Awarding Work to Firms Connected to the Manager

Awarding a condominium's work to a firm connected to the manager, for example a company in which they are a shareholder or director, or one run by relatives, is not absolutely prohibited by law, but it is a high-risk operation. It creates a conflict of interest between the role of mandatary, who must choose the best supplier for the condominium, and the personal interest in favoring one's own firm. To be legitimate, the operation must be transparent, disclosed in advance and, in the most sensitive cases, approved by the owners' meeting through an informed vote.

Why the conflict of interest arises

The manager, as a mandatary, must pursue the condominium's interest impartially. When the counterparty of the contract is a firm connected to them, the manager ends up serving two opposing interests in the same act: obtaining the best service at the best price for the condominium and, at the same time, securing revenue for their own firm. This overlap compromises impartiality and brings the operation close to the figure of a contract with oneself, governed in general terms by Articles 1394 and 1395 of the Italian Civil Code.

There is no express prohibition

The Italian Civil Code contains no specific prohibition on the manager awarding work to connected firms. The matter is derived from the principles on mandate, on the representative's conflict of interest and on transparency duties. The central point is therefore not the prohibition itself, but transparency and the absence of harm to the condominium: the operation is tolerated if the owners are placed in a position to know of the connection and to choose knowingly.

The role of prior transparency

Advance disclosure of the connection is what makes the appointment defensible. The manager must inform the meeting that the proposed firm is connected to them, place the matter on the agenda and allow a comparison among several quotes. Only then can the owners assess whether to accept that firm or prefer others. Silence, by contrast, turns a potentially lawful situation into improper and censurable conduct.

• Disclose the connection with the proposed firm in writing
• Present several comparable quotes from independent suppliers
• Bring the choice to the agenda and let the meeting decide
• Refrain from influencing the decision to one's own advantage

Approval by the owners' meeting

In cases of potential conflict, the safest route is express approval by the meeting. If the collective body, informed of the connection, still decides to award the work to the connected firm, the operation is covered by the will of the condominium and the manager is shielded from challenges on the choice itself. The decision must be adopted with the majorities proper to the expense resolved and recorded clearly, noting the information provided.

The risks where transparency is lacking

If the manager awards work to their own firm without disclosing the connection and without comparison, they face significant consequences. The resolution or contract may be annulled; the conduct may amount to a serious irregularity in management, justifying revocation of the appointment even by court order; and if harm results from the operation, for example a price above the market rate or poorly performed work, the manager may be required to compensate it. A personal benefit obtained opaquely can therefore turn into a far higher cost.

Good practice for the manager

The golden rule is to favor independent suppliers and to turn to the connected firm only where it offers genuinely competitive terms and with full transparency. Documenting the collection of quotes, the selection criteria and the information given to the meeting protects the manager and strengthens the owners' trust. Transparency is not a formal step but the tool that reconciles any personal interest with the duty of loyalty toward the principal.

Comparing quotes and keeping a record of the selection criteria is easier with management software that stores suppliers, offers and resolutions in one place. AmministraPro helps document supplier selection in a transparent and verifiable way. You can see the features at /funzioni and the plans at /prezzi.