IN THIS ISSUE Disability Accommodations & Third Party Liability Under the Fair Housing Act Nuisance Abatement From aggressive dogs to growing trees Understanding Indemnification What it is and why it's important
Understanding Professional Service and Design Contracts Water Use: Update on the Status of Drought Related Laws
SUMMER 2018
Helping Your Boards Handle Director Conflicts of Interest BY KARYN LARKO, ESQ. – EPSTEN GRINNELL & HOWELL, APC
A
conflict of interest (“Conflict”) exists between a director and the director’s association any time the personal, professional or financial interests of the director (who is referred to as the “Interested Director”) differ from those of the association. Stated another way, a Conflict exists when a director’s loyalty to the association is compromised by the director’s own interests. California Civil Code § 5350 identifies
some of the most common Conflicts faced by directors, which arise when: • A director requests to make architectural alterations to his/her property • A director requests the exclusive use of a portion of the common area • A director is in violation of the association’s governing documents and the board is faced with deciding what, if any, disciplinary action to take
• A board is faced with the decision on whether to assess a director for damage caused to the common area • A director requests a payment plan for delinquent assessments • A board must vote on whether to foreclose on a director’s property If not handled properly, a Conflict can lead to liability for the association based Continued on page 2