Q. I am a licensed real estate agent that lives in a community association. I have represented people who have purchased homes within the community and people who have sold their homes. I have been informed by the President of the board that I may not serve on the board because my work as an agent conflicts or may conflict with my responsibilities as a board member. The President has requested that I sign a statement acknowledging his conclusion.
What are your thoughts?
A. I have the following comments:
1. The fact that you have a real estate license and represent buyers and sellers within the community does not by itself create a conflict of interest between you and the association, buyer or seller.
2. While it is possible that a conflict could develop between you and the association, or a prospective buyer or seller of a home in your community, this is also possible with unlicensed board members.
3. Should a conflict of interest develop between any board member and the association, or a potential buyer or seller, any such conflict would not disqualify the person from serving on the board. It would simply mean that the particular board member could not vote on a matter involving the subject of the conflict.
4. The fact that a licensed board member knows that a seller is in foreclosure does not create a conflict. The fact that a seller is in foreclosure must be disclosed by an agent to a prospective buyer whether the agent is on the board or not.
5. Business that is conducted outside of executive sessions must be reflected in the association's minutes which is information routinely provided to prospective buyers. Consequently, this information is not confidential and providing it to potential buyers would not by itself create a conflict.
6. Should a seller be delinquent in paying his or her assessments, that information would be confidential and should not be disclosed to a prospective purchaser by any board member. The fact that a licensed board member has such information does not create a problem any more than an agent knowing that a seller will accept a certain price, or a buyer will pay a certain price, creates a problem. The agent is simply under a duty not to disclose such information to the other party. This is routine in the real estate business.
7. Sellers have an interest in making certain that all material facts are disclosed to a prospective buyer because failure to do so, could result in legal liability. An agent who is on the board of a community association is clearly in an excellent position to make a complete disclosure when representing a person who owns a home within that community.
8. Buyers have an interest in receiving and evaluating all material facts concerning a property that is under consideration for purchase. An agent who is on the board of a community association is in an excellent position to make a complete disclosure of all material facts regarding a home within that community.
9. During many years of practicing law as a homeowner association and real estate attorney, I have had the opportunity to observe and deal with many board members. While each board member is an individual with different skills, attributes, and attitudes, it is my opinion that real estate agents generally make excellent board members. Real estate agents tend to be professional in dealing with association business and the knowledge gained in preparing for the licensing exam has great value.
Article written by Michael T. Chulak, the founding partner of Michael T. Chulak & Associates, A Law Corporation. Questions can be sent by e-mail to MChulak@MTCLaw.com. Answers are general in nature. An attorney should always be consulted when legal advice is needed.
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