Conflicts of Interests Can Be Found in a Wide Net For Association Management Companies

On July 1, another Florida law took effect that focuses on condominium associations and the management companies that help operate the system. One focus of the new law is to control potential conflicts of interest with community management companies.

For instance, Susie Smith is the community manager for a condominium association and part of her compensation includes shares in her community association firm. One of the associations she manages needs a new insurance company and she recommends her husband’s company, Acme Insurance Company.

In most cases, Sally would disclose the conflict of interest at the onset. Sally would not be involved in the selection of the insurance company and the organization asked for competitive bids from multiple insurance companies.

In that case, it is the decision of the board to pick the best company for the job, regardless of the conflict. But, they made the decision fully aware of the conflict.

But under a new law, if Sally’s grandfather-in-law is a stockholder in Acme Insurance Company – and it is not disclosed to the association, the contract with the community association management company could be terminated instantly and without warning.

It’s a wide net for conflict of interests and one any association management company should take very seriously.

The attorneys at The Orlando Law Group represent more than 100 communities in Central Florida. If you live in Orlando, Winter Garden, Altamonte Springs, Kissimmee or anywhere throughout Central Florida, The Orlando Law Group is ready to help you.

What constitutes a conflict of interest?

It is pretty straightforward what the new law, HB 1021, says is a conflict of interest:
Read More.