—Becoming a Buyer
“In such situations the property manager should disclose his or her conflict of interest. In my experience a property manager that is also a unit owner can be beneficial to the community because the property manager has a vested interest in making sure the community is—to the extent possible – run correctly, maintained and financially secure. Furthermore, it is almost certain that if the property manager does not do his or her job the unit owners will make him or her aware of their displeasure. Whether or not a conflict of interest exists the association is powerless with regard to who can own a unit. Federal law protects housing and most restrictions will be limited to age restricted housing. Thus unless the community is an age restricted community and the property manager does not qualify the association will not be able to restrict his/her purchase of a unit. Notwithstanding, the association is not without redress.
“If the board is not comfortable with a property manager that is also a unit owner the executive board may choose not to renew the property manager’s contract when it expires. Future management contracts may contain language that states the contract will expire automatically if the property manager purchases or becomes an owner of a unit within the community. Such a clause would probably be found valid because it does not restrict who can own a unit. Instead it restricts a unit owner from being the property manager.”