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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 111502
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Following an investigation of the possible conflict of

Customer Question

Following an investigation of the possible conflict of interest. If *** *** and *****, it apears that both of them are in violation of California State law while serving on the **** **** Board. As a result of the conflict, described below, they should both be requested to resign from the **** *** Board and the management company should notify the membership of this action.
The conflict surrounds their relationship with each other, and with the contractor, *** *****.
1) California State law requires full disclosure by Board members in any areas that may even have the slightest appearance of a conflict of interest;
2) **** works for a company (Property Consultants *** **** aka ***) owned by *** ****, *****'s husband;
3) ***** ****** is an owner of General Roofing and is listed as a Board Member of the *** **** Boys & Girls Club where *** ****** is also listed as the 1st Vice President at the same organization;
4) *** and **** both voted for the letting of **** *****'s $420,000 multi-year contract, and owner paid additional scope work;
At no time was the business relationship between *** and **** disclosed to the Board or full membership, nor was the business relationship that **** had with ***** **** in their capacity as Directors at the Boys & Girls Club. As required by **** State law these types of relationships must be disclosed to the Board and membership. In addition, *** and *** should have recused themselves from voting for this contractor.
Due to their lack of transparency, and unethical conduct regarding these matters, they should both resign from the **** * Board of Directors or be potentially removed following the outcome of a membership vote to do so.
This breach of ethics brings into question other long term contracts that *** ******* has strongly supported and not been willing to change, including ***** **** and ***** ******** ********* (***). I recommend that all **** **** contracts should be re-bid at the earliest convenience following the resignation of **** and ****.
1.Using Edgewood to host annual yard sales (not approved by membership)
2.Obtaining FREE garage door for board members
3.Very poor communication with ***
4.General roofing poor documentation and customer service
5.Not informing membership of watering reductions
6.Regularly raising dues just under the limit where a vote is needed
7.Architectural approvals done after the fact
8.Approvals done by email where meeting should be held
9.Association votes not opened in public
10.Bids not opened in public
11.Bids only issued to firms selected by ***
12.Discriminatory practice (a set of homeowners with good condition lawn and the other group with dead lawn)
13.Sole decision maker for landscaping
14.Refusal to comply with CC&R (replace dead lawn)
15.Not keeping the highest standard of appearce for the community (very selective
16.Community contractors communicating directly with him instead of to the management company and then the management company communicating to the BOARD.
17.Giving inaccurate information to association members - roofing project he noted that the cost was insubstantial for owners without any siding.
18.Consistently not voting in favor of the lowest bidder.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
What is your specific question about this situation, as your claim is well written and well stated?
Customer: replied 1 year ago.
Is there a breach of fiduciary duty or other laws broken here? This is for Castro Valley, CA
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
It could indeed be a breach of fiduciary duty in CA, it is a conflict of interest as well. The breach of fiduciary duty has to show as you alleged above, that their failure to disclose caused some harm to the village, such as you paid higher prices than you should have costing everyone more and that these people did not properly care for the money and property entrusted to them by the members. You have to show in each instance they had an actual duty to protect the members from harm caused specifically by that conduct. So, for example, voting for their friends to get business and not taking lowest bids as required would be breaching their duty to protect the assets of members and the village.