Conflicts of Interest Within Your HOA

While it’s easy to forget, an HOA is a business. Like in all businesses, the people with the power (particularly the board members) can develop conflicts of interest, which can devastate the community. shutterstock_345579641Check out these three questions that can help you understand and avoid conflicts of interest within your HOA.

What Is a Conflict of Interest?

Being a board member can be difficult because they must set aside their personal interests and focus on what’s good for the community. However, they are only human and may fall victim to exploiting the HOA for their own personal gain. These conflicts of interest can range from minor to severe, and the board member may not even realize there is a conflict of interest. However, they all have one thing in common: the board member gets something out of an arrangement that was not in the HOA’s best interest.

What Conflicts of Interest May Your HOA Face?

Most conflicts of interest within an HOA aren’t cutthroat, because HOAs aren’t giant companies with billions of dollars. It’s possible for a board member to take hundreds or thousands in bribes for throwing work at a vendor, but most of the time, they are just sloppy mistakes. One common conflict of interest is a special favor. A board member may have a friend who is a painter, so the board member asks to send work their way. Another conflict of interest you see in HOAs occurs when an employee of the HOA buys a unit and becomes a member of the board or even president of the board.

How Can Your HOA Deal With Conflicts of Interest?

The best way your HOA can deal with conflicts of interest is to avoid them from the beginning. This may mean preventing certain people from serving on the board altogether. If you do have an HOA employee who owns a home within the community, it may be best to write the bylaws so they prevent that member from serving on the board. If you have board members with family who own a specific business, you may want to add a blurb in the bylaws about not hiring family members of board members.

Conflicts of interests within HOAs aren’t usually intentionally deceitful, and people may not even realize what they are doing is wrong. That being said, they should still be avoided because the community should always be put first.

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