Disclosing conflicts

What counts as a conflict you must disclose

A conflicting-interest transaction is any deal or decision where you have a direct or indirect personal stake: hiring your spouse's landscaping company, voting on a contract with a business you partly own, approving a vendor who also happens to be your employer. Nonprofit corporation law in most states does not treat this kind of transaction as automatically bad, or automatically void the moment it exists.

"a transaction with the corporation in which a director of the corporation has a direct or indirect interest."

Source: N.C. Gen. Stat. §55A-8-31(a), North Carolina General Assembly

The Community Associations Institute's model code states the underlying norm plainly: directors should disclose personal or professional relationships with any company or individual doing business, or seeking to do business, with the association.

Disclose before you vote, not after

Timing matters more than most board members realize, and it varies by state. Florida law sets a specific deadline; other states leave the timeline to your bylaws or written policy, so check both before assuming the Florida rule applies to you.

"disclose to the association any activity that may be reasonably construed to be a conflict of interest at least 14 days before voting on an issue or entering into a contract that is the subject of the conflict."

Source: Fla. Stat. §720.3033(6), Florida Legislature

Colorado takes a different approach: it requires every association to adopt a written policy defining what counts as a conflict, and spelling out how, and to whom, it must be disclosed, and whether disclosure means the director must step back from discussing or voting on the issue. If your association is in Colorado, or has copied a Colorado-style policy, that document, not a statute, sets your actual deadline and procedure.

Disclosing isn't always enough to keep your vote

In most states, disclosure opens a safe harbor: once you've told the board the material facts, the transaction survives challenge if disinterested directors, or disinterested members, approve it anyway, or if it turns out to have been fair to the association regardless of the vote. That three-path pattern shows up in North Carolina's and D.C.'s nonprofit corporation codes, and California builds the same idea into its own statutes.

But "I disclosed it" is not a universal pass to cast the vote yourself. California bars a director from voting at all on six specific self-interested matters, including discipline against them, an assessment for damage they caused, and review of a proposed change to their own unit, no matter how much they've disclosed. Your own state and bylaws may draw a similar hard line, or may leave the recusal decision to your written conflict-of-interest policy. Ask which one applies to you before the vote, not during it.