Conflicts of Interest on a Florida Association Board: What Must Be Disclosed, What Is Prohibited, and How a Related-Party Contract Is Approved

Jason Hamilton Mikes, JD, MBA
Founder & Managing Shareholder

• Published September 23, 2026
• Reviewed by Jason Hamilton Mikes, JD, MBA, September 23, 2026
• Florida Statutes as of July 1, 2026
• Applies to: Condominiums · HOAs · Cooperatives

Florida treats a contract between a community association and one of its own directors, officers, or their relatives as a presumed conflict of interest, and it prescribes what must happen before such a contract is signed. For condominiums, section 718.3027 requires written disclosure, listing on the agenda with the contract attached, approval by two-thirds of all other directors present, disclosure to the members with a right to cancel, and, in the statute's words, that the interested person "must leave the meeting during the discussion of, and the vote on, the activity" and "must recuse himself or herself from the vote." For homeowners associations, section 720.3033(2) requires disclosure at least 14 days before the vote, disclosure entered in the minutes, approval by two-thirds of the directors present, and disclosure to the members, who may cancel the contract. The two chapters part company here, and the difference is easy to miss. Chapter 720 contains no counterpart to the condominium leave-the-room and recusal requirement, and section 617.0832(4), which Chapter 720 incorporates, provides that the presence of or a vote cast by a director with an interest in the transaction does not affect the validity of an action taken under paragraph (3)(a) of that section if the transaction is otherwise authorized, approved or ratified as subsection (3) provides. That remains true after the Legislature rewrote Chapter 617 effective July 1, 2026. An HOA director with a disclosed conflict is therefore not required by statute to leave or to abstain. In our view a board should still have the interested director step out, because the record reads better and the cost of doing it is nothing — but that is practice, not law, and a board that keeps the director in the room has not broken a rule. In both, soliciting or accepting a kickback is a felony, and undisclosed condominium conflict contracts are voidable.

What counts as a conflict

The statutes define the relationships that trigger the rules rather than leaving the question to a director's sense of propriety. Under section 718.3027, a rebuttable presumption of a conflict exists when a director or officer, or a relative within the third degree of consanguinity by blood or marriage, either enters into a contract for goods or services with the association or holds an interest in a business entity that does business with the association or proposes to. Third-degree relatives include parents, children, siblings, grandparents, grandchildren, aunts, uncles, nieces, nephews, and great-grandparents, and the in-law equivalents of each. A director whose brother-in-law's company bids on the landscaping contract has a presumed conflict.

The definition reaches interests, not just ownership. A director employed by the roofing contractor, a director whose spouse is the insurance agent's partner, a director who receives referral fees from the management company: each holds an interest in an entity doing business with the association. Directors should also disclose relationships that fall outside the statutory definition but that owners would reasonably question, because the statute requires disclosure of "any activity that may reasonably be construed to be a conflict of interest." Chapter 720 now contains the same rebuttable presumption for homeowners association directors, officers, and their relatives, and requires the disclosure to be made at least 14 days before the board votes.

The condominium procedure

Section 718.3027 sets out the procedure when a director, officer, or relative proposes to engage in an activity that is a conflict. The steps below track the subsections of the statute as it reads in the 2026 Florida Statutes.

1. Disclose to the board any activity that may reasonably be construed to be a conflict (§ 718.3027(1)).
2. List the activity on the agenda of the board meeting, and attach all contracts and transactional documents to the agenda so that owners can see them before the meeting. The board must also comply with section 617.0832 and enter the required disclosures in the written minutes (§ 718.3027(2)).
3. At the meeting, the interested director, officer, or relative may attend and make a presentation about the proposed contract (§ 718.3027(4)).
4. After the presentation, the interested person "must leave the meeting during the discussion of, and the vote on, the activity," and an interested director "must recuse himself or herself from the vote." The statute adds that the interested director's attendance still counts toward the quorum for the meeting and the vote taken in his or her absence (§ 718.3027(4)).
5. The remaining directors vote. Approval requires "an affirmative vote of two-thirds of all other directors present" (§ 718.3027(2)). If the board votes against the activity, the director or officer must notify the board in writing that he or she will not pursue it or will withdraw from office, and a director the board finds to have violated the requirement is deemed removed (§ 718.3027(3)).
6. At the next regular or special meeting of the members, the existence of the contract must be disclosed to the members, and on the motion of any member it may be canceled by a majority vote of the members present; if canceled, the association owes only the reasonable value of goods and services provided to that point (§ 718.3027(2)).
7. The contract and the disclosures become official records and, for associations that maintain a website, must be posted there.

A contract that was not properly disclosed under the statute or section 617.0832 is voidable: it terminates upon the filing with the board of a written notice of termination carrying the consent of at least 20 percent of the voting interests (§ 718.3027(5)). Owners, in other words, can unwind a hidden conflict contract without a lawsuit.

Is a director-owned company barred altogether?

Not under the current text of Chapter 718. Earlier versions of the condominium act were widely read to prohibit an association from employing or contracting with a service provider owned or operated by a board member, but no such prohibition appears in the 2026 text of sections 718.111, 718.112, 718.3026, or 718.3027. The statute regulates the transaction instead: full disclosure, the agenda and attachment requirements, the interested director's departure from the room and recusal, approval by two-thirds of the other directors, disclosure to the members with a right to cancel, and the felony kickback prohibition. Many boards nonetheless adopt a policy against contracting with director-owned companies, both because the procedure is demanding and because owners rarely believe such a contract was awarded on the merits. Boards facing a proposal of that kind should obtain counsel's opinion before it reaches the agenda.

The homeowners association procedure

Chapter 720 borrows from the not-for-profit corporation act. When an HOA enters into a contract or transaction with a director, or with an entity in which a director is an officer or director or is financially interested, section 720.3033(2) requires the board to:

• comply with section 617.0832, which since July 1, 2026 no longer supplies a three-part safe harbor and instead decides who carries the burden of proof if the contract is challenged, as explained below;
• enter the disclosures in the minutes of the meeting;
• approve the contract by an affirmative vote of two-thirds of the directors present; and
• disclose the contract to the members at the next regular or special membership meeting, where, on motion of any member, it must be put to a vote and may be canceled by a majority of the members present. If canceled, the association owes only the reasonable value of goods and services provided to that point, and no termination fee or penalty.

What section 617.0832 now does. The Legislature rewrote Chapter 617 by chapter 2026-168, Laws of Florida, effective July 1, 2026. The section numbers did not move, but this one does a different job than it used to. The earlier version supplied a safe harbor with three alternatives: a conflict transaction was not void or voidable if the material facts were disclosed and the board approved it, or the members approved it, or the transaction was fair and reasonable to the association. The current version begins from fairness alone. Subsection (2) provides that a director's conflict of interest transaction that is fair to the corporation is not void or voidable. Subsection (3) then allocates the burden of proof in a proceeding challenging the transaction. If the material facts of the transaction and of the director's interest were disclosed to or known by the board and the transaction was approved by a vote of a majority of the qualified directors, or were disclosed to or known by the members and the transaction was approved by a majority of the votes cast by disinterested members, the person challenging the transaction must prove that it was not fair. If neither of those things happened, the person defending the transaction must prove that it was fair. Subsection (5) leaves a challenger free to assert and prove that a particular director or member was not disinterested.

For an HOA board the practical effect is narrow but real. The steps section 720.3033(2) requires have not changed, and a board that takes them has done what Chapter 720 asks. What has changed is what those steps are worth. Disclosure followed by approval by the directors who have no interest in the contract is now the thing that puts the burden on the owner who sues, rather than one of three ways to validate the contract in the first place. A board that discloses, enters the disclosure in the minutes, and records which directors voted has built the record the statute rewards. A board that approves a related-party contract on a thin record will find itself proving the contract was fair rather than making the challenger prove it was not, and the fairness of a related-party contract is exactly the question a board does not want to try. Section 617.0832 does not itself define "qualified director," and we have found no Florida decision construing the term as the rewritten section uses it. Until a court does, our practice is to treat a director with any interest in the transaction, and any director whose family member has one, as not qualified, and to have that director abstain so that the approval rests on the directors who are qualified.

Section 720.3033(2) also now establishes the same rebuttable presumption of conflict for a director, officer, or relative who contracts with the association or holds an interest in an entity that does, and requires the conflict to be disclosed at least 14 days before the board votes. Homeowners associations must also follow the ten-percent competitive bidding rule and the conflict disclosure and posting requirements added in 2024. Like Chapter 718, Chapter 720 contains no flat prohibition on contracting with a director-owned company; the procedure, and the members' right to cancel, are the safeguards.

Kickbacks and gifts

Both chapters prohibit an officer, director, or manager from soliciting, offering to accept, or accepting any thing or service of value or kickback for which consideration has not been provided, for the person's own benefit or that of immediate family, from anyone providing or proposing to provide goods or services to the association. A violation is a third-degree felony under both section 718.111(1)(a) and section 720.3033(3), and the offender is removed from office; the homeowners association statute excepts food and beverages under $25 per person at a business meeting and items received at a trade fair or education program. Holiday gift baskets, tickets, and vendor-paid dinners are where the line is most often crossed, and the safe policy is that directors, officers, and managers accept nothing from vendors beyond the items the statute expressly permits.

Other prohibited relationships

The conflict statutes are not the only limits. A condominium association may not hire an attorney who represents its management company (section 718.111(3)(f)). Directors may not be compensated for their service unless the governing documents permit. Management contracts must disclose any financial or ownership interest a director holds in the management company. And the competitive bidding statutes apply to related-party contracts as to any other, so a director's relative cannot be awarded a contract above the threshold without bids.

A conflict-of-interest policy

Statutory compliance is easier when the board has adopted a written policy that:

• requires each director and officer to complete an annual disclosure form identifying every business relationship with association vendors and every relative employed by or owning an interest in one;
• requires disclosure of any new conflict before the matter appears on an agenda;
• states the agenda, attachment, presentation, leave-the-room, recusal, two-thirds-vote, member-disclosure, and posting steps for condominiums and the 14-day disclosure, two-thirds vote, and member-disclosure steps for HOAs;
• adopts a no-gifts rule for directors, officers, committee members, and the manager;
• requires counsel's review of any proposed contract with a director-owned or director-related service provider before it is scheduled; and
• directs the secretary to attach conflict disclosures and contracts to the minutes and to post them where the website statute requires.

Contact Hamilton Mikes

Hamilton Mikes drafts conflict-of-interest policies and disclosure forms and advises boards on related-party proposals before they reach the agenda. Call 239-594-7227 or visit our Corporate Governance and Contract Management pages.