Florida Statute 718.3027: Condominium Director and Officer Conflicts of Interest

Quick Answer

Section 718.3027 of the Florida Statutes requires condominium directors and officers, and their relatives, to disclose activities that may reasonably be a conflict of interest, and sets a voting procedure when a director, officer or relative proposes to contract with the association. Approval takes "an affirmative vote of two-thirds of all other directors present," the interested person leaves the room, and owners can later cancel the deal.

The most important point: a contract that was not properly disclosed "is voidable and terminates upon the filing of a written notice terminating the contract with the board of directors which contains the consent of at least 20 percent of the voting interests."

At a Glance

What the Law Says

Disclosure and the rebuttable presumption, subsection (1)

Directors and officers, "and the relatives of such directors and officers," must disclose to the board "any activity that may reasonably be construed to be a conflict of interest." A rebuttable presumption of a conflict exists if either of the following occurs without prior notice:

• a director, officer or relative enters into a contract for goods or services with the association; or
• a director, officer or relative holds an interest in a business entity that conducts business with the association or proposes to enter into a contract or transaction with it.

Agenda, vote and member cancellation, subsection (2)

The proposed activity must be listed on the meeting agenda, and "all contracts and transactional documents related to the proposed activity must be attached." The association must comply with s. 617.0832, and its disclosures go into the written minutes. Approval requires "an affirmative vote of two-thirds of all other directors present." At the next regular or special members' meeting the contract must be disclosed to the members; "upon motion of any member" it is brought to a vote and "may be canceled by a majority vote of the members present." If canceled, the association owes only the reasonable value of goods and services provided up to cancellation, with no termination fee, liquidated damages or other penalty.

If the board says no, subsection (3)

If the board votes against the proposed activity, the person must notify the board in writing of an intention "not to pursue the proposed activity or to withdraw from office." If the board finds a violation of subsection (3), the officer or director "shall be deemed removed from office," and the vacancy is filled according to general law.

Presentation and recusal, subsection (4)

The interested director, officer or relative may attend and make a presentation. After that, the director or officer "and any relative" must leave during discussion and vote, and the director or officer "must recuse himself or herself from the vote." The interested director's attendance counts toward a quorum for the meeting and the vote in his or her absence.

Voidable contracts, subsection (5), and relatives, subsection (6)

A contract with a director, officer or relative that has not been properly disclosed as required by 718.3027 or 617.0832 "is voidable and terminates" on written notice to the board containing the consent of at least 20 percent of the voting interests. "Relative" means a relative "within the third degree of consanguinity by blood or marriage."

The corporate-law layer: 617.0832

Section 617.0832 provides that a director's conflict of interest transaction that is "fair to the corporation" when authorized is not void or voidable, and shifts the burden of proving unfairness to the challenger if the material facts were disclosed and a majority of qualified directors (or disinterested members) approved it. "Fair to the corporation" means the transaction as a whole is beneficial to the corporation and its members, considering whether it is fair in the director's dealings and "comparable to what might have been obtainable in an arm's length transaction." A single director alone cannot authorize the transaction under the director-approval route.

What This Means in Practice

For boards

Our reading: subsection (2) of 718.3027 and 617.0832 operate together, so a board approving a related-party contract should satisfy both the condominium-specific two-thirds vote and the corporate-law disclosure and fairness record. We recommend documenting comparable bids in the minutes, though the statute does not require bids by name.

For owners

Owners can use the member-motion route at the next members' meeting, or, for an undisclosed contract, gather consent from 20 percent of voting interests.

Manager conflicts

Section 718.3027 addresses directors, officers and their relatives. It does not mention community association managers. Any manager conflict rules sit outside this section (see Chapter 468) and we did not review them for this page.

What the statute does not say

• It sets no dollar threshold; "any activity that may reasonably be construed" is the test.
• It does not state how many days before the vote disclosure must be made. The 14-day disclosure language appears in HOA section 720.3033(6)(b), but not in 718.3027 as we read it.
• Open question: how a board should treat a conflict that surfaces after a contract is signed. The statute makes it voidable but does not set a cure process.

Timeline

Related Florida Law

• Chapter 718, Condominium Act
• Fla. Stat. § 617.0830, director duties and liability
• Fla. Stat. § 720.3033, HOA directors
• HB 1021 (2024)
• HB 797 (2026)
• Chapter 468, community association managers
• Munder v. Circle One (1992)

Board Checklist

• Collect written conflict disclosures from every director and officer, including relatives and business interests.
• List any proposed related-party activity on the agenda and attach all contracts.
• Let the interested person present, then confirm they leave the room and recuse.
• Record the 617.0832 disclosures in the minutes.
• Obtain a two-thirds vote of all other directors present.
• Disclose the contract at the next members' meeting and be ready for a member motion to cancel.
• Keep comparable-pricing documentation for fairness.
• Calendar a review of existing related-party contracts for proper disclosure.

Frequently Asked Questions

Can a condo director's company do business with the association?

The statute does not ban it, but it requires disclosure, agenda listing, recusal and approval by two-thirds of all other directors present.

Who counts as a relative?

A relative within the third degree of consanguinity by blood or marriage.

Can the conflicted director vote?

No. The director "must recuse himself or herself from the vote" and leave during discussion and the vote.

What if the contract was never disclosed?

It is voidable and terminates on written notice to the board containing the consent of at least 20 percent of the voting interests.

Can members cancel an approved conflict contract?

Yes. On any member's motion at the next regular or special members' meeting, a majority of members present may cancel it, with the association liable only for the reasonable value of goods and services delivered.

Does this apply to timeshare condominiums?

No. The section applies to associations "that is not a timeshare condominium association."

Does this cover community association managers?

This section addresses directors, officers and relatives and does not mention managers. Any manager conflict rules are outside this section, and we did not review them here.

Where This Comes From

We read the full current text and History line of Fla. Stat. § 718.3027 and § 617.0832, and § 720.3033 for comparison, on the Florida Legislature's Online Sunshine site. The official text is at leg.state.fl.us.

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Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed Florida attorney before acting.