Director conflicts of interest

Common Elements summary — Section 617.0832 governs how a board handles a transaction in which a director has a personal financial interest. The transaction is not automatically void, but it must be approved either (a) by a majority of the disinterested directors after full disclosure of the conflict, or (b) by the members after full disclosure, or (c) the transaction must be fair to the corporation at the time it is authorized. For HOA and COA boards this section is the legal frame for the recurring question: "Can a board member's spouse, business, or relative get a contract from the association?" The answer is yes if the conflict is disclosed, the interested director recuses, and the remaining disinterested directors approve — and ideally if the deal is on arm's-length terms documented against competitive bids. The mistake boards make is treating the disclosure as optional or burying it in the minutes in vague language. Spell out the conflict in writing, identify the interested director by name, and record the recusal. A clean record under 617.0832 turns a future "self-dealing" lawsuit into a paper-tiger claim.

Not legal advice. Click through to the official source for statutory text.