Question: In our upcoming association election, one of the board candidates is related to the owners of a company which does business in our condominium, through a substantial contract which was subject to competitive bidding. Does this disqualify the individual from running for the board? A.I. (via e-mail)
The Florida Condominium Act sets forth those situations in which a unit owner in ineligible for board service. Those situations include being financially delinquent by more than ninety days to the association, being a person who has been convicted of a felony and has not had their civil rights restored for at least five years, or being a person who has been removed from office by the Division of Condominiums. Such persons are ineligible to run for the board. The bylaws may also impose term limits, in which case someone desiring to be a candidate might also be ineligible if they are “termed out.”
A potential conflict of interest does not, in and of itself, normally disqualify a person from board service. Of course, the individual in question should abstain from participating in anything having to do with that contract and the contract must meet the requirements of Section 617.0832 of the Florida Not-For-Profit Act. Generally speaking, this law requires that the conflict be disclosed, and that the terms of the contract be fair and reasonable.
Further, in the condominium context, as to contracts or transactions between an association and one or more of its directors, “or any other corporation, firm, association, or entity in which one or more of its directors or officers are financially interested”, approval of the contract must be passed by two-thirds of the non-interested directors. The terms of the contract must also be disclosed to the members (unit owners) at the next scheduled members’ meeting, and the contract subject to a cancellation vote by the members, without penalty.