Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.
‘I live in a condo community where the HOA is comprised of unit owners. Over the past several years there have been several suggestions to hire a property management company. The property management companies even made proposals to save us over $50,000 a year from what we’re currently doing. We have been told time and time again that we are doing things the most expensive way possible. The council president is totally against this and dismisses the idea each time. We have several full time employees, which is not cost effective. We have a truck that the association owns, which is not cost effective. Well, come to find out, the President of the HOA is an insurance broker. Every policy he sells he makes a commission on. We have health insurance policies for the employees, vehicle insurance, and of course, all of the condo insurance. He makes a substantial amount of money off these policies. Is that a conflict of interest? The way I see it, he is against a property management company because he stands to lose a substantial amount of money. He is not thinking on behalf of the residents best interests, he is thinking of his own. If this is a conflict of interest, is there legal recourse? Thank you in advance.’
It sounds like a possible conflict of interest, yes. As for recourse, you’ll first want to look at your HOA documents, as there may be some provision there for dealing with such conflicts, or at least for challenges between owners and the association. Failing that, you might have to get involved in a potentially long and expensive lawsuit, though some states have provisions for less formal conflict resolution. This seems like a complicated enough situation that a consultation with an attorney is in order.
