RCW 24.03A.620
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Codifies the corporate opportunity doctrine for Washington nonprofit corporations. A director or officer who learns of a business opportunity related to the corporation must offer it to the corporation first; failing that, they may face equitable relief, damages, or sanctions for usurping a corporate opportunity. The statute provides a safe-harbor procedure (using the conflict-of-interest procedures in RCW 24.03A.615) that immunizes directors who properly disclose and obtain a disclaimer.
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Statutory Text
Verified Apr 19, 2026 · LEG_WA_GOV
(1) The taking advantage, directly or indirectly, by a director or officer of a business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director or officer, in a proceeding by or in the right of the nonprofit corporation on the ground that the opportunity should have first been offered to the corporation, if before becoming legally obligated or entitled respecting the opportunity the director or officer brings it to the attention of the corporation and action by the members or the directors disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in RCW 24.03A.615 , as if the decision being made concerned a conflicting interest transaction. (2) In any proceeding seeking equitable relief or other remedies, based upon an alleged improper taking advantage of a business opportunity by a director or officer, the fact that the director or officer did not employ the procedure described in subsection (1) of this section before taking advantage of the opportunity does not support an inference that the opportunity should have been first presented to the nonprofit corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances. [ 2021 c 176 s 2704 .] Notes: Effective date — 2021 c 176: See note following RCW 24.03A.005 .
Governance
| Ref | Requirement |
|---|---|
| (1) | If an HOA director learns of a deal that the HOA itself could pursue — for example, a chance to buy adjacent common area at a favorable price, or a maintenance vendor offering an exclusive rate — the director must disclose it to the board first. Taking it personally without offering it to the HOA is a breach of fiduciary duty. |
| (1) | A director who follows the disclosure procedure correctly — full disclosure to the board, formal disclaimer of HOA interest by the disinterested directors or by member vote — is immune from later challenge. The procedure is the safe harbor. |
| (2) | If a director takes a corporate opportunity without disclosure, the HOA can sue. Available remedies include making the director hand over any profits earned, imposing a constructive trust on the underlying asset, or recovering damages — plus the personal liability exposure on top. |
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Legal references last verified May 23, 2026.
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