Turn over to homeowners from developer

Started by SheilaH2 • 9 replies • 1623 views

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SheilaH2 (Florida)
Posts: 11

Posted:

The developer recently turned over the HOA to the homeowners. The association is in Florida. There were companies contracted to do the maintenance in the subdivision. One company's contract stated that it needed a 30 day cancellation notice. The incoming Board was notified of this if they opted to hire another company. That never happened and the company that was doing the work is still billing for the monthly service. So, to make a long story short, the Homeowners went with another company and didn't cancel the original company. The company is still billing the HOA. Now the new management company is saying that the developer was responsible to cancel the original company. I say not so. The developer didn't choose to hire another company, the new Board did. Who is responsible to cancel the contract? Thanks for any input>

GenoS (Florida)
Posts: 4,276

Posted:

It's a little hard to follow your post, but one thing is for certain: the board of directors is ultimately responsible. The board can delegate a lot of work to a management company, but the board remains responsible at the end of the day.

KerryL1 (California)
Posts: 14,550

Posted:

Our contract with our Management Company says that only the board acting at a meeting may cancel a contract.

The company that the board doesn't want needs proper written notice, etc., but meantime, your HOA must keep paying it (if I understand you right).

LarryB13 (Arizona)
Posts: 4,099

Posted:

Sheila,

The corporation known as your HOA is a legal entity that exists regardless of whether the developer appointed the board members or the owners elected them. If the current board wishes to end the contract(s) with those hired by the previous board then it is up to the current board to take whatever steps are needed to do so. It is not the developer's job to terminate those contracts if they were made through the HOA. Why is that so difficult to do?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SheilaH2 on 07/14/2015 11:30 AM

Who is responsible to cancel the contract [after turnover]? Thanks for any input>

Shelia,

In my opinion, it was the Board who should have cancelled the initial contract.

In my opinion, the MC should have brought this to the Board's attention when talk of new contractors and the bid process went out. At the very least, somebody on the board should have read the existing contract prior to seeking bids for a new contract.

SheilaH2 (Florida)
Posts: 11

Posted:

Thanks everyone for all your input and replies. I believe, as you said, that the current acting Board should be responsible to cancel the original contract since they are the ones who decided to make the change with a new company.

NpS (Pennsylvania)
Posts: 4,216

Posted:

I don't understand why your MC would think that the developer has any responsibility after turnover unless that responsibility was formally documented. Raises questions about how qualified your MC is.

Sikubali jukumu. Read all posts at your own risk.

ND (PA)
Posts: 792

Posted:

I agree with most others. Board is responsible for cancelling the old contract just as they are responsible for signing the new one.

Seems like the management company is somehow trying to save face by blaming the developer. The management company should have their act together enough to advise the Board of this situation before it happened. They look kind of silly now.

Unless there is documentation stating that developer was responsible for cancelling contracts, then I don't think the management company is correct. Although Florida does seem to do things differently when it comes to HOAs, so I could be completely wrong.

Just curious though . . . What is the contract for? Are you receiving duplicate services? Or are you getting billed and no services being rendered? I suppose this gets on to another issue though outside of your original question.

SheilaH2 (Florida)
Posts: 11

Posted:

The contract was for landscape maintenance. Apparently, the previous company had not been given the proper cancellation notice and didn't know they were to stop maintaining the property.

The new Board jumped the gun in getting things changed without taking the proper steps. It has since been cleared up and the Board is handling the cancellation process.

Thanks for your comments and reply.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Glad things got straightened out.

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