Problems with management company

Hi everyone,

I am the president of our board. We have a ~300 unit project in the Bay Area in northern California. My reason for posting today is to determine if my expectations of our management company (MC) are unreasonable. If they are not, then I may need suggestions for finding a replacement. If they are unreasonable, then I suppose all MCs are all equally inept

It would be easiest to illustrate my frustrations with an example. During our last Executive Session, we held a violation enforcement hearing (VEH). We had 15 members who were summoned. The VEH part of the Exec packet began with a summary page of all 15 members. They were listed in descending order by their street address (not by lot/space number). The next ten pages are a printout of the history of each unit - along with a summary of all correspondence with each owner. The next six pages are "Responses to Hearing" forms that owners can submit. These usually have e-mail threads and pictures attached. These are in no particular order. If, at our meetings, I want to know how to handle one owner, I have to flip from the summary page to the history, then to the Responses to get all that information.

As a side note, to save costs and go green, we do not distribute hard-copy packets. Everyone brings a laptop or iPad and reviews a PDF version of the packet.

Here are the problems:

1) The summary page numbers the members by street address. We have ~40 buildings that were numbered in a logical manner, but that are not synonymous with postal address. Buildings 4 and 33 share the same street address, which put them at the top of the VEH list, even though they are completely different building designs and are on opposing ends of the project. One has elevated balconies, the other has ground-level decks. One is townhouse style, the other is a stacked condo. One has tandem garage, the other is side-to-side. Is it reasonable to ask the MC to sort these by building number, or their HOA account number which uses the space number? If the MC pushes back because they use some archaic restrictive CRM software, is that an industry norm I must accept, or can other MCs offer a package that can be tailored to the unique needs of our project?

2) The owners are not given a specific time to appear. We hold our meetings in a small clubhouse. When everyone shows up at once, we can't figure out who to see first, so we have to tell the majority to stand outside - which is fine if the weather is nice. Rain season has started. Asking my neighbors to stand in the cold rain while we deal with another neighbor does not go over well - especially when that one neighbor is being difficult.

In the management company's defense, they don't know who will show up until a few days before the meeting, and so they don't have time to assign time slots to everyone... but I don't buy this. They should prioritize the hearings by building, then by who will show up, and give them a set 10-minute window to appear. Otherwise people just show up whenever they want to. We could be in the middle of a 3rd party contract discussion when someone decides to show up... so everyone stops what they're doing and switches to the VEH to accommodate this one person.

3) The VEH is structured at the end of Exec Session. I want it at the beginning as it's the most time-consuming. We hold our Open session immediately after Exec session. If we don't allocate adequate time for the enforcement hearings, then everyone who wants to attend the Open session has to stand out in the rain (see #2). On top of that, as more people show up, we don't know who is here for Exec Session and who is here for Open. It's a logistical nightmare that makes us look incompetent, and I'm fed up with this.

Now, the same type of problems exist with the Delinquency Report. If I want to get the progress on a single owner, I have to flip through 4 different sections of the DQ report. One is a summary page. The next is history of that unit. Third is the collections summary, and fourth is the collections history. It's a mess and takes forever to process!

Is my situation common with the rest of your experiences with MCs, or do your meetings run a lot smoother and efficiently?

THANKS!!

I agree.

If possible, consider have a Violations Hearings meeting separate from normal business meetings. With both the same night, it could make for a long night.

As Tim said: You can delegate tasks and duties but not the responsibility of the Office and Chair you agreed to fulfill.

I'll let you in on a dirty little secret Management Companies are in it to make money and the more you demand of their time, the more you can expect to pay. Your PM (unless they are on site during the week) probably has a half dozen or more properties that they are responsible for and the more you demand cuts into the time they have for others. You need to read the contract between the MC and the HOA and see if they are indeed falling down on the job or if they are fulfilling the agreement.

OR, unless the contract specifies otherwise, specify a cut off date for everything that allows the time.

And yes, in my opinion, you should scrutinize every single agenda. Even when you believe that the MC/PM is doing everything you ask of them, you should verify that they are. It's part of the job.

Carol,

All of our units are condos. Some are townhouse style, where the units have common walls and exclusive use patios at ground level. The others are condominium style, which are semi-stacked. These units have balconies that are 2-3 stories high.

The PM is not on the premises full time. I think she might have 4 or 5 other accounts. I do not know the size of those accounts. We have ~300 units. Some might be as small as 20-30 homes, or they could be larger.

Hiring someone to work full time could be quite costly. Between the PM total compensation (salary/benefits) and MC overhead, I'm thinking 7-8k a month... maybe more. That's double what we pay now.

I do understand that.
I also understand that nobody wants to spend 20 hrs a week in a volunteer position verifying work you are paying somebody to do.

My suggestion is indeed do as you thought of and set deadlines for things to be done. If the PM is unable to meet those deadlines, then it's time to shop for a new MC or request that the PM be changed.

PA

In my first executive level management position I soon realized "things" were not being done the way I wanted them done. When I discussed this with my boss (we were both new to the company and he brought me in), he said they have a corporate culture here and we have to change this. He said be polite and professional but when push comes to shove, they must do it your way as I will hold you responsible.

My suggestion is discuss with your BOD how you want things done. If you all are in agreement, then talk to he PM. Bottom line is my way or the highway.

After all, you are responsible.

Great idea John. It'll be a tiny bit tricky. California law bars a majority of board members from collaborating in a "meeting" outside of an open meeting that is properly noticed to the membership. We cannot even discuss matters through e-mail.

The only way this could work is if I meet with two Board members separately on a 1:1 basis.

Do you have a fine schedule for violations? What's the sequence for levying fines? Do you follow through on collecting them?

Here with a couple of exceptions, owners aren't called to hearing until the second violation. So, a "courtesy letter" goes to an owner stating the bicycle must be removed from the balcony within XX days per rule xxx or CC&Rxxx.

If the violation isn't cured, we call the owner to a hearing where s/he can be fined $50 for the violation and is reminded, per our fine schedule, that fines can be doubled for every repeat violation of the same type.

I'm bringing up our system, which isn't unusual, because we too have at least one balcony for every unit and don't permit storage of anything on them. They only may contain patio furniture, heat lamps/towers, propane grills and plants (no limit). As with your HOA no one may penetrate the balcony walls, railings, ceilings, etc.

We're 37% renter occupied, but I think that our fining schedule, which we rigidly enforce, keeps violations to a minimum. Most common here is noisy parties after 10PM. From my condo, I see many of our balconies on our other tower, and the balconies of two other high rises in our urban neighborhood. They look just fine with no "junk" stored on the balconies.

Oh, Yes! Do hold meetings at least once a month. And as others have also suggested have a special meeting of the board to decide how you all want your meeting agendas to be organized, et., etc. You don't need to invite the PM given the limited number of meetings she attends per month, but her presence might be helpful to everyone. If directors are available, hold the meeting during the day and, of course, provide 4-day posted notice of the agenda.

Would your board be able to hold several hearing without the PM to get these violations cleaned up? You preside, I assume, and the secretary or any other director can keep the meeting notes, which aren't difficult if kept properly.

PA, what does your HOA provide? Security services? Custodial? Landscapers? Pest control? Who supervises them? What amenities besides the clubhouse?

I lived one year as a renter in a very nice 5-story condo building in San Jose across the street from the joint SJSU/city library. The HOA was one square block with only a clubhouse, gym, pool & jacuzzi. There was a roving security officer, custodians, and one engineer. The PM was on the premises 3 afternoons a week, 12 hours per week. Everything seemed fine. So you may not need a full time onsite PM. But if your current PM commutes 30 miles to your HOA, that doesn't sound good at all.

In addition, your dues sound quite low at $250, but that depends on your amenities, what you're setting aside in reserves, etc.

Are you familiar with davis-stirling.com? You can get good ideas there for agendas and for interpretations of our complex codes here in CA.

Good idea John. We may need to have an Executive Session in December anyways for other reasons.

Question: Could we have this Operating Procedures discussion also in ES, or would we have to schedule an Open Meeting? Civil Code §1363.05(b) allows us to discuss "Personnel matters" which include performance reviews. In a way, you could say we're informally reviewing the PM's performance.

DITTO

Thanks for the update PA.

Hopefully your Board is now on the right track to make the meetings easier for everyone.