The Question Every Board Should Ask Before Approving Another Contract | HOA Love
HOA Board Member Training
The question every board should ask before approving another contract
A vendor can have a different name, logo and invoice while still being financially connected to the person recommending it.
That distinction matters after Florida authorities alleged that a network of management companies and affiliated businesses extracted at least $5.8 million from condominium and homeowners associations.
The allegations are extraordinary. The underlying control failure is not.
Many HOA boards approve landscapers, roofers, maintenance companies, insurance vendors, collection firms and banking arrangements based primarily on recommendations from the community manager. Most recommendations are legitimate. Many affiliated services may also provide real value.
But a board cannot evaluate a recommendation honestly if it does not know who owns the company, who receives a commission or whether the person presenting the contract profits when the board signs it.
What Operation Sundown alleges
In August 2026, the Miami-Dade Sheriff’s Office announced six arrests following a two-year investigation called Operation Sundown.
Investigators allege that Juan Awais used management companies, affiliated vendors and other businesses to gain undisclosed control over association operations and finances. Authorities say elderly, primarily Spanish-speaking volunteer directors were persuaded to sign documents they did not fully understand.
The alleged network then diverted association dues, collection revenue, loan proceeds and insurance money using falsified invoices and documents. Funds intended for roofing, landscaping, security, hurricane repairs and renovations were allegedly transferred for personal benefit.
Awais and five other people have been arrested and face varying charges that include racketeering, money laundering, organized fraud, grand theft and kickback-related offenses. These are allegations, not convictions. The investigation remains active. The Miami-Dade Sheriff’s Office described the case publicly in late August, and WPLG published the detailed allegations on August 28, 2026.
The real danger is concentrated control
The alleged scheme was not simply about a questionable invoice.
According to investigators, related businesses allegedly touched multiple parts of association operations: management, maintenance, invoicing, collections, insurance money and financial records.
That concentration matters because normal checks stop working when the same economic interest appears on both sides of a transaction.
Imagine this arrangement:
01
The community manager says work is necessary.
02
A related business supplies the scope.
03
An affiliated vendor provides the bid.
04
Management confirms that the work was completed.
05
Management processes the invoice.
06
The same group controls the records the board relies upon.
The board may technically approve the payment, but its approval is based entirely on information originating from the people receiving the money.
That is not meaningful oversight. It is paperwork wearing an oversight costume.
Affiliation does not automatically mean misconduct
Boards should not assume that every management-affiliated vendor is dishonest.
A management company may create a maintenance division because it can respond faster. A related insurance agency might understand community-association coverage better than a generalist. Consolidated services can reduce coordination problems.
The issue is undisclosed financial interest.
Before approving an affiliated provider, directors should receive enough information to evaluate the arrangement independently:
1
Who legally owns the vendor?
2
Does the management company, an employee or a family member have an ownership interest?
3
Is anyone receiving a referral fee, commission, rebate, bank credit or revenue share?
4
Do the businesses share employees, addresses, equipment or insurance?
5
Was the relationship disclosed before bidding began?
6
Were competing vendors given the same scope?
7
Who independently confirms that the work was completed?
8
Can the association terminate the vendor without affecting its management agreement?
If those questions produce irritation instead of answers, that irritation is information.
Utah boards should document conflicts before voting
Many Utah associations are organized as nonprofit corporations. Depending on the association’s corporate form and governing documents, Utah’s nonprofit-corporation requirements may apply.
Utah Code §16-6a-825 addresses conflicting-interest transactions. The statute does not mean that every affiliated transaction is automatically prohibited. It does mean disclosure, qualified approval and fairness can become legally significant.
Boards should have association counsel determine which requirements apply to their organization and how conflicted directors should participate. A practical policy should be stricter and easier to administer than waiting for a dispute:
Disclose the material relationship in writing.
Record the disclosure in the minutes.
Exclude the interested person from controlling the bid process.
Obtain comparable alternatives when reasonably available.
Have disinterested directors make the decision.
Preserve the bids, contract, invoices and approval records.
A conflict disclosed after homeowners discover it is not really disclosure. It is an explanation.
Build a related-party map
Once a year—and before major contracts—the board should ask management and directors to complete a short related-party disclosure.
The form should cover:
Company ownership
Family and household relationships
Referral or commission arrangements
Shared employees or subcontractors
Insurance and banking incentives
Gifts, entertainment or discounts
Businesses used by multiple managed associations
Changes since the last disclosure
The board should then compare company names, ownership records, addresses and payment instructions. The purpose is not to conduct a criminal investigation. It is to make sure the board understands who is sitting at the table.
Separate recommendation, approval and payment
No one person or affiliated group should control the entire financial chain.
For material contracts, HOA Love recommends that boards separate four functions:
Recommendation: Someone identifies the need and proposes a scope.
Selection: Disinterested directors compare the vendors and approve the contract.
Verification: Someone other than the payee confirms that the work or milestone was completed.
Payment: The invoice is matched to the contract, approval and completion record before money moves.
Boards should also receive bank statements independently of management, review unusual transfers and retain direct access to financial records.
A portal is useful only if the board can see complete information and records cannot quietly disappear when questions begin.
Seven questions for the next board meeting
Would it be unreasonable to ask these questions before approving the next major vendor?
1
Who owns this company?
2
Who profits if we select it?
3
What relationships or commissions have been disclosed?
4
Were the competing bids based on the same scope?
5
Who will independently verify the completed work?
6
Who can initiate, approve and reconcile the payment?
7
Can the board see the original bank record without asking management?
A trustworthy management company should welcome those questions. Transparency protects honest community managers too.
The goal is not suspicion. It is visible accountability.
Volunteer directors should not need forensic-accounting experience to protect their communities.
They do need clear disclosures, readable financial reports, direct access to records and a process that prevents one person from controlling every step.
HOA Love believes boards should know where association money is held, who earns money from each relationship, who approved the expense and what the community received in return.
Would it be a bad idea to map every company currently making money from your association?
Sources
Miami-Dade Sheriff’s Office. (2026, August).
Operation Sundown: $5.8 million alleged HOA fraud scheme disrupted.Official announcement
Batchelor, A. (2026, August 28).
6 arrested in alleged $5.8 million Miami-Dade HOA fraud scheme, deputies say.
WPLG Local10.
Article
Gerstein, J. (2026, August 28).
Miami sheriff says “brazen” criminal ring scammed HOAs out of $5.8 million.
Realtor.com.
Article
