Let's just agree to disagree. I respect that you have your interpretation of the source material. Please respect that I have mine. (FYI...I am quite comfortable with legalese as I was a VP for a Fortune 500 company for many years who negotiated billion dollar contracts.)
This is not black and white. Differing interpretations are why the U.S. legal system has appeals processes that can reach the Supreme Court.
As a wise lawyer once told me, "The best legal defense you can get (and also the least expensive) is to be squeaky clean." i.e. run your operation above a question of a doubt so you minimize the chances of getting sued.
There are probably more than 100 (perhaps 1000+) small claims courts in the U.S. and countless other courts. All you need is 1 judge to rule this as a conflict of interest and void the contract to set a precedent.
Why would any rational HOA, (and the management company that stands to lose revenue from voided TS contracts) want to run this risk for their association?
I asked a close colleague who sits on a homeowners HOA board "Would you allow an employee of the management company to be involved in discussions and voting pertaining to fees and selection of the management company?" His immediate response: "Absolutely not. That would be a conflict of interest."
You are missing the point again.. ask that person what their answer would be if the management company directly owned 10 to 20 percent of the units in the hoa..
I am a cpa who has consulted on billion dollar deals, been responsible for auditing all kinds of businesses (including real estate ), and spent over a decade doing this.
This would not be a case that could be settled in small claims(fyi).
Private equity groups get board seats of fortune 500 companies all the time simply by buying 5 percent of a company (case in point look at staples last year ) and dictate what management should do (just ask darden).
Once you own a significant portion of an entity your influence significantly increases.
Using hgvc as an example, hilton actually has two separate subs, a management sub and an ownership sub. .. Hilton controls both, on all the boards there is a employee of the ownership sub, and that subs employee always advocates for hilton management company. Since hilton ownership company generally owns over 20 percent of its resorts, their board members always get elected. .
A lot of the law is about form not substance, if you don't believe me, read up on the recent Johnson controls aquisition of tyco and how they are trying to control ownership percentages to ensure they get the right tax treatment while at same time not planning to Change their business.
There is zero cause of action here.. yes you can sue, but your war chest better be bigger than the one dri has (and they are willing to put millions into a fight like that if they have to)..
This is America, litigation is in our blood and fairness is somewhere else..
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