QUESTION: We have a board member whose live-in boyfriend is a licensed contractor. She gives him copies of the bids we get on various projects so he can submit a lower bid. Is this legal or ethical? Can board relatives even bid on projects?
ANSWER: It is clearly inappropriate for your ethically-challenged director to provide insider information to her boyfriend.
Problems. It is not illegal for a director's relative to bid on projects if done properly but doing so is fraught with peril. Most boards wisely disallow the practice because of the inherent problems when directors benefit from contracts awarded to themselves or relatives.
Censure. Your self-serving director should resign from the board if she wants her boyfriend to bid on HOA projects. If she refuses to resign and continues to leak information, she can be censured by the board and an executive committee created to review bids. In addition, your board should adopt an ethics policy.
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