directors who also hold contracts with the HOA

Boy, lots of things going on here.


Hopefully the Association has been properly issuing 1099-misc or W-2s (whichever is applicable) to the individual and the IRS. If they have not, they need to start.


Keep in mind that the contract is with the Board. If there are enough members who are unhappy with the service, ask to see a copy of the contract (if any - as often there are not when utilizing other members to perform services). This way, you will know when the contract is up for renewal.

Then you need to decide if all of you or some of you want to run for a position on the Board so you can be part of the decision process.


So what, it's not relevant to obtaining bids or not. A Board has a fiduciary duty to the Association and it's members. In my opinion, one way of exercising that duty is to always obtain bids when a contract is up for renewal. This is the only way the Board can see if they are getting the services they desire at an appropriate price.

As an example: Last year our contract with our trash service was up. The contract had an auto renewal clause and when I suggested we seek bids, the Board was split (as we had no problems with the contractor). The deciding vote said to get bids only because I had already drafted requests for proposals (RFP) to be sent out. Turned out we were able to keep the same contractor and save $10,000 per year.

So yes, in my opinion, every contract should be bid out. Not to take the lowest bid, but to ensure you are getting the services you desire at a fair price.


Based on that statement alone, this individual should be removed from any position dealing with Association funds.


Yes, but they have no binding effect on the Board. It may also annoy a contractor who provided a bid only to find out that the individuals who asked for the bid had no authority to speak for the Association or even to award a contract.

So, even though you could seek bids, I wouldn't do it without the approval of the Board (volunteering to get the bids on the Boards behalf).


There wouldn't be. As long as the Board is aware that the individual providing the service (or bidding to provide the service) is a member of the Board, there is no conflict. Of course, that individual should not have access to any of the other bids and should not be allowed to vote on whom to award the contract to.


Draft an RFP. Present it to the Board specifying that at the very least, to fulfill their fiduciary duties, bids should be obtained. Tell them the story I told you about when we solicited bids for our trash contract. Then make an offer that, with the boards approval, you are willing to do the work required to obtain the bids and summarize them so the Board can make a decision.

If the Board says no, your other option is to gather support and recall the Board or simply not reelect them to the Board at the next election.

Sorry, should be "your community's needs."

I see that Tim & my posts crossed. He thinks your'e not on the board and I don't know. Since, Lorraine, you know the details of a board discussion that I'd think would have occurred in executive session (a personnel matter), I thought maybe you're on the Board.

But if you're not, I agree with him that you try to work with the Board to put these services out for bid. If the Board refuses, vote some out at the next election and replace them individuals who will work at what's best for your HOA, or mount a recall campaign.

Tim's right a conflict of interest is not necessarily a problem, but it can raise questions... and eyebrows!

Since most HOAs have pretty much the same services, I don't think the one(s) the director provides would identify your community. Care to share?

How many directors? How many homes?

Perhaps your HOA attorney can give your board a little seminar of fiduciary duty!! Or your prop. mgr,. if you have one. Perhaps the other directors are not aware that they're contributing to nasty situation, which may even place them in a problematic legal situation of being of NOT doing their duty of care and loyalty to your Association!

At the VERY least, Lorraine, get yourself on record, a making a motion to get bids for her services. That will at least show you tried a little.

So the devil is in the details. The member in question supplies a service to the property which is given free of charge. Now you wish to question her paid contract and possibly replace her. Do you have someone willing to provide the free service in the future? If not her then who?

YOU perhaps?

Just what service is she now providing?
What is the amount she is paid?
How long has she done this job?

And are there others who would provide this service at a significantly lower cost than this board member?

Sometimes when you rock the boat you end up falling into the water too.
And I do not think simply allowing a contract to renew annually without seeking bids is a breach of ones fiduciary duty.

We have an MC for over a decade their contract is renewed without going through the process of asking for others to provide bids.

Make sure you understand just how many worms are in the can before you decide it is best to open it.....

Lorraine,

The fact that you are a Director makes my suggestions easier to implement. You still volunteer to do the work and you still draft the RFP.

As a Director, you should ask if the Treasurer is issuing a 1099-misc (for services performed by an independent contractor) or a W-2 (for services performed by an employee) or are they not issuing any at all.

Here is information from the IRS website:

Employee vs. Independent Contractor – Seven Tips for Business Owners

Independent Contractor or Employe IRS Publication 1779

Employer's Supplemental Tax Guide IRS Publication 15-A

Melissa

The idea of requiring contracts to be renewed annually with three bids is a good idea. I know the existing board would vote that down; are you aware of typical state HOA law that speaks to that issue? Any state law that trumped the board seems the only way around their blocking annual renewal.

So,, again, how many homes/units? How many directors?

Is this about right, in exchange for personal favors for which owners should pay handyman or other persons, your board past this directors to do shoddy landscaping. And directors benefit the most??

Do you have property mgr.

Is Oregon an open meeting state, i.e., board meetings must be posted x days in advance and owner can attend?? If so, encourage a bunch to show up and ask for bids for a new landscaping firm. If not, encourage H/Os to prepare and pass around a petition requesting much better service.In other words, even with only about 50% owner occupancy, if half of those would raise a little hell, your grounds might be properly cared for. this is the Board's job!

Sounds like she is working in a PM capacity rather than a landscaping capacity. I don't think that a lot of posters here pay a Director for being "on call." My organizing docs wouldn't allow it.

My advice is just good business practice. Simply put, your HOA has the ability to modify its own rules it wants to live with and enforce that are in compliance with state, local, and federal law. There is no need for a law to practice good business. If a large group of members or board members want to change something you can. It is all in your documents on how to make it a rule. However, taking 3 bids and 1 year contracts is more of a geneal rule of operation. It best to just use it as a rule of thumb or put it in the by laws...

JonD1

I thought all of us, as directors, were providing services, additional or otherwise, at NO cost by virtue of being volunteer directors. but maybe I'm off base here? Are you suggesting that someone ingratiating herself with "additional" help in silent exchange for substandard contracted service is a good trade off? If we're talking about running a business, the risk taken to have an unpaid on call person in exchange for not ensuring owners' property values seems a high risk. Forgive me, but your comments feel a bit defensive and do not acknowledge the previous circumstances laid out in this situation.

Lorraine just how long have you now served?

Seems from some of your answers and statements you don't have a complete and full understanding of the details, payments, amounts, payroll arrangements, contracts, agreements, or history regarding this matter. None the less you seem to have decided what is best.

So when a situation next arises and someone needs to respond will you and the other board members be able to address this?

What I was suggesting is this arrangement has been in place for more than a decade. Were all the board members except you blind to the pitfalls?
And as I suggested you description "some" of the owners were not satisfied I have to ask just how many in your case is SOME? And would you be among them?

Why is it a majority of the board see this differently than you? Why is it other owners sign their proxies over to this woman? Or is it YOU are the only ETHICAL person involved as Kerry has now stated. Quite a stand from someone with no real knowledge of the situation.

Defensive?? Not so much. Puzzled by your crusade to right a wrong only you seem to see. This woman was hired by the majority of your elected board.
This woman provides some services neither you or anyone else seems willing to take over. Her efforts seem to be appreciated by some. Not including you.
Now YOU wish to seek bids for the contracted service YOUSELF without being requested or asked to do so.

Sounds like you have determined everyone else is wrong except you.

Will be interesting to hear how this plays out when you explain to the board they are failing at their jobs IYO and perhaps you could throw in Kerry's assumption you are the ONLY ethical person serving on the board. That should sit well with the others....

Typical landscape contracts could not include the number of personnel performing the service or how many hours they should spend providing the service.

If your contract includes those things, it's likely the IRS would consider the individual an employee.

Our landscape contract simply states what services would be provided. The only frequency of any of the services is mentioned is the maximum number of mowing services that will be provided, or the number of leaf removals.

Instead of trying to convince the Board to solicit bids, try asking the Board to compel the contractor to live up to the terms of the contract or break the contract itself.

Chapter 94 — Real Property Development
2013 EDITION
ORS 94.700 Duration and termination of initial management agreements and service and employment contracts
(1) Except as provided in subsection (2) of this section, if entered into prior to the meeting called under ORS 94.609 (Notice of meeting to turn over administrative responsibility), no management agreement, service contract or employment contract which is directly made by or on behalf of the association, the board of directors or the owners as a group shall be in excess of three years.