity.

Sikubali jukumu. Read all posts at your own risk.
SheliaH
(Indiana)

Posts:2882


01/10/2020 4:38 PM  
One of our board members is a realtor and has sold homes in this community. He was president when I joined the board and now he's treasurer. He also lives in the community and since I've known him, I've never had a concern about conflict of interest. In fact, I remember two or three times when he declined to participate in a discussion/vote on an issue where he had a conflict of interest.

My primary concern has been his slight tendency to favor the investor owners (at one point they seemed to be the only ones buying homes!). Last year, he said something about wanting more investor owners on the board and I said "with all due respect...," And then spoke in no uncertain terms about my concerns. It was one of those agreeing to disagreeing moments and that was that.

I think you have to consider what would be a conflict of interest with the board membership an eye on it. He's not the only person who could have one (and there always realtors). Make sure everyone knows they've expected to watch for them in themselves, disclose it immediately and recuse themselves if the conflict can't be resolved. Since homeowners vote for board members it's up to them to ask the questions. If you're concerned, you need to speak up in front of him or her (in a professional manner, or course) listen before you respond further and then let everyone decide for themselves.


SheliaH
(Indiana)

Posts:2882


01/10/2020 4:41 PM  
Dang tablet - I meant to say realtor aren't the only ones who can have conflicts of interests sometimes those conflicts are even worse.
GenoS
(Florida)

Posts:3495


01/10/2020 5:38 PM  
Posted By NpB on 01/10/2020 3:16 PM
Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations.

That might be technically true. But I think such a restriction stands a good chance of being found arbitrary and/or capricious if challenged.
AugustinD


Posts:2411


01/10/2020 5:54 PM  
Posted By GenoS on 01/10/2020 5:38 PM
Posted By NpB on 01/10/2020 3:16 PM
Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations.

That might be technically true. But I think such a restriction stands a good chance of being found arbitrary and/or capricious if challenged.
I agree. I believe I have seen case law where a HOA tried to prohibit a certain "class" of members from being able to run for the board. The court said, nope, not allowed.

Just because, say, 75% of the members vote to change the CC&Rs to xyz does not mean xyz will pass the "fair and reasonable" test the courts have to apply from time to time. Property rights, such as eligibility to serve on a HOA board and so have more control over one's property, may not be removed casually.
MelissaP1
(Alabama)

Posts:8922


01/10/2020 7:03 PM  
I don't get the whole "Real Estate" agents are conflict of interest on HOA boards. HOA's don't deal in real estate. They are selling or buying real estate. It's a corporation set up by neighbors so they can collect funds to pay for it's expenses. Only requirement in MOST HOA's is that you are a member by virtue of home ownership.

Don't get me wrong I have plenty of friends that are Realtors. I've even thought of doing it myself. However, Realtors are basically the "Used car salespeople" of real estate. Don't mean that as an insult. It's just Realtors are not created equal and they are just sales people. It just happens to be homes/land they are selling.

So why can't a realtor be on a board if they are homeowner/members in the HOA. You only give people the power or the idea of power. The realty is that it's a warm body on the board.

Former HOA President
MelissaP1
(Alabama)

Posts:8922


01/10/2020 7:04 PM  
Oops left the word "NOT" selling or buying Real Estate....

Former HOA President
GeorgeS21
(Florida)

Posts:1877


01/10/2020 8:16 PM  
NpB,

You are proposing a nonsensical restriction.
NpB
(Arizona)

Posts:112


01/10/2020 9:01 PM  
Posted By AugustinD on 01/10/2020 5:54 PM
Posted By GenoS on 01/10/2020 5:38 PM
Posted By NpB on 01/10/2020 3:16 PM
Correct, but homeowners can amend the CC&Rs to prohibit real estate agents and brokers from serving on the Board, or the state legislature can pass a law enacting such statewide for planned communities and condo associations.

That might be technically true. But I think such a restriction stands a good chance of being found arbitrary and/or capricious if challenged.
I agree. I believe I have seen case law where a HOA tried to prohibit a certain "class" of members from being able to run for the board. The court said, nope, not allowed.

Just because, say, 75% of the members vote to change the CC&Rs to xyz does not mean xyz will pass the "fair and reasonable" test the courts have to apply from time to time. Property rights, such as eligibility to serve on a HOA board and so have more control over one's property, may not be removed casually.





A job title or profession is not a legally protected class under federal or state statute.
NpB
(Arizona)

Posts:112


01/10/2020 9:22 PM  
Posted By MelissaP1 on 01/10/2020 7:03 PM
I don't get the whole "Real Estate" agents are conflict of interest on HOA boards. HOA's don't deal in real estate. They are selling or buying real estate. It's a corporation set up by neighbors so they can collect funds to pay for it's expenses. Only requirement in MOST HOA's is that you are a member by virtue of home ownership.

Don't get me wrong I have plenty of friends that are Realtors. I've even thought of doing it myself. However, Realtors are basically the "Used car salespeople" of real estate. Don't mean that as an insult. It's just Realtors are not created equal and they are just sales people. It just happens to be homes/land they are selling.

So why can't a realtor be on a board if they are homeowner/members in the HOA. You only give people the power or the idea of power. The realty is that it's a warm body on the board.





A private corporation can legally discriminate against people not a in protected class. Some corporations (HOAs) even have language in the CC&Rs that suspend voting rights or common area usage for members who are in arrears in paying their monthly HOA dues. A real estate agent's income dependent on the number of sales the agent conducts and the sales prices of those homes. The higher the sales price of the home, the more income for the agent. Agents have communicated to our Board that spending HOA funds on cosmetic beautification improvements, many of which are optional , will increase property values. A lot of people running for Boards pledge to increase property values (which obviously sounds great, who doesn't want higher property values?) but the default response 100% of the time on how to achieve that is to spend HOA money on cosmetic improvements.
MelissaP1
(Alabama)

Posts:8922


01/10/2020 11:17 PM  
Any HOA board member can do that. AHOA does NOT keep home values. Their purpose is to keep homes ATTRACTIVE to potential buyers so they will pay the desired prices. Having a Realtor skillset for doing this is beneficial.

Realtor is a job like anyone else. The do NOT work for the HOA nor do they spend more dues than any other member. They may sell home in the HOA because it is available to do so.

Do not get why Realtor is such an issue. They are just like any other member. Just may have the professional skills for knowing importance of selling property effects the HOA bottom line.

Former HOA President
CathyA3
(Ohio)

Posts:667


01/11/2020 5:30 AM  
Posted By NpS on 01/10/2020 3:51 PM
I can only speak from personal experience. The longest serving member of my BOD is a realtor. He's an OK guy, but he's high maintenance.

I remember when I first got on my BOD. I decided that I would go talk to any homeowner who had a complaint. But I didn't want to go alone. So I asked him to go with me. At the first visit to an owner's house, he handed the owner several of his business cards. After we left, I told him never to do that again. And that's the key distinction. I was there for HOA business only. He was there for something more. On later visits to other owners, he didn't hand out his card, but only because he knew I would confront him about it. He saw nothing wrong with handing out his card. Nothing I ever said has convinced him that it was inappropriate.

*** snipped for brevity ***


With all the "training" he gets from the Association of Realtors about being a fiduciary to his client, I don't think he can deal with anything that comes from a contrary point of view. His realtor fiduciary responsibility is bouncing around in his head every waking hour. Personally, I think he's clueless about any other "fiduciary" responsibility.

In the end, nothing will change. We struggle to get anyone to run for the BOD. He'll never step down. Board member attitudes are split. The passive ones don't want any conflict. The assertive one will push back, but the effect will only be short term. He'll be at it again as soon as there's another real estate opportunity.




What you are objecting to is his **behavior**. If this person were selling insurance or annuities or who knows what, he would almost certainly still be using his position on the board to gain clients for his personal benefit. And that would be equally bad.

A board can adopt a code of ethics that would prohibit such behavior, and it would apply to all directors. That's OK. Prohibiting a subset of homeowners from serving on the board for something arbitrary such as their profession, regardless of their character and abilities, would likely be shot down if someone challenged it in court.

I've known some realtors who are stinkers, and I also know others who are scrupulously honest. It's unfair and short-sighted to tar all of them with the same brush, especially when capable board members are in such short supply.
AugustinD


Posts:2411


01/11/2020 7:41 AM  
Posted By NpB on 01/10/2020 9:01 PM
A job title or profession is not a legally protected class under federal or state statute.
As I believe CathyA3 indicated, it's not about "discrimination" in the sense you mean it. It's about removing the contractual rights delineated in the governing documents (and possibly state statute). Your HOA's governing documents (and possibly state statute) are clear about what rights a member has. To amend the contract to remove certain people's rights (but not others), because of their profession, is arbitrary, capricious and a fundamental breach of the contract. It would never pass the "fair and reasonable" test for amending a Declaration.
MarkM19
(Texas)

Posts:506


01/11/2020 7:53 AM  
So while we are down in the weeds here is another class that could have a distinct advantage being a Board Member.

Mortgage Broker

They see the homeowners that are behind on dues. Maybe they need new Financing. Maybe their friends that by distressed properties start buying homes and getting finance from the Board member. No doubt that having inside information can help in many lines of work.

I am not sure I would vote to not allow certain classes of people to run for a Board seat. I would like to know what their profession is and if I happened to be running against them for my seat would make it a point to say the pitfalls .
NpS
(Pennsylvania)

Posts:3987


01/11/2020 8:15 AM  
Posted By CathyA3 on 01/11/2020 5:30 AM
What you are objecting to is his **behavior**. If this person were selling insurance or annuities or who knows what, he would almost certainly still be using his position on the board to gain clients for his personal benefit. And that would be equally bad.

A board can adopt a code of ethics that would prohibit such behavior, and it would apply to all directors. That's OK. Prohibiting a subset of homeowners from serving on the board for something arbitrary such as their profession, regardless of their character and abilities, would likely be shot down if someone challenged it in court.

I've known some realtors who are stinkers, and I also know others who are scrupulously honest. It's unfair and short-sighted to tar all of them with the same brush, especially when capable board members are in such short supply.

Thanks for your thoughts Cathy.

Like you and others, I don't believe you could or should attempt to restrict a particular profession from serving on the BOD. But I do believe that, depending on the circumstances, BOD members with a perceived conflict of interest should have only limited participation in (1) BOD discussions prior to a vote, and (2) that BOD vote. In my request to our HOA lawyers for an professional opinion, I laid out half a dozen scenarios and asked (1) should realtor be part of the BOD discussion (able to influence the outcome), (2) should realtor vote (able to affect the outcome directly), and (3) should realtor discuss certain aspects of the issues with the potential client. These are the fine-tune distinctions that I don't think the other BOD members understood - So for me, it was important to have those questions and answers spelled out.

That said, I don't think this is just about one person's behavior. Nor is it about everyone in a profession. But the question I have is - Why to realtors tend to cross the line more often than other professionals?

One reason is access to privileged information. A BOD doesn't typically know when a homeowner is going to be in the market to buy insurance. But a BOD often gets advance knowledge that an owner will be selling soon. So the insurance salesman BOD member doesn't have any special advantage by being on the BOD. But the real estate salesman certainly does. Taking action that is personally advantageous based on privileged information is IMO the essence of a fiduciary breach.

Lastly, there's that training by the Association of Realtors. In training, my realtor BOD member learns that he has no fiduciary responsibility to a potential client - only to a signed client. But in the HOA attorney's letter, our lawyers explained that there is a potential conflict of interest (breach of fiduciary responsibility) even when the realtor BOD member is dealing with a potential client. Are those opposing points of view? And if what I just wrote seems a bit confusing, then you see the dilemma. When someone's been brainwashed a certain way, conversion to a way of thinking that can deal with two competing fiduciary responsibilities is very difficult -- In my case, near impossible. And not worth the effort. As I said in the prior post, he is high maintenance.

Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3987


01/11/2020 8:21 AM  
Posted By MarkM19 on 01/11/2020 7:53 AM
So while we are down in the weeds here is another class that could have a distinct advantage being a Board Member.

Mortgage Broker

They see the homeowners that are behind on dues. Maybe they need new Financing. Maybe their friends that by distressed properties start buying homes and getting finance from the Board member. No doubt that having inside information can help in many lines of work.

I am not sure I would vote to not allow certain classes of people to run for a Board seat. I would like to know what their profession is and if I happened to be running against them for my seat would make it a point to say the pitfalls .

Interesting point Mark.

While I don't think that preventing someone from serving on the BOD is the answer. I do believe that the candidate could be asked how she would handle the situation. Then again, if no one else is running, she'll get elected no matter what you ask.

Sikubali jukumu. Read all posts at your own risk.
CathyA3
(Ohio)

Posts:667


01/11/2020 8:57 AM  
Posted By NpS on 01/11/2020 8:15 AM


That said, I don't think this is just about one person's behavior. Nor is it about everyone in a profession. But the question I have is - Why to realtors tend to cross the line more often than other professionals?





I don't know that they do. I think it's more that you're in a position to find out about realtors' bad behavior and maybe not so much about other professional groups.

Unfortunately large amounts of money tend to encourage people to "forget" about proper conduct, and the rewards for doing so generally outweigh the negative consequences when someone is caught. Not sure what we can do about it other than changing that risk-reward ratior somehow.
KerryL1
(California)

Posts:6817


01/11/2020 9:02 AM  
Aren't director qualies in the bylaws v. the CC&Rs?? In CA, eff. 1/1/20, we may not prevent almost every "class" of person from being elected to the Board. I haven't read it carefully, but I'm certain no occupation could be a disqualified.

A few years ago a realtor moved in our 200+ unit urban high rise. She organized a nice community event with a guest speaker that was attended by a lot. It included some kind of goodie bag for attendees with her name & firm prominently on it. She soon ran for the Board and was elected.

She always wore her realtor's badge to board meetings and, as noted by someone else, was more interested in the aesthetics of the community than anything else. Still, we've had too few directors interested in aesthetics so in a way she provided some balance.

But she never had any other ideas, did not learn our governing documents, and seemed to be a director only for the publicity and exposure it offered. She did not finish her 2-year term.

Our best board was several years ago and was mainly educators or related to education: a former h.s teacher who eventually was in ed. admin; a former elementary teacher who became a loan broker; A retired community college teacher, purchasing agent for our large local school district and a retired college professor. What I liked best about this board was its very democratic tendencies and commitment to transparency and quick but thoughtful action.

Very recently we had two attorneys on the board (of 7, but one never attends meetings) and they were the opposite: elitist, secretive, bullying, and thought they new HOA law and our docs, but they did not. One ran for a 2nd term last October and was defeated along with other like-minded jerks, one of whom was retired economics prof, the other a retired stock market player. The other attorney resigned a month after the election.

Still, it seems to me to be the combination of directors and their interaction with one another, out of which emerges "good" v. "bad" boards.
LanceG1
(Georgia)

Posts:53


01/20/2020 11:21 PM  
FWIW, I've had the same issues. My take is, if your on the board you need to steer clear of conflict of interest.

Advertising your firm as part of your HOA duties. Over the line. Buying and selling houses for investments in the community you are on the board for, as a realtor doing transactions in that community etc. same thing.

MarkW18
(Florida)

Posts:382


01/22/2020 7:25 AM  
I tend to disagree with the premise that Real Estate Agents on HOA Boards are a bad thing.

Agents don't have inside information that a home is going on the market, nor are any HOA funds used in the transaction. An HOA will only find out after the house is listed. I would have more of a concern with a mortgage banker or attorney being on a board and seeing who is delinquent and trying to arrange a loan to help them out.

But, let's say my next door neighbor is a plumber and also on the Board and I had a shower leak that needed immediate attention. I might trust the more than someone from the outside.
NpS
(Pennsylvania)

Posts:3987


01/22/2020 12:02 PM  
Posted By MarkW18 on 01/22/2020 7:25 AM
Agents don't have inside information that a home is going on the market, nor are any HOA funds used in the transaction. An HOA will only find out after the house is listed.

Common occurrence 1 = Homeowner tells a BOD member that they're looking into selling and asks if BOD knows anyone in the market to buy.
Common occurrence 2 = BOD discusses and provided feedback to potential seller.
Common occurrence 3 = Realtor BOD member solicits the listing by mail. Doesn't tell BOD.

Thoughts?

Sikubali jukumu. Read all posts at your own risk.
MarkM19
(Texas)

Posts:506


01/22/2020 12:24 PM  
NpS,
All 3 occurrences could happen but probably not all that likely IMO. I guess you may have a few HOs that really like the Board and the work that they have done. That being said this group would probably not be looking to move out.

One of my main concerns is a Realtor, Mortgage Broker or Doctor on a Board gets free publicity and benefits from getting their name out to the Community. They also would tend to make less real life hard decisions if they effect some of their potential customers. The rest of the Board may find that they are not able to get some things done and run the HOA like the Business it is because of Politics.

Again I will say that whoever the Community elects becomes part of the Team and you need to work with them. They are just not normally going to get my support for the above reasons.
MarkW18
(Florida)

Posts:382


01/22/2020 1:33 PM  
I had been managing HOA's for a number of years and have never run into issues that NpS brought up.

As for professionals getting their name out in their community, there are a number of communities that have websites or distribute newsletters that have paid advertising.

MarkM19
(Texas)

Posts:506


01/22/2020 1:38 PM  
MarkW18,
You are right about Paid advertising.
CathyA3
(Ohio)

Posts:667


01/22/2020 2:04 PM  
Posted By MarkM19 on 01/22/2020 12:24 PM
NpS,
...
One of my main concerns is a Realtor, Mortgage Broker or Doctor on a Board gets free publicity and benefits from getting their name out to the Community. They also would tend to make less real life hard decisions if they effect some of their potential customers. The rest of the board may find that they are not able to get some things done and run the HOA like the Business it is because of Politics.
...




I think that's an unavoidable byproduct of having any professionals on the board who could benefit from getting their names out there, even if they don't actively try to solicit business. Homeowners tend to go to folks they know when they need something. The only way to stop it is to not allow the professionals to serve on boards at all, which we've already said is a non-starter.

And you'll always have board members who are afraid to make hard decisions because they don't want their neighbors to be angry at them. "I gotta live with these folks" is a common refrain. And I understand their point while acknowledging that it creates problems.

(Just as an aside, I ended my board service with some spiffy additions to my resume and a portfolio of work - web sites, newsletters, and the like - that I could use to earn money. So you could say that I'm now in a position to benefit financially from my board service. But again it's an unavoidable byproduct of doing the work. I suspect that many former board members are in similar positions since employers often look favorably on skills that people develop while doing volunteer work.)
LanceG1
(Georgia)

Posts:53


01/22/2020 2:56 PM  
Just as an FYI, I'm not against realtors being on the board. I'm just saying that I've experienced similar personality traits. The big thing is ensuring that there are not conflicts of interest and if there are that there is a way to address them. For example, if a realtor showed or listed homes in a community that they are also on the board for that would be a conflict of interest. If they worked a different area etc. and agree not to do either during the board term then it is probably OK. Advertising gets really tricky because you don't want the board to officially endorse vendors.

For example, I had a roofing guy replace my roof. He asked me if I could talk to a couple of neighbors and told me that he would be able to get me a finders fee. Because I'm on the board I gently told him that I would think about it but that I probably can't do that because this would be a conflict of interest. Some people like to play it fast and loose, but I'd rather keep my nose clean on this because it feels like the right thing to do.

Lance
MarkW18
(Florida)

Posts:382


01/22/2020 3:46 PM  
Posted By LanceG1 on 01/22/2020 2:56 PM
Just as an FYI, I'm not against realtors being on the board. I'm just saying that I've experienced similar personality traits. The big thing is ensuring that there are not conflicts of interest and if there are that there is a way to address them. For example, if a realtor showed or listed homes in a community that they are also on the board for that would be a conflict of interest. If they worked a different area etc. and agree not to do either during the board term then it is probably OK. Advertising gets really tricky because you don't want the board to officially endorse vendors.

For example, I had a roofing guy replace my roof. He asked me if I could talk to a couple of neighbors and told me that he would be able to get me a finders fee. Because I'm on the board I gently told him that I would think about it but that I probably can't do that because this would be a conflict of interest. Some people like to play it fast and loose, but I'd rather keep my nose clean on this because it feels like the right thing to do.

Lance



Did ANY money go to the vendor or real estate agent from the HOA itself? If not, what is the conflict?
NpS
(Pennsylvania)

Posts:3987


01/22/2020 4:06 PM  
Posted By MarkM19 on 01/22/2020 12:24 PM
NpS,
All 3 occurrences could happen but probably not all that likely IMO. I guess you may have a few HOs that really like the Board and the work that they have done. That being said this group would probably not be looking to move out.

One of my main concerns is a Realtor, Mortgage Broker or Doctor on a Board gets free publicity and benefits from getting their name out to the Community.

The triple play I described is very likely in my HOA. 11 houses sold in the last 3 years. BOD knew about 9 of them before the house got listed.

Has nothing to do with liking the BOD. Housing market inventory is very low here. Our houses rarely last on the market for more than 30 days. People are thinking - If I can avoid paying 6% in commissions, that's a big deal - So they reach out to the BOD in the hopes of getting a private sale.

I have no issue with people getting free publicity as a BOD member. I do have a problem with people who believe this is their private turf. We have 6 realtors who live here. Why should 1 person get to scoop on the other 5 just because he's on the BOD.

Regarding your comparison to Mortgage Brokers and Doctors, I think there's some big differences.

1. It takes about 2 to 3 months to get a non-emergency appointment with most of the doctors I know. They're not looking for business.

2. Mortgage broker. I see what you're saying. I think we're on the same page with that one. There's information that she wouldn't have access to if she wasn't on the BOD. Makes me uncomfortable.

3. Many realtors are lucky if they list 4 or 5 houses per year. Listing agent gets somewhere near 1.5% of selling price. Let's say a house sells for $250k. That produces $3,300 in a single transaction to the realtor. If they also represent the buyer, the one house could easily generate over $6k in income. I don't know how that compares with a mortgage broker, but IMO, that's a lot of low hanging fruit that's hard to ignore.

Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3987


01/22/2020 4:08 PM  
CORRECTED:

Posted By MarkM19 on 01/22/2020 12:24 PM
NpS,
All 3 occurrences could happen but probably not all that likely IMO. I guess you may have a few HOs that really like the Board and the work that they have done. That being said this group would probably not be looking to move out.

One of my main concerns is a Realtor, Mortgage Broker or Doctor on a Board gets free publicity and benefits from getting their name out to the Community.
The triple play I described is very likely in my HOA. 11 houses sold in the last 3 years. BOD knew about 9 of them before the house got listed.

Has nothing to do with liking the BOD. Housing market inventory is very low here. Our houses rarely last on the market for more than 30 days. People are thinking - If I can avoid paying 6% in commissions, that's a big deal - So they reach out to the BOD in the hopes of getting a private sale.

I have no issue with people getting free publicity as a BOD member. I do have a problem with people who believe this is their private turf. We have 6 realtors who live here. Why should 1 person get to scoop on the other 5 just because he's on the BOD.

Regarding your comparison to Mortgage Brokers and Doctors, I think there's some big differences.

1. It takes about 2 to 3 months to get a non-emergency appointment with most of the doctors I know. They're not looking for business.

2. Mortgage broker. I see what you're saying. I think we're on the same page with that one. There's information that she wouldn't have access to if she wasn't on the BOD. Makes me uncomfortable.

3. Many realtors are lucky if they list 4 or 5 houses per year. Listing agent gets somewhere near 1.5% of selling price. Let's say a house sells for $250k. That produces $3,750 in a single transaction to the realtor. If they also represent the buyer, the one house could easily generate over $7k in income. I don't know how that compares with a mortgage broker, but IMO, that's a lot of low hanging fruit that's hard to ignore.

Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3987


01/22/2020 4:35 PM  
Posted By CathyA3 on 01/22/2020 2:04 PM
I think that's an unavoidable byproduct of having any professionals on the board who could benefit from getting their names out there, even if they don't actively try to solicit business. Homeowners tend to go to folks they know when they need something. The only way to stop it is to not allow the professionals to serve on boards at all, which we've already said is a non-starter.

And you'll always have board members who are afraid to make hard decisions because they don't want their neighbors to be angry at them. "I gotta live with these folks" is a common refrain. And I understand their point while acknowledging that it creates problems.

I've heard but I haven't seen that my realtor BOD member tells people that he's a BOD member here in his realtor solicitation letter to members of my community.

Hmm ... What impression do you think that has on homeowners?

Sikubali jukumu. Read all posts at your own risk.
MarkW18
(Florida)

Posts:382


01/22/2020 6:15 PM  
Maybe for everyone's sake the best person to be a board member is someone who has buried their heads in the sand for the past 10 years and had taken themselves completed off the grid and had no contact with the real world. My guess is that should clear up any potential conflict of interest. They should make a wonderful addition to any board!
MarkM19
(Texas)

Posts:506


01/22/2020 6:42 PM  
MarkW18,
Thanks for the exaggerated example. We all know that Boards are lucky to get Volunteers of any shape or size.

I personally had 39 years in the same Profession and my Skills and knowledge could have been used in many areas in my HOAs for my personal gain. If I wanted to profit from my position I could have very easily. I have more respect for the office and what people think of me to ever take any advantage or any compensation for any volunteer job I take. It all comes down to what your moral code is and also what a real "Code Of Conduct" says. All Boards should have one signed by board members. I was the Police in my HOAs so I always have a keen eye on what others may think of the work I do. It is always volunteer and never more than how I can help get the HOA the best service possible. I think if every Board member can aske themselves a simple question before every decision they make it would be "Is the best thing for the HOA or is it the best thing for Me".
NpS
(Pennsylvania)

Posts:3987


01/22/2020 7:28 PM  
Posted By MarkM19 on 01/22/2020 6:42 PM
MarkW18,
Thanks for the exaggerated example. We all know that Boards are lucky to get Volunteers of any shape or size.

I personally had 39 years in the same Profession and my Skills and knowledge could have been used in many areas in my HOAs for my personal gain. If I wanted to profit from my position I could have very easily. I have more respect for the office and what people think of me to ever take any advantage or any compensation for any volunteer job I take. It all comes down to what your moral code is and also what a real "Code Of Conduct" says. All Boards should have one signed by board members. I was the Police in my HOAs so I always have a keen eye on what others may think of the work I do. It is always volunteer and never more than how I can help get the HOA the best service possible. I think if every Board member can aske themselves a simple question before every decision they make it would be "Is the best thing for the HOA or is it the best thing for Me".

Well said Mark. Would be nice if we all shared the same moral code.


Sikubali jukumu. Read all posts at your own risk.
MarkW18
(Florida)

Posts:382


01/22/2020 8:45 PM  
I think "moral code" today is a thing of the past.
LanceG1
(Georgia)

Posts:53


01/22/2020 9:28 PM  
In this case, the houses in question have shingles that have been discontinued and are known to be defective. In Georgia, if you get damage on them that can be linked to a storm most insurance companies will replace the roof for the cost of your deductible. These homeowners have not inquired about getting new roofs, though they are starting the show the signs of algae that roofs of this age (14 years) gets. The guy from the roofing company wanted me to reach out to these homeowners (unsolicited) and give them his number as a referral to get an inspection and if it needs replacement to do it. He also offered me a finders fee if he ended up getting the business.

It's one thing if they ask me who I used and I tell them who I used and that I liked tneir work. It is another to do what I was asked to IMHO.
LanceG1
(Georgia)

Posts:53


01/22/2020 9:29 PM  
Sadly that is very true.
FredS7
(Arizona)

Posts:919


01/23/2020 9:39 AM  
Add a line for "profession" on the candidate's statement form, and let the voters decide.
JeffT
(Maryland)

Posts:80


01/24/2020 12:07 PM  
I agree with not allowing certain class of people to be candidates. The BOD tried to keep me from being a candidate. A little different scenario but one of the current BOD members quoted a lawyer with the phrase "appearance of impropriety" - love that phrase as a reason for keeping me off of the BOD.

I say that a home improvement contract that owns a condo in the community and solicates and performs home improvement for other homeowners in the community would be considered "appearance of impropriety" whether he is or not. This person would be creating/changing architectural rules that he could be getting business from, sending violations to owners for repair, painting, etc. that he would be getting business from, awarding contracts for roofing, painting, siding replacement, landscaping, etc. All things that he does. He could have a quid-pro-quo with his buddies in the home improvement business.

People have commented that this type of person would have the right as a property owner so that he would be able to protect his property. So, is "appearance of impropriety" a reason for preventing someone from being on the BOD?

My particular case was a little different, but the "appearance of impropriety" should pertain to all.
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