Would You Hire this Man? Spotting Conflicts of Interest at Your HOA
September 16, 2011
In this week’s tip, we offer a refresher on dealing with HOA conflicts of interest. If you’re like most board members, you know you should avoid conflicts of interest. How would you have reacted in this real–life situation:
“A board president’s son is out of work,” explains Duane McPherson, president of the western region and Dallas⁄Ft. Worth divisions of RealManage, an association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas.
“He’s a general contractor. The association has work it needs done worth tens of thousands of dollars, and the board president wants to hire his son to do all the work. Not only that, but the board member is an investor–owner in several other associations, so he’s pushing to get his son to do all the work for all these associations.”
“The board member didn’t understand that’s a conflict of interest,” adds McPherson. “When that was pointed out, the board member became angry and talked the rest of the board members into hiring the son anyway! That’s an example of an extreme conflict of interest.”
“Most times, you can talk boards out of it by saying, ‘Hey, you need to excuse yourself from voting because you’re related to this person who has a vendor company,'” says McPherson. “Usually, board members will understand, even if the involved board member gets mad. But sometimes I as the manager get to the point where I can advise all I want, but I have to know sometimes boards will make the wrong decision.”
Test your skill in spotting potential conflicts of interest by reading of other sticky dilemmas in our new article, Would You Recognize These Three HOA Conflicts of Interest?
Best regards,
Matt Humphrey
President
Authors: WebMaster
