Indiana Conflict of Interest Program

Hi Randell,

Kindly review the governing documents to verify the conditions and terms regarding conflicts of interest.

If the HOA is incorporated as a nonprofit, it must follow the Indiana Nonprofit Corporation Act of 1991 Section 23-17-13-2.5, which states that contracts with a conflict of interest may not be immediately void because of the relationship or interest solely because of the board member’s vote or presence/participation at the contract consideration meeting.

Transactions or contracts are not void or voidable if:

• The material facts as to the contract or relationship are disclosed to the board and it was authorized by a majority vote of disinterested board members in good faith, even if the disinterested directors are less than a quorum; or
• The material facts as to the contract or relationship are disclosed to the board and it was specifically approved in good faith by a vote of entitled voting members; or
• The contract or transaction is fair as to the corporation at the time of approval by the board or members

The section also states that common or interested directors may be counted in determining the presence of a quorum at a meeting of the board that authorizes a contract or transaction.