HOAleader.com - Tip of the Week - April 10, 2020
Published: Fri, 04/10/20
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Test Your Knowledge: When (If Ever) Must This HOA President Disclose a Client List?
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In this week's tip, we answer a reader's question about whether a president with clients in the community must cough up a client list immediately, rather than when a conflict arises.
Let's start with the premise that conflicts must be disclosed. And if this president must vote on an issue related to a client who's also a homeowner in the community, the president must disclose the relationship and recuse from any vote.
"If this involved a vendor that a board member was adamant about bringing into the association to do work and didn't want to disclose that the vendor was a client of the board member, that would be one thing," states Zuly Maribona, LCAM, a vice president at KW Property Management who leads the company's Region 2 office headquartered in Bonita Springs, Fla.
"But it involves homeowners who already live in the community and are clients of the president," she adds. "I believe it's only a conflict where there would be a vote. Board members in that situation would then have to recuse themselves from any vote involving those owners, and that could be done on a case-by-case basis."
True, agrees Edward Hoffman Jr., the founder of Barrow Hoffman, a law firm based in Warminster, Pa., who has represented community associations for more than 15 years. "Sometimes, there's an obvious conflict," he explains. "But the fact that someone has clients in the community may not be a conflict at all. If a situation arises with an actual client of the president, that president should say, 'That person's my client; I can't vote on this issue.'"
That said, Hoffman can see both sides of this to-disclose-or-not argument. "It would seem to me that it would be in the best interest of the association for the board member to disclose that he or she does have clients in the community," he states. "But whether to disclose potential conflicts is factually specific."
How should this president proceed? Our experts offer practical, helpful guidance in our new article: https://www.hoaleader.com/members/4094.cfm
Best regards,
Matt Humphrey
President
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