Do we have a case to sue?

Hi again. Well, since my last post we had a special meeting called by the HOA president. He tendered his resignation and the board elected me as his replacement. My concern is over the management company we've been paying for the past 10 years. While we did vote to terminate their services in April, we continued to pay them through this month as they transition our documents and records to us. However, nothing has really been turned over. As far as I can tell, they were not keeping accurate records for us. On top of that, I learned that they failed to file our state annual returns with the Secretary of State for 2013-2015 but they made sure they filed their own returns. When asked to turn over the records for past due accounts in our HOA, I was given an Excel spreadsheet that included 4 past due names of home owners who no longer lived in our subdivision. This means the homes were sold but there's no record as to whether or not the past due amounts were collected at closing. I have spoken to many people who have said that all of their attempts to contact the management company over the past 2 years were ignored. One person documented 54 phone calls and emails that were not responded to.

I think we ought to sue this management company for the fees we paid them for 2013-2015 and it can be done in small claims court. What are your thoughts?

It doesn't have to have anything to do with law, you are claiming they failed to carry out their contractual obligations to you.

Don't get all Perry Mason. The Judge will be plenty familiar with the issues, he's a practicing judge, not a guy from Labor Ready for gods sake

GreggK2, What would your answer be if your HOA took this to Court and the Judge asked "what was your Board of Directors responsibility and their policies and procedeures regarding monitoring of the management company?"

I suggest getting a new management company and learn from your HOAs mistakes. Draft a good management agreement and set up policies and procedures so this can not happen in the future.

Gregg

Taking over the role of president in the best of times is difficult, doing so in your situation with the knowledge you possess makes it more so.

My suggestion settle the matters that affect your ability to go forward minus this MC and the issues they have let slip before you start filing lawsuits.

Have you ever read the contract between the MC and the board?
is there even one?

As others have suggested it is NOT the MC's duty to keep your property on the right track. It is the members of the board who should have done that AND
( this just might sting a bit) THE OWNERS JOB TO MAKE SURE THEIR INVESTMENTS ARE BEING HANDLED PROPERLY!

Was everyone asleep at the wheel? So just might be the case before you find blame to pass out you might review your role in the past and that of the other owners who allowed this to go on.

Hear no evil, see no evil, talk no evil does not work.

My math tells me you have paid the current MC $68 per week over the last 10 years. Just what level of service might you expect for that amount?

Recouping that amount of money is the least of your problems.

And my guess doing so in court might prove difficult.

You claim they have done nothing. But someone is paying the landscaper to service the property.
Someone is collecting the money to pay this same service provider.

It would appear, you lack any real understanding of what it was they were hires to do and required to do under their contract. If in fact there is one.

$68 per week doesn't get you all that much.

To be frank some of the points you have raised don't add up or need to be clarified by you so that you can move forward and clean up this mess before you take on to much and nothing gets done.

How much money does your property have?
Where is it and under whose control?
Who is collecting the dues?
How many are paying their dues and are current?
Who has control of the accounts holding your assets?

Have you found a new MC?
What criteria will you use to find a replacement?
Who is qualified to make that decision?
Stop waiting for others to do what they have shown no desire to do and cut them out.

Can your property afford a new and more involved MC?

These are the issues I would concentrate on for now. Jetison the friend of your neighbor MC.
Take over the day to day operations, collections, banking, immediately.
Get rid of the Treasurer either off the board or replaced as Treasurer ASAP.

Develope a plan as to how things will work from this point forward including keeping the owners informed as to what was found, what needed tobe dealt with, and what will now be done.

Forget filing any lawsuits for now.

Just might destroy any desire by the former MC to cooperate with you going forward if there is any interest in doing so left at this point.

The blame lies with those on the the board and those who allowed them to fail so miserably at governing their property.

Look no further till you clean up that mess.

I agree with Jon. It may be satisfying to take legal action against the MC, but it may simply boil down to the fact that it's not worth the trouble. You have a lot more work ahead of you to figure out the Associations financial status, identify what records are missing, identify what has to be taken care of quickly and what can wait.

Work on what is needed for your Association first. This could take a year or more to figure out and you are going to need the assistance of the MC and the past board members to get it done properly.

Have you replaced the Treasurer yet?

Agree with Jon generally.

But I still think you may have a case. Not the one you described however.

As the new Prez, I suggest you send a certified letter to the management company stating that you will pick up the HOA's records on a specific date - Set that date to coincide with your state's requirements for making documents available to HOs.

What they provide to you will tell you what you need to know about whether to sue. If the records were reasonably well kept, forget about it. But if all you get is some assorted junk, you might very well have a claim.

Today all you have is conjecture. Tomorrow you will have documents that will explain many of Jon's questions.

Best of luck.

I think what we are saying is similar but slightly different Jon.

If the Board relied on the MC to maintain records and there are few or none that the MC can provide, then there may be a claim. The contract you ask for should be part of those records.

Like you I agree that information collection is vital at this stage. I just think there is a procedure to follow to request the information and preserve a potential claim at the same time. No harm in doing so.