Legal Question in Civil Litigation in California
We have an HOA board member who insists on buying materials for the building from her husbandís vendors. Some of these purchases are really questionable.
We have heard from one of the homeowners that, based on his past experience in another condominium complex, this is a conflict of interest and the board member should not do this. We have expressed our concern to this board member several times that she should stop doing business through her husbandís vendors and let the property management get bids and go by reputable vendors.
This board member challenges us back that there is nowhere in the law that says that there is any conflict of interest about what she is doing. As homeowners, we feel very uncomfortable and do not know what is right or wrong in this situation.
Please clarify Ė thanks.
3 Answers from Attorneys
She is absolutely wrong and can be stopped.
There is at least a perceived conflict of interest. Also there is a good possibility of her getting kick backs or even embezzlement. Just put it to vote and shot her down.
The function of the Board is to make policy decision with management then carrying them out. It should be the manager who buys materials. It is similar to Congress and the President; it is the executive branch that handles purchases. Your CC&R's should make this clear.