Condo Board Conflicts Of Interest In Florida: How To Spot Self-dealing And What To Do

Most condo owners do not expect their board to be perfect. They expect the board to act like a fiduciary, spend association money carefully, and avoid deals that look like “my cousin’s company just got the contract.”

In Florida, conflicts of interest and self-dealing are not just “bad optics.” The Condominium Act has a dedicated conflict of interest statute that tells directors and officers exactly what they must disclose, how a conflicted deal must be approved, and how owners can unwind a transaction that was never properly disclosed. If you require legal assistance, contact our Miami, FL condo attorney today.

Conflict Of Interest Vs Self-dealing

A conflict of interest is any situation where a director or officer, or their relative, has a personal stake in a transaction involving the association. Self-dealing is the behavior that happens when that personal stake turns into an association contract, payment, or benefit.

Florida Statute 718.3027 requires directors and officers, and their relatives, to disclose any activity that may reasonably be construed as a conflict of interest.

The statute also creates a rebuttable presumption of a conflict in two common situations:

1. a director, officer, or their relative enters a contract for goods or services with the association
2. a director, officer, or their relative holds an interest in a business entity that does business with the association or proposes to do so

If you are seeing vendor relationships tied to board members or their family, you are not crazy for asking questions. Florida law expects those questions.

The Disclosure Rules Boards Cannot Skip

If a director or officer or their relative proposes to engage in a conflict-of-interest activity, the proposed activity must be listed on the meeting agenda, and all contracts and transactional documents related to it must be attached to the agenda.

That requirement is important because a lot of self-dealing thrives in vague agenda items like “maintenance discussion” or “vendor update.” If the board is considering a contract tied to a board member or their relative, the paperwork is supposed to be visible at the time the board is voting.

718.3027 also requires the association to comply with the conflict-of-interest framework in the not-for-profit corporate statute, 617.0832, and it requires the disclosures to be entered into the written minutes of the meeting.

Approval Requires A Supermajority Of The Nonconflicted Directors

Florida law does not let the conflicted director “sell the deal” and then vote themselves a contract.

Approval of the contract or transaction requires an affirmative vote of two thirds of all other directors present.

The conflicted person can attend and make a presentation, but then they must leave during the discussion and vote, and they must recuse from the vote.

Also, owners should know this detail: the conflicted director’s attendance still counts toward a quorum even though they must step out for the actual vote.

Owners Get A Second Bite At The Apple

Even if the board approves the conflicted deal, owners are not automatically stuck with it.

At the next regular or special meeting of the members, the existence of the contract or transaction must be disclosed to the members. Then, on motion of any member, the contract or transaction must be brought up for a vote and can be canceled by a majority vote of the members present.

If the members cancel the contract, the association is only liable for the reasonable value of the goods and services provided up to the time of cancellation, and it is not liable for termination fees, liquidated damages, or other penalties for canceling.

That piece is huge. It is designed to stop boards from locking owners into a bad deal by burying a self-interested contract inside a long-term agreement with an ugly termination clause.

The “voidable Contract” Leverage Owners Forget To Use

If a contract between the association and a director, officer, or their relative was not properly disclosed as required, the statute gives owners another enforcement tool.

A contract that has not been properly disclosed is voidable and terminates upon the filing of written notice terminating the contract with the board of directors, if that notice contains the consent of at least 20 percent of the voting interests of the association.

Translation: if the association tried to do a conflicted deal quietly, a relatively small group of owners may be able to force termination through a statutory process.

Removal Consequences If A Director Ignores The Board’s Vote

718.3027 also addresses what happens if the board votes against a conflicted activity.

If the board votes against the proposed activity, the director or officer, or the relative, must notify the board in writing that they will not pursue it or that they will withdraw from office. If the board finds the officer or director violated that requirement, the officer or director is deemed removed from office.

So if you are watching a board member keep pushing a deal after the board rejects it, that is not just annoying. It can be a statutory removal issue.

Don’t Ignore The Broader Fiduciary Duty And Kickback Rules

Florida law is explicit that officers and directors have a fiduciary relationship to unit owners.

The statute also states that an officer, director, or manager may not solicit, offer to accept, or accept a kickback. The current statute describes criminal consequences for knowingly accepting kickbacks in connection with association business.

In plain terms, if a vendor is providing “free” services, perks, gifts, or side payments tied to association contracts, that is not a harmless perk. It is a legal risk.

How To Spot Self-dealing Early

Most self-dealing leaves a pattern. Look for:

• a vendor relationship tied to a director, officer, or their third degree relative (Florida’s definition of relative is broad)
• recurring “emergency” approvals that avoid competitive bids and owner questions
• contracts that look overpriced compared to industry norms
• refusal to share the contract, scope, and invoices in a timely way
• contracts that include harsh termination penalties, then get used to pressure owners into silence

None of this proves illegality by itself. But it tells you where to focus your record requests and where to document inconsistencies.

What To Do If You Suspect A Conflict

1. Request the contract and agenda package that approved it, including all attachments. 718.3027 expects those documents to be attached to the agenda for the meeting.
2. Request the meeting minutes and look for the disclosure entry required by 617.0832 and referenced by 718.3027.
3. Ask who is related to whom in writing. The statute is explicit that relatives are included.
4. Track the vote mechanics: two thirds approval by the other directors, recusal, and the coenflicted person leaving during discussion and vote.
5. Bring it to the members meeting and move to vote on cancellation if the disclosure was made to the membership as required.
6. If disclosure was missing, evaluate the 20 percent consent notice option.

If you are dealing with a board that treats transparency like a threat, the smartest move is to stop arguing motives and start building a clean statutory record. Once you can point to missing agenda attachments, missing minutes disclosures, missing recusal, or improper approval voting, the dispute shifts from personal drama to compliance.

Condo Board Conflicts Of Interest And Self-dealing

Our practice includes representing condominium unit owners in disputes involving board conflicts of interest, self-dealing, and improper vendor relationships. We focus on disclosure requirements, voting rules, and statutory remedies available to owners.

If you suspect a condo board conflict of interest or self-dealing, contact Perez Mayoral, P.A. at 866-416-2368 or [email protected] to schedule a consultation.