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Property Management Contract

Started by AllanP1 • 19 replies • 1825 views

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AllanP1 (California)
Posts: 9
Posted:
Our contract with property management says any expenses over $2000. we are to receive 2 to 3 bids or estimates. When I bring this up another board member says its up to the board if we want to enforce this provision. I say if its in the contact then it should just happen and the board doesn't have the authority to change contract. Another board member says the board can do this. I'm concerned about price fixing and other financial abuse. This is a large 240 unit townhome complex.
TimB4 (Tennessee)
Posts: 21,062
Posted:
Allan,

Personally, I believe that all contracts should be placed for bid.

Now, putting contracts out for bid does take time and energy. Letters describing the work involved need to be written and sent, meeting with contractors to look over the job needs to take place, bids reviewed, contractors/companies checked out, comparisons made and then, finally, the Board can make a decision. Perhaps it's as simple as the people on the Board simply don't have the additional time to invest.

My suggestion is that you approach the Board offering your time and energy to do this process.
EricH8 (Virginia)
Posts: 116
Posted:
Probably true that it's the board's option to enforce the 2 to 3 bids provision. The management contract is between the board and the management company, not between the individual homeowners (you) and the management company.

The potential for price fixing and other financial abuse is indeed there. On the other hand it is possible that if you always got 2 to 3 bids for the same kind of job on multiple occasions, the losing bidders would stop bidding, reducing competition for your future business.
JonD1
Posts: 2,350
Posted:
Quote:
Posted By EricH8 on 11/16/2014 11:25 AM
Probably true that it's the board's option to enforce the 2 to 3 bids provision. The management contract is between the board and the management company, not between the individual homeowners (you) and the management company.

The potential for price fixing and other financial abuse is indeed there. On the other hand it is possible that if you always got 2 to 3 bids for the same kind of job on multiple occasions, the losing bidders would stop bidding, reducing competition for your future business.

Well said and correct. The contract is an agreement between the Board and the MC if both parties agree to any changes or differences so be it.
There are many situations where it might become unnecessary and unproductive to seek multiple bids. And seems like a $2000 price point to seek bids would be low in my experience.

AllanP1 (California)
Posts: 9
Posted:
Thank you for your replies and comments. I'm still going to request that most, but not all work contracts be put out for multiple estimates on work to be preformed. It probably will not happen, but I feel a need to keep trying. MC only permits contractors that they have approved. I have, as a Board Director, offered my time to assist with obtaining estimates. The negative reaction is another red flag for me. The work being preformed is not always satisfactory. When I mention this, MC always sides with contractor or says we should pay for a project manager. No multiple estimates, unsatisfactory work {to me}and no follow up is a concern. Again Thank you. Allan
TimB4 (Tennessee)
Posts: 21,062
Posted:
Quote:
Posted By AllanP1 on 11/16/2014 12:34 PM

MC only permits contractors that they have approved.

Although I understand it, I have a problem with this statement and practice.

The Board is to be the one making the decision on who to award the contract to. The Board, if desired, should also specify what contractors a request for proposal should be sent to.

It appears, based on that statement, that the Board has delegated more authority than they should have (in my opinion).

JonD1
Posts: 2,350
Posted:
Can you give sone examples of what you consider unsatisfactory work?

And as you have offered to oversee projects can I ask what experience or knowledge you possess?

I do agree with you contractors who have the proper insurance and required licenses need not be excluded based on perhaps not having had approval from the MC.

Seems like you need to dig a little deeper, find some support on the board, and come up with a plan that might succeed .

Putting yourself in conflict with your fellow board members and the MC will not accomplish what you want.
TimB4 (Tennessee)
Posts: 21,062
Posted:
Quote:
Posted By JonD1 on 11/16/2014 12:50 PM

And as you have offered to oversee projects can I ask what experience or knowledge you possess?

Jon,

See Allan's earlier thread from 2012: Subject: vender contracts
JonD1
Posts: 2,350
Posted:
Thank you Tim so this has been an ongoing issue.

In many cases the more you know the more things become.
JonD1
Posts: 2,350
Posted:
Thank you Tim so this has been an ongoing issue.

In many cases the more you know the more things become CLEAR.

HARD TO WATCH FOOTBALL, TYPE AND POST......
RichardP13 (California)
Posts: 1,767
Posted:
Actually, IF you read the management contract, it clearly states it is between the Association (legal name) and the management company, not the Board for Directors. If the provision is not being followed, the contract should be amended.
AllanP1 (California)
Posts: 9
Posted:
Examples: Fire lane/curb painting showing bubbles, painted over dirt, or missing area's as cars blocked area. We received no notice when painting was to take place. HOA paid extra to have contractor return to complete job. Asphalt crack sealing missing area's. Pool bathroom painting holes in walls not spackled, floor paint peeling in first 2 weeks{why even paint floor?}, missed painted area's after partition relocated. Entry sign on gate not level, new clubhouse kitchen cabinets lacking drawer/ door handles {installed by painting/ dry wall company} RV lot not sealed with slurry during road sealing. walkway globes fastened with duck tape after bulb replacement. Painting contractor painted rotten wood during complex painting. I could keep going but I hope you get the idea.
Experience, Landscape maintenance/construction including estimating, 25 years, painter 4 years, carpenter 2 years {rough framing} Plumber 1 year, school trained Automotive mechanic and 5 years US Army engineers {Heavy Equipment} And the bank and I own 2 homes that are maintained by me. You could say "not a spring chicken".
EricH8 (Virginia)
Posts: 116
Posted:
Quote:
Posted By JonD1
And as you have offered to oversee projects can I ask what experience or knowledge you possess?

This is a common way of disregarding people's concerns about the work being done. Often stated as "You're not a (insert name of profession)." But the specific examples provided by AllanP1 show that it aint rocket science what the contractors are doing wrong. And even if rockets were involved, you don't need to be a rocket scientist to know the rocket blew up. Or "You don't need a weatherman to know which way the wind blows."

If the customer is not qualified to determine if a job is done as agreed upon, you could also say the customer is also not qualified to determine who is qualified to determine that the job was done correctly.
KerryL1 (California)
Posts: 14,550
Posted:
I'd be unhappy too, Allan, if I saw the shoddy work that you see. who supervises this type of work?? Your PM? Is your PM on the premises full-time?

Do you have no maintenance staff or building engineer or full-time handyman??? Put another way, don't you have a staffer who does things light walkway light bulb replacement?? If you don't perhaps your board needs to hire a firm who can supply you with a handyman.

But you need to get the Board to agree to either change the contract with the MC or enforce it. Your Board should vote way or the other at a meeting about this. If you've alienated your fellow directors, you won't get very far unless you can encourage homeowners to attend meetings an complain.

We had, for several years, a Building Committee that did walkabouts inspections and made recommendations to the board every month.

Our contract with our PM is that she must bring us--the Board-- two to three bids for work over $1,500. But she often does bring us competing bids for much smaller contracts, e.g., lease agreements for our copiers. She has a lot of contacts with other PMs in our high rise area and they do rely on one another for references. There are many vendors who do not want to work in downtown settings due to parking problems.

RogerB (Colorado)
Posts: 5,067
Posted:
AllanP1,
Your HOAs management agreement should always have a clause which addresses this. Our management agreements all state:

I ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties listed above. No variance or modification thereof shall be valid and enforceable except by supplemental agreement in writing by both parties.

The Board acts on behalf of the Association and such power should be provided in the Bylaws. With that provision the Board does have the authority to change the management agreement with the consent of the management company. FYI, we often agree to make written amendments to our management agreements when asked and approved in writing by an HOA Board.

JonD1
Posts: 2,350
Posted:
Quote:
Posted By EricH8 on 11/16/2014 1:50 PM
Posted By JonD1
And as you have offered to oversee projects can I ask what experience or knowledge you possess?

This is a common way of disregarding people's concerns about the work being done. Often stated as "You're not a (insert name of profession)." But the specific examples provided by AllanP1 show that it aint rocket science what the contractors are doing wrong. And even if rockets were involved, you don't need to be a rocket scientist to know the rocket blew up. Or "You don't need a weatherman to know which way the wind blows."

If the customer is not qualified to determine if a job is done as agreed upon, you could also say the customer is also not qualified to determine who is qualified to determine that the job was done correctly.

That's why I asked for examples rather than jumping to conclusions uninformed.

And yes there are folks out there who know nothing who like to think they are in fact the burning bush.

I once had a board member who thought we should replace all our roofs.

Did she know of any problems we were having with roofs? No
Did she have any idea what this might cost? No
Did she have any idea if we could fund such a project? NO

Then why? "Because I think it is time."

Yes, there are folks who talk out of their ---------------.

Best to determine if you are speaking to one of them.

In the OP's case IMO they need to find support on the board to address their concerns rather than place themselves in conflict with the board members, the MC and accomplish nothing.
AllanP1 (California)
Posts: 9
Posted:
This board was hostile to me even before I became a Director. As a concerned homeowner I began attending board meetings and mentioned that we had landscape problems. They asked for specifics. At the next board meeting I brought a list. As I was giving them specifics, one board member told me to "shut up, we don't have time for this". I responded with 'I'm not finished yet" and continued. Don't think I don't have any successes. I now work very well with the landscape company and have seen a good amount of upgrades and improvement. I can't be leave how rude and arrogant they are to other homeowners. To the point people don't want to become board members or attend meetings. Sometimes we even receive multiple estimates. Its just not consistent. As for my experience, my problem is I don't look for things, I just see them. This forum is very helpful. Thank You
JonD1
Posts: 2,350
Posted:
Sounds to me your maintenance issues might just be the least of your problems.

Step 1 find some support within your community and change the members of the board.

KerryL1 (California)
Posts: 14,550
Posted:
Yes, Allen, despite Jon's & my different approaches, I've mentioned Jon's solution above.
KerryL1 (California)
Posts: 14,550
Posted:
But, again, Allen, does your HOA have no onsite maintenance staff?

Does your PM not oversee vendors' work processes??

Is your PM full-time, onsite??

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