"REBATES" to MC

I am very concerned our MC gets "rebates" from vendors.

I have to almost scream to get bids presented to the board and I am the only member that seems to be concerned about this. When I brought in a bid for tree work it was 50 percent lower than the only one presented by the MC and included stump removal which the MC's contract did not.

Believe it or not the answer to my question, when presented to the board as to why they did this was "he's always done our work".

Mary:

It is something you will never know.
Our budget was recently presented to the board by our MC with a proposal for porter service to go through our community of 170 homes to pick up loose paper and small trash every Tuesday. Cost $7200.00 per yr. This breaks down to $600.00 a month, $150.00 a week and when I told the board it would only take a person in a walker just two hours to canvass the community it would mean this person was making $75.00 an hour. The MC replied thru email that we should keep in mind they would also blow the curbs of debri, once a month. She also reminded us that all communities our size has a porter service. I vehemently questioned the need for this because our current landscaper does this exact same thing and more.
(When they cut the grass in the common areas they are also required to clean the parking areas of grass, so they simply pick up the litter at the same time)
I have discussed this with three other board members because I think it smells since the MC is pushing for this contract so hard.
I have been able to stop the contract, but there are five other board members (been on the board for at least ten years) who want to hold the matter open until next year.

While board members are not permitted to receive salaries, I have read where the back door is often used to receive kick backs which would be almost impossible to prove, unless one has an independent audit done. Who can afford that?

Jim:

You are correct, however, when you pay someone they become an employee, and any employees must be covered by workman's comp.

So, what works better is to have a Committee chaired by a board member, whose charter is to do this clean up. The chair would get adult volunteers to be on the Committee, so they're covered by the D&O insurance. If the adults choose to bring their kids to help, then the committee chairperson can sign for community service credit for the kids.

But make sure that when an adult brings a child under 18, that the parent stays with that child; even if the child is 17 years and 11 months.

Gerry - where did I say it was O.K.? I simply said for some MCs, if you don't use their vendors, you can expect to pay more for your MC contract. Harold

Harold....I think I know what you meant...Our MC had and side business of maintance service and boy did we get taken for a ride. They only charged us $7.00 a unit but did we make up for it in services...They were charging us $20.+ dollars an hour to come out plus travel time. The (new)President wanted someone besides the maaintance company to learn how to set the timers for the sprinklers so it was arranged for us to meet at the pump house. The owner of the MC, our manager and the sprinkler guy showed up. The sprinkler guy was their less then 30 minutes and everyone was gone within an hour. The bill $1030. for that day and I have yet to find out what it was for. I have ask the treasurer to check into it and get an invoice. Hasn't happened and that was back on April 20th....and we we did some research, we'd probably find out that the landscaper is accociated with them and this is the highest bill we have....I I knew what you meant.

I think that anytime an HOA pays someone to work on the common property, it should be a company that has workmans comp. Hiring an individual, whether it be a young neighbor or a local college or high school kid to work on the property for pay can lead to dire consequences.

Check with your insurance company to find out if they will cover you if one of the high school kids that you hire gets hit by a car while performing work for the HOA, or falls off a ladder and breaks his back. Regardless of what the law says, the kid is going to sue the HOA to cover his injuries.

You'll probably find that the insurance company will say no, they will not cover anyone that you hire who does not have workmans comp.

Our board will never hire anyone to work on our project unless they are a company that has workmans comp. There are some great Mexican gardners who have small landscape companies that do a much better and cheaper job than the landscape company we use, but we cannot use them because they don't have workman's comp.

Volunteer work by community members is different. While the insurance companies don't like to have volunteers do physical work, most will still cover them as long as it's a committee of volunteers doing the work. But always check with your insurance company first.

I work in an Association Management Company in North Carolina. When we get bids from contractors we will get bids from companies that have done work for our communities in the past as well as any others that the Board would like us to receive them from. We then present all of the bids to the Board for their review. Our Boards also meet with a select number that they decide to meet with to have a one on one interview with the contractor. While we are included in the meeting with the contractors that have placed bids we do not have a say in which company receives the contract it is strictly up to the Board and we do not try to get them to lean towards any particular company.

We also do not charge to get any bids for the Associations we manage. We will get as many as the Board wants whether it is 3 or some have gone up to 10 depending on what the bid was for.