changing Management Companys

We have survived almost 1 year since my last post and things are looking up. Making contact with the owners, buying and posting signs, and numerous calls to the Sheriff and CHPI made a world of difference.

I have made contact with most of the owners of our 16 unit PUD and found that at least 11 of the 16 owners and 2 of the 3 homeowner board members of the last known board, which met 8 years ago, are in agreement that the present mc needs to go. I believe according to CA law all we need is the 2 board members and we win the vote. The hardest thing so far is having a meeting with without the mc showing up.

No one has a copy of the original contract with the mc and cannot get any information at all from the mc. We know it’s not going to be pleasant and she is going to fight all the way. The reason the board stopped meeting is because the mc ran the meetings and assigned her staff the secretary and treasurer positions. The home owners were lied to so often they gave up. One of the property owners assured me the mc company owned the property.
The mc has managed this property for 30 years, only 1 owner has received any sort of monthly accounting/statement and they have received only 3 statements in the last 8 years. None of their statement amounts came close the totals on the statement we received when we purchased our property.

My question is how we go about telling her and collecting the records. According to our by-laws her services can only be renewed yearly by the board, which they have not done. Is there an easy way to do this? We know we will need a full audit, but we need something to audit.

What I did with our lawncare person who also lived in our HOA is simply "change" our hiring process. I informed him that we were insituting a "3 bid" system. That all contractors were subject to submitting a bid every year even the incumbent. It was all in fair competition/captalism.

This may even help the person re-assess what they have to offer. Which their reaction should help judge how the turn over of records should go. You may want to ask about them and about keeping them in a centralized place instead of their office. We kept ours in the clubhouse closet.

Be nice but also give them a chance to redeem themself. If they are good at their business, then they should accept the bidding process. If not, then your decision is right and be prepared for a fight.

Tammy,

If your declaration does not require an annual audit, your BOD or owners may vote for one by a CPA. This can be expensive and is not a guarantee of detecting embezzlement. As an alternative, Davis-Sterling suggests:

"If an association's governing documents are silent regarding an audit, the Davis-Stirling Act requires a "review" of the finances for any fiscal year in which the association's gross income exceeds $75,000. Civil Code §1365(c). In a review, a CPA performs limited inquiries in accordance with GAAS (generally accepted auditing standards) established by the AICPA and gives "limited assurance" that the financial statement is materially correct. Reviewing standards are described in Statements on Standards for Accounting and Review Services (SSARS)."

By involving a third party CPA, he can be the one to make the demand for the records and your current MC is going to have some serious explaining to do if the records are not produced.

The other avenue is to obtain a court order requiring the MC to turn over all records. She has little to no defense so the proceeding should be a slam-dunk for your association.