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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 37049
Experience:  Texas Attorney for 30 years dealing in real estate
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We have a man who owns and operates a home construction company

Customer Question

We have a man who owns and operates a home construction company in our community and is applying for President of the HOA. There is a conflict of interest if he were to be the President i.e., if there is a tie on a ballot regarding a building issue, which, we have a lot of as our community continues to grow, etc. His only income is derived by homes he builds in this community. He has much to gain and if he suggests "buddies'" etc., he could be receiving kickbacks, etc. The other members on the board are his "buddies," with their businesses that will all derive a plus from this. Right now, there is noone to contest him. I thought it was against Maryland HOA law to be receiving monies from a HOME OPERATED business in the community you want to resude as president. Any legal insight? Do you know Maryland law? Thank you.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.
Hi and welcome to JA. I am Ray and will be the expert helping you today.

You have legitimate reasons to be concerned.This may well be a conflict of interests.Anytime a builder is president of the HOA it has potential for trouble written all over it.

You certainly may raise this matter in front of the board and seek to informa other members of this problem.The laws of Maryland do not forbid it but certainly is has the appearance of a conflict as well as an actual one.

Reference.

http://www.neighborhoodlink.com/article/
Association/Directors_Officers_Conflicts_Interest

I would hope the board here would raise these issues and seek a differnt President.You should call him out if there is a meeting and seek to have his name removed if you can or organize a vote against it.These are serious legitmate issues that have not been addressed.

I would hope your board and fellow members would take notice of this.There have to be more neutral candidates that would preside in amore fair manner than a biilder.But this is pretty common that they try to muscle in and control the HOA as they have a financial interest in the building regulation and controls.

Maryland here has not seen filt to make this conflict an automatic bar but you may want to check your HOA rules and see if they have ti at that level.I have seen situations where law suits arise later on involving such conflicts and HOAs and it is easy to see trouble ahead for the HOA and its members .

I hope you are able to sway them that this is a bad idea on many levels.I appreciate the chance to help you today.
Expert:  Ray replied 1 year ago.

Holly there have been many suits against HOAs in Maryland and their officers for such conflicts of interests if the membership elects such officers..

http://www.hindmansanchez.com/resources/article/homeowner-suits-against-community-associations/

If you cannot defeat this person in an election then a civil suit may be your only remedy.They are real common in these kinds of situations in Maryland.They claim the officer has violated his fiduciary duties based on conflicts between his business and the HOA.

You raise a legitimate and future ongoing problem here if he is elected.

Thanks again.

Expert:  Ray replied 1 year ago.
.If you can leave a positive rating it is always much appreciated.

Holly thanks again.

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