Response for info from management company

This is a condo but I assume it would apply to all management companies.

We have a good property manager and management company except (I feel) in one respect. I am president of the Association and when an owner has been fined for not following our Declaration or Bylaws or is delinquent in payment of their monthly fees, I like, on occasion, to be updated on what action is being taken and/or the result of actions taken and/or what they need from the board to proceed.

The problem is that the PM often ignores my requests. Am I over stepping my position (micro-managing) as board president and asking for something that I should let the management company handle ?

It isn't that I ask every month because I realize these things can take time, but on the other hand I feel the board is ultimately responsible for the Association and delinquencies and violations of our Declaration and Bylaws (not referring to general rules and regulations here)can badly affect the Association and it's owners.

Thank you in advance for your thoughts and input on this issue.

Is your MC responsible for issuing out violations or taking any actions? Is that in the contract? Our HOA issued our own violations and notifications. We simply sent a letter to the person in violation with a reference to what rule they were violating. Gave them a certain amount of days to fix it or face consequences. Those consequences for us was NOT fines. (Not a believer in fines). It was simply that we had the right to remove/fix the violation with the HOA's money and send them the bill. Which we were not going to find the cheapest contractor to do so. (hint hint). If that was not paid, then we would place a lien on the home for that amount of money owed.

Fines work like speeding tickets. They are also NOT lienable. You can not place a lien for unpaid fines nor foreclose for them. There are some HOA's that do have some "tricky" collection policies in regards to how they do it. However, my opinion that is crooked and wrong.

The other issue is that your HOA needs to have an established fine schedule before using fines. A HOA generally has the right to issue fines. However, the definition is lacking. That is when your HOA has to make up a list of violations and the cost of each. Each member then has to be informed of this fine schedule and have agreed upon it. It may be a board vote or it could be a member vote to accept the fine schedule. Depends on how it is done and your documents. I'd talk to a lawyer about this first if wanting to institute a fine schedule.

I think you may have the wrong impression of what your MC is to be doing. Read the contract. As far as dues, it's also good to have a solid policy in place. We have a 6 month behind we lien policy. Our bookkeeper would then place a lien after we the board voted on it. A lien may or may not cost money to file. So may need to check that process out as well.

Your MC is still a sub-contractor to the HOA. It does what your board is to tell it if it's in the contract to do so. Violations notifications can be optional. It is the HOA's responsibility to regulate violations in my opinion as it is the HOA's rules in violation NOT the MC's. The MC is just to be aware of the rules but they do not live in them.

Hope this helps.

A HOA is either run 2 ways... The Developer or The owners themselves. If it is the owners, then they work for free as volunteers and any entity that is paid is a sub-contractor. If you receive a check and have a contract, then you are a sub-contractor. A developer may work as their own MC. They would not then be a sub-contractor.

The OP mentioned they had a board in place and a MC. That would make me assume they are owner owned/operated and paying a MC to handle certain issues. Nothing wrong with that situation. Just realize that there is often a blurred line in that relationship and dependency on a MC is NOT recommended. It is NOT the main source of information a HOA should go to. It's the second or last...The answers are in the HOA's documents first and foremost.

"If you pay them, then they are a sub-contractor"

Melissa I think you may be a bit too narrow in your criterion for determination of what a sub-contractor is.

This is fine for you but it is not typical in industry.

Example:
The HOA has a contract with an irrigation company (IC) to replace underground sprinkler piping. That makes the IC the contractor.
Now the IC hires a ditch digging company (DDC) to do all the trenching, etc. The DDC is now the sub-contractor to the IC. The IC pays the DDC not the HOA.

So actually in most cases an HOA's MC is considered the [prime] contractor.

RwT*

It's pointless to try and discuss anything with you.

I could go on and on, but hopefully you can see that MC CAN'T be thought of a someone like a plumber.

Melissa

It has nothing to do with being called a sub contractor. It has to do with you really think a MC does or doesn't do. I don't think you fully understand what MC's really do.

I don’t think it’s micro-managing – it’s not like you’re checking in with them EVERY DAY. And you’re right; the Board is ultimately responsible for managing the association’s assets and the property manager works for the Association – not the other way around. A monthly follow-up should be sufficient and the manager can always call you if there’s something that has to be addressed immediately.

When I served on my board as the treasurer, I would occasionally see delinquent accounts with balances that indicated they were over 60 days, but hadn’t been referred to the attorney; per our collection policy and I’d email the property manager and collection manager to find out why.

Keeping track of this stuff is one reason why we found there were times when the collection manager would tell our attorney not to file an appearance in a bankruptcy or foreclosure proceeding – which wasn’t his decision to make. He really was trying to save us money on legal expenses, but there were a few cases where the Association could have collected some money, but because we didn’t file a proof of claim, we lost out and had to write off the account.

Before I left the Board, I persuaded my colleagues to adopt a policy requiring the property manager to immediately refer all bankruptcy and foreclosure notices to our attorney with the homeowner’s updated ledger and then the attorney could contact us with a recommendation on what to do next, so we wouldn’t throw good money after bad. In the end, our attorney and the collection manager complimented me on my attention to the accounts – the attorney noted that most of his clients let the property manager handle everything and it took time to figure out what they really wanted. So there.

Just make sure all the board members are being kept in the loop and decisions are being made according to your documents and you should be ok. for example, if you and the manager exchanged emails discussing an issue that will have to be decided by the board, board members should be copied on those emails so they can weigh in and all the emails should be attached to the board meeting minutes during which the issue is discussed.

And yes, I know some states have specific rules on emails and other discussions between board members outside regular meetings, so check with your attorney on that too.

Many times we see the complaints posted that our MC does, thinks, says, so and so like the MC is running the HOA. This from owners and BOD members. I believe many people believe the MC is the owner/controller. On the other hand, many BOD's put the MC in this tough position as the MC is simply doing as the BOD requests. Cracking down on violations is a classic example. Let us pay the MC to be our whipping boy is valid if they want to be.....LOL

When the BOD thinks the MC has improperly taken control, it is time to get the control back where it belongs. With the BOD.

When the BOD finds out the MC is charging for/making money on things not expected, even if in the contract, it is time to re-evaluate the contract.

When the MC will not do as the BOD requests then the BOD must look at are their requests proper (legally and within the confines of the contract) and if yes, then have a fact finding meeting with the MC and inform them either do it as we wish or you will be replaced.

It can be a vicious circle with plenty of finger pointing between owners, the BOD, and the MC.

We are transitioning from developer to owner control. It is a very amicable transition but we find out more and more each day. Our developer contracts with a local MC for landscaping services (only landscaping) and we are discussing hiring them as our MC. The MC met with the transition board and as part of our discussions, informed us they were having problems with several owners who are calling them and complaining about landscaping. As of now they politely say they contract with the developer and please call the developer with any concerns him. The MC said they were concerned that these same owners (plus others) will pester the hell out of them if they become our MC. On our list of things to do is discuss a policy on this. I lean toward owners bringing complaints to the BOD, not to the MC. The BOD will deal with the complaints. The prospective MC says that is how they believe it is best handled.

Any advice from others?

You can't control people from contacting the MC in many cases. That is an aspect that's going to have to be accepted. It is just very difficult to convey the line or responsibility of each entity. If the HOA hired the lawncare, then the people should complain to the HOA to communicate to the lawncare. That is how we handled it. Being the MC is the conduit to the lawncare in John's case, then I can see why they would contact the MC over the HOA. That can change once taken over by the owners.

We had a similar issue with our MC/accountant. They did not place liens on property that should have had liens. They did not always give us the details on accounts. We did get a collections report for the board. However, there were often little amounts here and there on everyone's accounts. Which you think you pay $50 a month and a $20 late fee then $70 or a $50 amount would show up. There would be like $10 or $230. Amounts increments that like playing football you can't score a 5 or an 8 without some kind of odd thing happening. We had a 6 month we lien policy in place which would be around $600 to $ 720 back dues owed. So you can imagine seeing a $200 charge on someone's account for like 3 months in a row knowing they were never late people can really mess up the financial view. Board members would be like "Do we need to lien? They owe us X amount of $'s for this time period". The problem being these amounts did not add up to 6 months behind or they were erroneous charges that were incurred by previous owners carried over.

Keep in mind our accountant wasn't doing anything "wrong". It's just we did not communicate certain details to them. We assumed some things had been. Like the 6 month we lien policy. The MC does not have such a rule in their accounting methods. That is a HOA decision. So they would not file a lien automatically (some states do file automatically) unless we voted and requested it. We used their lawyer to file liens or foreclosures as well. Which meant that I didn't always talk directly to the lawyer unless it was to sign the forms. That is how I figured out no liens were being filed for awhile because never had signed anything. We fixed that with our 6 month lien policy.

The other nickel and dime issues were kind of minor. It turns out that when people sold or even bought the homes, it was not communicated to the accountant or even us the HOA. Often I had to figure it out on my own and have a timeline for when the sale might of happened. We did not have an official list of who were renters or not. How is the accountant to know this information? It is the secretary's job to do this but we lost our secretary. They were supposed to keep up with address information and convey it to the accountant. Which because we did not know when homes changed hands, the former owner's dues owed would show up. They also could have been prorated dues which would account for the odd amounts. Either way, it was our fault for not keeping up with the details of who owns/rents/moves in/out of our HOA. The MC can only work with as much information we can provide.

So I would take a closer look at the information you are gathering and sharing with eachother. They may not have a way to keep up with who moves in or out. Who is a renter and who is not. Most of the time it's just by looking at the address on the check being written to them. If it's a HOA address one may assume resident. If it's not the one in the HOA then most likely rental property. (Owner lives somewhere else).

I think making sure both sides have the information you both need will help. Plus establishing policy and communicating that is the HOA's policy on certain subjects should clear the air. The MC's policy of collections and how to collect may not be the same as the HOA's. So define it and have them adjust to it.

I ask that all keep one thing in mind. Things cost money meaning what are you paying the MC for? We are presently discussing this. I maintain it is like a Chinese Menu. One from Column A, One from Column B, and one from Column C from a low of $10.95 per person to a high of $34.95 per person. You choose. Lobster you say..........LOL

Recent conversations among our Transition Committee was dog poop and MC. I said if we are willing to pay enough the MC would probably provide a 24/7 Security Service to catch the errant dog poop on my lawn dog owners. Someone was actually interested in what would that cost.........LOL

I'm personally moving away from such 'call-outs' for people to back-up their claims.

Some folks [here] have made it clear they are posting their OPINIONS based on their experience and not necessarily sound advice backed by research and facts.

RwT - every situation is different even within an association, people are different, state laws are different, governing documents are different etc. etc. etc. It is pretty much guaranteed that most of what you read here should be taken as an opinion and is only meant as such.

However, feedback from other people can be very helpful in viewing your situation from another angle.

Owners not following reasonable rules and regulations can hurt the association and can also be a liability to the association.

Melissa - you still didn't explain how you get owners to follow the Bylaws if they decide they don't want to - without applying fines. Most of what you have suggested is what we do as well, but while most owners do co-operate there still are those few owners who are determined to do as they please regardless of what the board or MC does or how it affects the association, other residents and co-owners and "nobody is going to tell them what to do". If you have a solution for those owners please share.

Ohio changed the law because a fine wasn't reason enough to file a lien and rightly so, but they also realized that everyone doing as they pleased was a detriment to the association and it's well being.

So they just refuse to pay the bill - same thing as refusing to pay a fine. Everyone who has been on a board probably has come across this type of owner. It isn't realistic to quote specific cases because as I previously mentioned, every situation is different and needs to be approached differently.

It's not that what you are saying isn't accurate but I still maintain that sometimes fining is the best solution for a particular situation when other approaches have failed to produce results.

typo: MUST follow / not my follow

John B- your point is well taken but I assure you that we are very careful to stay within all legal limits and restrictions and every resident and owner is fully updated on any pending changes and has an opportunity to voice their opinion.

Unfortunately, many owners don't attend meetings, pay no attention to notices, mailings etc. and don't bother checking periodically with our website, so no they aren't always knowledgeable about things they need to know but the Association is their business and they have a responsibility to become informed.

Again, thank you JoK and others who answered my original question. It has been very helpful.