Association GovernanceConflict of Interest

Section § 6758

Explanation

This law states that, even if other laws might say otherwise, specific conflict of interest rules apply to all board transactions in associations, be they incorporated or not. These ensure that board members cannot vote on certain issues where they have a personal interest, like their own discipline, damage assessments, requests for payment plans for late fees, or decisions about foreclosure. Additionally, board members can't vote on changes or exclusive use rights to their own property within the association. However, other laws or rules that dictate how such conflicts should be handled are not overridden by this section.

(a)CA Civil Law Code § 6758(a) Notwithstanding any other law, and regardless of whether an association is incorporated or unincorporated, the provisions of Sections 7233 and 7234 of the Corporations Code shall apply to any contract or other transaction authorized, approved, or ratified by the board or a committee of the board.
(b)CA Civil Law Code § 6758(b) A director or member of a committee shall not vote on any of the following matters:
(1)CA Civil Law Code § 6758(b)(1) Discipline of the director or committee member.
(2)CA Civil Law Code § 6758(b)(2) An assessment against the director or committee member for damage to the common area or facilities.
(3)CA Civil Law Code § 6758(b)(3) A request, by the director or committee member, for a payment plan for overdue assessments.
(4)CA Civil Law Code § 6758(b)(4) A decision whether to foreclose on a lien on the separate interest of the director or committee member.
(5)CA Civil Law Code § 6758(b)(5) Review of a proposed physical change to the separate interest of the director or committee member.
(6)CA Civil Law Code § 6758(b)(6) A grant of exclusive use common area to the director or committee member.
(c)CA Civil Law Code § 6758(c) Nothing in this section limits any other provision of law or the governing documents that govern a decision in which a director may have an interest.
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