Property Management
A Colorado HOA board member who votes to approve a contract with a vendor in which the board member has a financial interest, without disclosing this conflict, may:
AA. Act without any concern, as board members are volunteers
BB. Violate CCIOA's conflict of interest provisions and expose themselves and the HOA to legal liability✓ Correct
CC. Only be liable if the contract was over $10,000
DD. Act without restriction since CCIOA does not address conflicts of interest
Explanation
Colorado's Common Interest Ownership Act (CCIOA) requires HOA board members to disclose conflicts of interest and abstain from voting on matters in which they have a financial interest. Failure to disclose and recuse can expose the board member and the HOA to liability for breach of fiduciary duty.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
State-Specific Concepts
DRE Regulation
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