Avoiding the Appearance of Favoritism
I'm on the board of a homeowner association for a condominium complex. So is Mr. X. The association has a policy which holds individual homeowners responsible for certain plumbing repairs. On several occasions, homeowners have asked the association to pay for such repairs, but we have always refused these requests and stood by our policy, forcing the homeowners to pay.
A few years ago, one homeowner in this situation (Ms. Y) argued that our policy is invalid because of rules in our governing documents. I read the governing documents and concluded that Ms. Y's argument had merit. I proposed to the board that we get a legal opinion. My motion did not get a second. All four other board members, including Mr. X, acted to enforce the policy.
This year, Mr. X had his own plumbing problem and, by the terms of our policy, is responsible for the repairs. Like so many homeowners before, he has asked the association to pay for the repairs. As Ms. Y did a few years ago, he is arguing that our policy is invalid because of rules in the governing documents.
Mr. X is probably right -- the policy is probably invalid for the reasons he claims. However, the other board members and I are reluctant to overturn the policy at his request because of the appearance of favoritism it shows, especially given the earlier cases, notably Ms. Y's, in which we refused to question the policy. I should note that Mr. X claims that his argument is qualitatively different from Ms. Y's and all others; nevertheless, the differences are esoteric and not obviously relevant.
To complicate matters, I was able to get a legal opinion this time, and the legal opinion upholds the policy. No one places much stock in the opinion because the legal analysis is shoddy. (I'm trying to fire our lawyer, but that's another story.) Nevertheless, it means that reversing the policy will require us to act against our lawyer's advice.
The board has offered to go to arbitration with Mr. X. He has refused. He intends to force a decision on the policy. He will recuse himself, of course, but that leaves the rest of us with a decision to make.
To sum up, I must choose whether to uphold or reverse a policy I think is probably wrong. Reversing the policy will give a strong appearance of favoritism because it will benefit another board member, and because this request has been given more consideration than requests from non-board members in similar situations. Reversing the policy will also require me to ignore our lawyer's opinion.
Can anyone add some insight that will help me with this decision?
One ethical question relevant to this decision is whether Mr. X should be held to a different standard because he is a board member. In other words, is it fair to require Mr. X to provide an extraordinarily compelling argument just so we can avoid the appearance of favoritism?
-TC
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Shoddy Plumbing
The question you posed as the one ethical question you are concerned about--whether the board member, Mr. X, should be held to a higher standard...took me by surprise. I expected another ethical question, one which focuses on the perception among the other homeowners, Ms. Y for example, that a decision to pay for the board members' fees would be wrong...one which would be based on favoring one of your own fellow board members. Especially when others' requests for plumbing repair payments had been turned down, using the policy as a rationale.
Are you and other members of the board to be held to a higher standard with respect to your requests? No, not really. Just because you are a board member doesn't mean that you can't ask for the association to pay for repairs and present your arguments.
I think your recommendation to get a legal opinion on the policy was a good one. But the other story about the attorney, the one you do not tell, is perhaps worth airing. From what you say, it simply appears that you, and perhaps others on the board, have decided the policy is wrong, so that when the attorney disagreed, you were disappointed. I hope you are not planning as a board to engage in a kind of "attorney arbitrage"...which here simply means finding an attorney who will write opinion which argues for changing the plumbing repairs policy.
Further, why is Mr. X's argument for getting his repairs paid a qualitatively better one than the previous request and reasons for plumbing relief presented by Ms. Y?
Given what you have shared, I would vote against Mr. X's request for the reason that it WOULD appear to look like favoritism by board members for one of their own. The insider and outsider ramifications of this situation loom large for me in this story.
At the same time, if you and others, including the homeowners who belong to the association, feel the current policy is wrong, aren't you in a position to change the policy? You don't need a legal opinion to initiate this process. I would think that your association has in its by-laws procedures for changing policies. Why not convene a working group for consideration of changes to the plumbing repair policy? This approach might be both more democratic and transparent, giving the other homeowners few reasons to claim that your intent is to favor other board members.
Finally, it seems to me that your homes were built with shoddy plumbing to begin with. I would recommend that you look into the competence and record of the plumbers who were contracted in the first place!
Please feel free to let us know how it all worked out. This is a very common issue, one which should be taken seriously. Thanks for bringing it up in this forum.