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HouseKeys Conflict of Interest and Gift Policy

Overview

Purpose: HouseKeys is committed to upholding the highest ethical standards in its administration of affordable housing programs and contracts with local government agencies and homebuilders. This policy provides clear guidance to employees, applicants, contractors, vendors, government employees, and other stakeholders to prevent conflicts of interest and maintain transparency, impartiality, and fairness in all operations.
Scope: This policy applies to:
  • All HouseKeys employees, officers, and directors.
  • Program applicants, customers, and participants.
  • Family members or associates of HouseKeys employees.
  • Third-party contractors and vendors, including but not limited to Loan Officers, Real Estate Agents, Housing Counselors, Interpreters, and others who work with or on behalf of HouseKeys.
  • Stakeholders, including government agencies and investors.
  • Government employees working for incorporated cities, counties, and other agencies that contract with HouseKeys.

Chief Compliance Officer (CCO): The CCO is responsible for overseeing compliance with this policy. In the event that a CCO has not been appointed or the position is vacant, the CEO will serve as Interim Chief Compliance Officer until the role is filled.

1. Conflicts Related to Employee Participation in Programs and Drawings

Policy: HouseKeys employees are prohibited from applying for any programs administered by the company or entering any program-related drawings or lotteries. This ensures that employees do not unfairly benefit from the programs meant for the public or external participants.
Disclosure and Enforcement: Employees who violate this policy may face disciplinary action, including termination.

2. Conflicts Related to Family Members or Associates of Employees

Policy: If an employee has a family member, close associate, or related party who applies for a program, that employee is prohibited from having final underwriting or decision-making authority over the application or any related actions.
Disclosure Requirement: Employees must disclose any relationships with program applicants to their supervisor or the CCO. If the CCO position is vacant, disclosure must be made to the CEO acting as Interim CCO. A neutral party will be assigned to handle the file to ensure impartial decision-making.

3. Conflicts Involving Third-Party Contractors and Vendors

Policy: Third-party contractors and vendors working with HouseKeys, including but not limited to Loan Officers, Real Estate Agents, Housing Counselors, Interpreters, and others, are prohibited from engaging in activities that could create conflicts of interest. This includes:
  • Vendors applying for programs: Contractors and vendors working with HouseKeys may not apply for programs or enter drawings related to the company’s administered services.
  • Impartiality in decision-making: Vendors who work on behalf of HouseKeys must maintain impartiality when assisting program participants and are prohibited from influencing decisions that benefit themselves or their associates.
Disclosure Requirement: Vendors must disclose any potential conflicts, including personal relationships with program applicants or customers, to HouseKeys.
Enforcement: Contractors and vendors who violate this policy may have their contracts terminated and may be barred from working with HouseKeys in the future.

4. Conflicts Involving Government Employees

Policy: Government employees working for incorporated cities, counties, and other agencies that contract with HouseKeys must adhere to all applicable laws and regulations to avoid conflicts of interest, including the California Political Reform Act, Government Code Section 1090, and the Brown Act.
  • Investment in HouseKeys:
    • Disclosure: Government employees who have a financial interest in HouseKeys, including investments through crowdfunding campaigns or other means, must disclose such interests to their agency's legal counsel and comply with all reporting requirements, such as filing a Statement of Economic Interests (Form 700) if required.
    • Recusal from Decisions: These employees are prohibited from participating in any governmental decisions, contracts, or actions that could materially affect HouseKeys or their financial interests in the company.
    • Compliance: Failure to disclose such investments or to recuse themselves from relevant decisions may result in violations of state laws, leading to penalties, including fines, voiding of contracts, and potential criminal charges.
  • Contracting and Decision-Making:
    • Government employees with a financial interest in HouseKeys must not participate in the making, influencing, or execution of contracts between their agency and HouseKeys.
    • They must recuse themselves from discussions, negotiations, and votes related to contracts or programs involving HouseKeys.
Enforcement:
  • Government Employees:
    • Non-compliance may result in disciplinary action by their employing agency and legal penalties under California law.
    • HouseKeys reserves the right to refuse investments from government employees if accepting such investments would result in a conflict of interest or violation of applicable laws.
    HouseKeys Obligations:
    • HouseKeys will inform government agency partners of this policy and encourage compliance with all applicable laws.
    • HouseKeys will not knowingly engage in activities that could cause government employees to violate conflict of interest laws.

5. Investment Conflicts Related to Crowdfunding Campaigns

Policy: HouseKeys employees, applicants, third-party contractors, vendors, and government employees may participate in crowdfunding campaigns (e.g., StartEngine) for the company, provided that:
  • Employees:
    • Investments are entirely voluntary and will not affect employment status or career progression.
    • Employees must invest based on their independent judgment and are prohibited from exerting undue influence on others to invest.
  • Applicants and Customers:
    • Investments do not entitle them to preferential treatment in any HouseKeys programs or services.
  • Contractors and Vendors:
    • Must not expect any special treatment in contracts, projects, or program administration.
  • Government Employees:
    • Advisory: Government employees working for agencies that contract with HouseKeys are advised to refrain from investing in HouseKeys to avoid conflicts under California law.
    • Compliance: If they choose to invest, they must comply with disclosure and recusal requirements as outlined in Section 4.
    • Disclosure: Any investor must acknowledge that their investment is not intended to influence their standing with the company or any programs offered.

6. Insider Information Prohibition

Policy: Employees, contractors, vendors, officers, government employees, and others with access to non-public, material information about HouseKeys are prohibited from using that information to gain an unfair advantage in any investment, business decision, or program participation.
Enforcement: Violations will result in disciplinary action, including termination for employees or termination of contracts for vendors, and may result in legal consequences as per applicable laws.

7. Restrictions on Gift-Giving

Policy:
  • Gifts from Applicants, Contractors, or Vendors:
    • HouseKeys employees are prohibited from accepting gifts intended to influence any decision related to an applicant’s file, contract, or program participation.
    • Exception: "Thank You" gifts of nominal value (under $50), given after decisions have been made and without intent to influence future actions, may be accepted at the discretion of the employee’s manager. These must be disclosed to the CCO (or the CEO acting as Interim CCO).
  • Violation: Attempts to influence decisions through gift-giving will result in disqualification from the program, service, or contract.
  • Gifts to Government Employees:
    • HouseKeys employees are strictly prohibited from providing gifts, meals, or other forms of hospitality to government employees of agencies with whom HouseKeys contracts, to comply with legal and ethical standards and prevent any appearance of impropriety.
  • Gifts from Government Employees:
    • HouseKeys employees must not accept gifts from government employees that could influence or appear to influence any business decisions or contractual relationships.

8. Governance and Voting Rights in Crowdfunding

Policy: Employees, customers, contractors, vendors, government employees, or stakeholders who acquire voting rights through investments in HouseKeys’ crowdfunding campaigns are required to recuse themselves from voting on decisions directly related to:
  • Any programs or services they benefit from.
  • Situations where they are in a position to influence program administration.
Non-Voting Shares: HouseKeys reserves the right to issue non-voting shares in its crowdfunding rounds to prevent governance conflicts.

9. Disclosure and Reporting Requirements

For Government Employees:
  • Compliance: Must disclose any conflicts of interest as required by their agency and applicable laws.
  • Certification: HouseKeys may require certification that their investment or involvement does not violate any laws or regulations.
For Employees, Contractors, and Vendors:
  • Must disclose any conflicts, such as family relationships with applicants, business relationships, or investments in HouseKeys, to the CCO or the CEO acting as Interim CCO.
For Applicants:
  • All program applicants will acknowledge and agree to this policy by checking a box during the application process, ensuring they understand and accept the terms regarding gift-giving, conflict of interest, and impartiality.

10. Enforcement and Non-Compliance

Government Employees:
  • Legal Consequences: Non-compliance may result in penalties under the Political Reform Act, Government Code Section 1090, and the Brown Act.
  • Termination of Contracts: HouseKeys may terminate relationships or contracts with government agencies if non-compliance is detected.
Employees:
  • Failure to comply may result in disciplinary action, up to and including termination.
Applicants, Contractors, and Vendors:
  • Violation of this policy, including attempts to influence decisions through gifts or other actions, may result in disqualification from programs or termination of contracts with HouseKeys.

11. Policy Review and Updates

This policy will be reviewed annually to ensure compliance with current laws and regulations. Necessary updates will be made to address emerging conflicts or changes in operations.
Note: Government employees are strongly encouraged to consult with their agency's legal counsel or the Fair Political Practices Commission (FPPC) to ensure compliance with all applicable conflict of interest laws and regulations before engaging in any activities that could present a conflict of interest.