How to Handle a Bid From a Board Member's Company (2024)

TL;DR: A board member's own company can legally bid on association work in most states, but the member must disclose the conflict in writing, recuse themselves from discussion and voting, and the board should still collect at least two other competitive bids before deciding. Skipping any of these three steps is what turns a normal vendor decision into a lawsuit or a state complaint.

_Last reviewed: July 2026 · 7 min read_

Your board just got a bid for the roof job, and one line item makes the room go quiet: the bidder is a director's brother-in-law's roofing company. Nobody wants to say it out loud, but everyone is thinking the same thing. Here's how to handle it without blowing up the board or the vote.

Okoniq Property Hub keeps a written log of every bid, disclosure, and vote so a board member's conflict of interest is documented the day it happens, not reconstructed from memory two years later.

Can a board member's company legally bid on association work?

Yes, in most states a board member's own company can bid, but the bid only holds up if the conflict is disclosed and the member steps out of the decision. Roughly 30 states have some form of nonprofit or common-interest-community statute addressing "interested director transactions," and most follow a similar pattern: disclosure, recusal, and a fair-price standard.

Corporations Code section 7233 in California, for example, requires the interested director to disclose the material facts of the transaction, and the remaining disinterested directors must approve it after knowing the terms are fair to the association. Florida's condo statute (718.3027) goes further and requires competitive bids for any contract over $500 per unit per year involving a board member's relative or business.

The bid itself isn't the problem. A board member who owns a roofing company might genuinely offer the best price in town. The problem is a board voting to approve it without anyone else in the room knowing about the relationship.

What should the board member do before the vote?

The board member should disclose the relationship in writing, put it in the minutes, and leave the room before discussion or vote. A verbal "just so you know" mentioned in passing doesn't count as disclosure in most states' record-keeping standards. It needs to be a dated, written statement attached to the meeting minutes: the nature of the relationship, the dollar amount of the bid, and confirmation the member will not participate in the discussion or vote.

Recusal means actually leaving, not staying to "answer questions." Boards that let the conflicted member stick around for the Q&A portion still get challenged later, because owners reasonably assume influence happened off the record. If your association is deciding between vendors for something like siding maintenance or a roof job, the recusal needs to cover every meeting where that vendor's name comes up, not just the final vote.

How many competing bids does the board actually need?

Most governing documents and best-practice guidance call for at least two other bids alongside the board member's, and three total is safer for anything over $5,000. This isn't usually a hard legal minimum unless your state statute sets one (Florida's threshold is $500 per unit annually for related-party contracts), but it's the standard an attorney or judge will look for if an owner challenges the decision later.

| Approach | Single bid from board member | 3 competitive bids collected | |---|---|---| | Legal exposure | High — looks self-dealing even if price is fair | Low — documented fair-market comparison | | Owner trust | Erodes quickly once discovered | Preserved, decision looks defensible | | Price leverage | None, no comparison point | Board can negotiate against actual market rate | | Time to close | Faster | Adds 1-3 weeks typically |

For big-ticket items like foundation cracks or major concrete work, three bids also protects the board financially. A board member's company might be fairly priced, but without comparison bids nobody can prove it, and "we trusted him" isn't a defense that holds up at a hearing.

What happens if the board skips disclosure and gets challenged?

If disclosure and recusal are skipped, the contract can be voided, the board can face a breach-of-fiduciary-duty claim, and individual directors can lose the protection of their D&O insurance. Most director and officer insurance policies exclude coverage for known, undisclosed conflicts of interest, which means the directors who approved the deal could be personally on the hook for legal fees if an owner sues.

This is also the fastest way to lose an election. Boards that get caught steering contracts to insiders, even unintentionally, tend to see a wave of recall petitions at the next annual meeting. Documenting the disclosure, the recusal, and the competing bids up front (even for smaller jobs like gutter maintenance or a chimney flashing repair) is cheap insurance against that outcome.

What should the meeting minutes actually say?

The minutes should record the disclosure verbatim, the names of directors who voted, and the specific bids compared, not just "vendor approved." Vague minutes like "Board approved roofing contract" leave no trail if the decision is questioned two years later during a special assessment fight or a board turnover.

Include the dollar amounts of every bid considered, the date disclosure was made, and a note confirming the conflicted member left the room. If your association uses a management company, ask them to keep a standing template for interested-party disclosures so it's not improvised each time a bid like this comes up, whether it's for roof problems or something smaller.

FAQ

Does a board member have to disclose a conflict even if their bid isn't chosen?

Yes. Disclosure obligations attach to the relationship and the bid submission, not the outcome. If a board member's company submits a bid and loses, the disclosure still needs to be in the minutes to show the process was clean.

Can the board member vote if they abstain from discussing price?

No. Abstaining from discussion isn't the same as recusal. Most statutes and governing documents require the interested member to leave the room entirely during both discussion and the vote itself.

What if the board member's company genuinely has the lowest bid?

The board can still choose them, but only after full disclosure, recusal, and comparison against at least two other bids showing the price is fair. Price alone doesn't excuse skipping the process; it just makes the eventual decision easier to defend.

Who enforces conflict-of-interest rules if the board doesn't follow them?

Enforcement usually comes from owners themselves, either through a lawsuit, a complaint to the state's real estate or common-interest-community regulator, or a recall vote at the next election. A handful of states, like Florida's Division of Condominiums, also accept direct owner complaints against boards.

Should the association put a conflict-of-interest policy in writing before this happens?

Yes, and most attorneys recommend it as a standing bylaw amendment rather than handling it case by case. A written policy sets the dollar threshold for competitive bidding, the disclosure format, and the recusal procedure before anyone is under pressure to bend the rules for a friend or relative.

This is educational information, not legal advice. Consult your association's attorney and your state's common-interest-community statutes before approving any contract involving a board member or their relatives.