Legal Question in Real Estate Law in California

Personal Relationship between homeowner and prospective management company

We are in the market for a new management company and one of our board members recommended her cousin. The prospective mgmt company (cousin's husband) says there is no conflict of interest since our homeowner/board member does not own an interest in the company and would excuse herself from voting for the company. Others see problems with inappropriate / informal passing of information, problems if the person is no longer on the board, and the potential for more nefarious ballot stuffing, etc, and pressure to keep the mgmt co even if there is dissatisfaction because the personal relationship. The mgmt co is located more than 30 miles (and in a different county) from our community, and is the only co being considered that is more than 10 minutes away from the community. The mgmt co also said in their interview (which the cousin hosted in her home) that he is giving us favorable pricing BECAUSE of the relationship with the homeowner. So what happens if she moves or is voted off the board?

In short--this relationship may be LEGAL, but is it a good idea to have a mgmt company that has a personal relationship to a homeowner?


Asked on 3/03/09, 12:23 pm

1 Answer from Attorneys
George Shers Law Offices of Georges H. Shers

Re: Personal Relationship between homeowner and prospective management company

The relationship is legal because it has been revealed and made very public and it is as to a non-government body. You are correct that it might not be wise as members of the association unhappy with what the company does may blame the Board for covering up for the Comapny because of the relationship. I doubt that the discount offered is so big as to jsutify this added headache. If some other members of the Board are also worried then why do what one members wants and the others are not positive about?

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Answered on 3/03/09, 5:29 pm


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