Conflict of interest does not disqualify owner from running for board


Question: Assume that a condominium employs a licensed community association manager. Is the manager’s spouse an eligible candidate for the condo’s board of directors? If yes, please specify to what extent the spousal board member must abstain from voting on board matters. — C.E.

Answer: Let’s assume, to start, that the spouse/potential candidate is generally eligible to be a candidate for the board (is an owner or other qualified person and is not otherwise limited by language in the governing documents). The simple fact of that person being married to the manager would not disqualify them from running for the board. Here’s how the analysis works.

Section 718.112, Fla. Stat. states that a unit owner or other eligible person may notify the association of his or her intent to be a candidate for the board. It further states that a unit owner desiring to be a candidate to serve on the board must be eligible to be a candidate at the time of the deadline to submit their notice of intent. If a board member is serving two-year terms, and if that person has served four consecutive terms (the Division has unofficially taken the position that this is measured from July of 2017), they cannot run again unless there are not enough candidates, or unless the board member is elected by two-thirds of the total voting interests.

The statute provides additional express reasons that a person would not be eligible to serve on the board. This includes if the person has been convicted of a felony and if his or her civil rights have not been restored for at least five years; if the person is delinquent in the payment of any monetary obligation to the association; and if the person has been suspended by the Division of Condominiums. Further, the fact that the statute requires the person to be “eligible” at the time of the deadline, as well as the fact that board members may stand for reelection “unless prohibited by the bylaws,” further suggests that the person could be subject to limitations contained in the governing documents, such as stricter term limits or provisions requiring residency in the community.

But, these are the only reasons that a person would not be qualified to be a candidate for the board. The statute does not say that the person is not qualified to be a candidate if their candidacy would violate some other unrelated provision of the statute. As a matter of statutory interpretation, it’s not possible to create provisions out of thin air. The Condo Act does not state that a person is not qualified to serve on the board if they are a spouse of the property manager, or if they would otherwise have a conflict of interest. So, there is no such restriction.

I appreciate that seems like the wrong result, but remember that these statutes are written and amended in small pieces. You ask your question based on the amendment added this year stating that an association may not employ or contract with any service provider owned by a board member or employ any person who has a financial relationship with a board member or officer or who is a relative of a board member or officer by blood or marriage within the third degree of consanguinity (for your interest, you can find consanguinity charts online). But, the fact that an association is prohibited from employing a director’s wife does not also mean that a person who is married to an employee of the association is not qualified to run for the board. Those issues are governed by completely separate statutory language, and, as appealing as it may be to do so, you can’t re-write the plain language of a statute based on reason. I have had similar inquiries regarding whether persons who are suing an association are eligible to be candidates for the board. Since there is no language saying that they are not, they in fact are. That’s how it works.

Now, I do think that, if this person is elected, there is at least an argument that the association is obligated to terminate the manager’s employment contract. If the wife has a nonterminable employment contract that creates even more complicated issues — but it still does not mean that the husband is not qualified to be a candidate.

You’ve asked additionally about conflict of interest. The statute contains explicit disclosure requirements, and this situation would clearly trigger those conflicts. The board member would not vote on any issues related to his wife’s employment, but otherwise, I can’t think of any other issues that would present an obvious conflict.

Ryan Poliakoff is a co-author of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living” and a partner at Backer Aboud Poliakoff & Foelster, LLP. Email questions to condocolumn@gmail.com. Please include your hometown.



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