Conflicts of Interest – Section 468.4335, (1)-(6), F.S.

Creates a requirement for CAMs and community association management firms to disclose conflicts of interest. A rebuttable presumption of a conflict of interest exists if any of the following occurs without prior notice: (a) a CAM, management firm (including directors, officers, and persons with financial interest in the firm), or a relative of such persons, enters into a contract for goods or services with the association, or (b) a CAM, management firm (including directors, officers, and persons with financial interest in the firm), or a relative of such persons, holds an interest in or receives compensation or anything of value from a business entity that conducts business with the association or proposes to do so.

Suppose an association receives and considers a bid that exceeds $2,500 to provide a good or service other than community association management services from a CAM, management firm (including directors, officers, and persons with financial interest in the firm), or relative of such persons. In that case, the association must solicit multiple competitive bids from other third-party providers for such goods or services.

The proposed activity must be disclosed as a conflict of interest, and copies of all contracts and transactional documents related to it must be attached to the agenda of the next board meeting. The disclosures of any possible conflicts of interest must also be entered into the written minutes of the meeting.

Approval of the contract (including a management contract between the community association and the CAM or community association management firm or other transaction) requires the affirmative vote of two-thirds of the directors present. The conflict of interest and the contract or other transaction must be disclosed to the members at the members' next regular or special meeting.

Suppose a conflict of interest in an existing contract entered into between a CAM or community association management firm and the board of directors was previously disclosed. In that case, the conflict of interest does not need to be additionally noticed and voted on during the term of such contract, but, upon renewal, must be noticed and voted in accordance with this Section.

If the board finds that a CAM or management firm (including directors, officers, and persons with financial interest in the firm), and relatives of such persons, have violated this Section, the association may cancel any such contract. If the contract is canceled, the association is liable only for the reasonable value of the management services provided up to the time of cancellation. It is not liable for any termination fees, liquidated damages, or other forms of penalty for such cancellation.

Failure to properly disclose a conflict of interest renders the contract with the CAM, management firm, or relative of such persons voidable. It terminates upon the association filing a written notice of termination with the board of directors that contains the consent of 20% of the voting interests of the association.

As used in this Section, the term "relative" means a relative within the third degree of consanguinity by blood or marriage.

— Board of Directors