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JeffreyB (Florida)
Posts: 11
Posted:
I am on the Board of Director's for a small PUD development in Orlando, Florida. For the past 3 years the then acting "President" refused to hold elections as required in the Association's By-Laws. This person had decided that they were going to run the Association as they felt necessary. However, recently as the Association went broke, the common areas fell into ruin and many homeowner's made changes to their property resulting in multible violations this "President" hired a professional magement company to "clean-up the mess". There are no financial records for the past two years, no annual report sent out to the homeowner's, no budget, no violation letters and no minutes from some of the HOA Board meetings especially the one where the magement company was hired. My questions for discussion are as follows. How do we now collect back dues from homeowner's who refussed to pay because of the condition of the community, no annual accounting report, and no elections. How do we get the homeowner's who changed their landscaping, paint, put up fences, changed their roof color, added driveways, walkways, etc. How do we go back and enforce the Rules and Covenants and make these homeowner's comply with the existing Rules? And most importantly, can we now use the "right of entry" clause on the Homeowner Docs to "enter" a homeowner's property to fix and or replace a violation and then hold the homeowner responsible for the cost? And also, are we stuck with the two year contract that the previous "President" signed with the magement company.
LindaC3 (Florida)
Posts: 526
Posted:
JefferyB..............Are you indeed an HOA as a recorded with your Clerk of Courts ? Do you CC&R'S that were recorded at that office ? I would first say that we need to know that info first...Then maybe someone from the forum could "guide" you in your quest........ LindaC
RobertG (Arizona)
Posts: 505
Posted:
I would agree you have a boat-load of issues to handle before working on the issue you have stated.

However, if you look at many of the responses on this forum and talk with lawyers, most people state you have a huge liability as soon as you step on a person's property, even if your CC&Rs give the authority. Just be sure you have all the legal aspects resolved before you do anything.
JudithC (Virginia)
Posts: 253
Posted:
1. Most documents say that the various covenants are separable. Just because the association was not doing its job properly is no excuse for not paying your assessments. I am sure you will be able to collect the past assessments.

2. The ARC violations are not so long standing that you couldn't come up with a due process procedure and try to enforce your covenants through that. We have entered property here, and it does get the homeowners attention! Before we did that, though, we had tried to enforce the violations through letters, hearings, assessing penalties. Then, when all else has failed, entering the property. Our attorney was pretty conservative. Of course your documents also have to say you have the right of entry.

Can't a lousy president make things go downhill fast? I would also probably want to do something to have the current board re-vote on the management company as it doesn't really seem like any of your contracts are valid -- at least I would talk to an attorney about that.

BradD2 (Florida)
Posts: 418
Posted:
Jeffrey, I suggest you contact an attorney in your area. I know1 of Clayton & McCulloh at http://www.clayton-mcculloh.com:80/ would qualify. They have some offices in the general area and offer a service called Covenant Revival. The general description was that if an Association hadn't really been active, hadn't paid their taxes, hadn't submitted the yearly corporate report and many of the problems you mentioned then they would help you get back on track, send out letters to the homeowners with copies of the covenants, let them know that they are going to be enforced again, etc... They also offer classes every so often to their clients; I have heard they are pretty good.

As for right of entry, don't do it. This is added by a lot of developers to make the Association seem more powerful it is still trespassing in almost all instances. If something happens the Association is partly liable. Just about every attorney you talk to you will tell you it is not a good idea without a court order.

As for the contract with the Management Company, you are probably stuck. If you really don't want to use the service of the Management Company then talk to them; perhaps you can come to an agreement. Most contracts do have early termination clauses if there is just cause.

As a side note, read Florida Statute 720 at http://www.flsenate.gov/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0720/ch0720.htm It is the law in Florida that will superceed whatever is in your covenants.
HaroldS1 (Arizona)
Posts: 314
Posted:
Brad's suggestion on terminating the MC by notice if that is allowed in your contract is a good one and I was going to suggest that myself but he beat me to it! However, unfortunately those contracts are written by the MC and blindly signed by HOAs so that it might be impossible to cancel. Someone wrote here recently their contract contained automatic renewals. Read yours carefully before acting. Harold
PaulM (Pennsylvania)
Posts: 1,347
Posted:
Jeffrey:
As for your problem...'are we stuck with the two year contract that the previous "President" signed with the management company.' I would think not.

You can check 2 places for this answer:
- your own community's covenant document: Declaration & Bylaws or
CC&Rs. It may state you are able to contract with a management company and then also that you can cancel with ? days notice. This document would supersede the mgmt. contract.

- the mgmt. contract should be in accordance with your CC&Rs in that you are able to cancel with ? days notice.

It would seem as your first priority, to contract with a reputable and professional management company, one who has proven experience in handling PUD developments. Check out those in your area since it is important to have the agent available to come onsite to monitor for violations, etc.

Once your mgmt. company contract is signed and on board they can then advise you of the Board's responsibility, how to handle all the current problems and how to prioritize them.

Since it does not appear, from all the problems listed, that you had a responsible Board and mgmt. company in the past, you will need to really buckle down and prove that 'from now on...' the community is being managed properly--back dues will be collected (work out a payment plan) violations will be addressed, and now in going forward all will be done according to your official documents.

A good management company will be a valuable resource for you and will council you on the right way to move ahead. However, their fees may be substantially higher than what you were previous paying, but you weren't getting anything for your money...

If you surf this site you will find Roger's postings on what a mgmt. company can offer you. Good Luck!

Jadedone4 (Virginia)
Posts: 495
Posted:
Agree with everything from above post except the "conditions" from your governing documents affecting a contract with the MC.

The contract either drafted or written by the MC is their agreement, which is often the same which is given to the HOA across the road from yours. I doubt that any HOA's governing documents would be able to "supersede" a contract. If it were deemed to have been a conflict, the MC would be harmless to that, because it was the HOA's responsibility to point out the governing document's issues with the MC contract/agreement. As such it is the responsibility of the board to assure that the documents they are signing on behalf of the HOA are "in-line" and offer no conflict to the governing documents - the MC is not responsible to review your governing documents and draft a contract which is appropriate - the board however, has that responsibility, and must negotiate those items/elements from/to the MC's agreement/contract so that they are not in violation of the governing documents.

There are some governing documents (and local, or state statutes) which limit the period of performance on an HOA contract. Most MC's will align their contracts to satisfy the maximum period under the local statute, and not the indivdual HOA's requirements.

As poster's here have stated, be very leery of "automatic renewal" contracts, UNLESS you are familiar with the T's/C's of such, and that the HOA stands to benefit (i.e. multiple year contracts should include multi-year discounts of pricing to the HOA for continued services). Also, if you are entering into a multi-year, or automatic renewal contract - read, read, and have an attorney read/review the "out" clauses that you have availablt to the HOA. You do NOT wand to be saddled with a bad contract, which the MC offers even worse service. Mostly I seek contracts which are "balanced" if the HOA fails to pay, then the MC can take "xyz" actions, and if the "MC fails to perform to a standard, then the HOA has remedies/cures to correct or cancel the contract." All too often ANY (not just MC - can be your phone service, landscaper, snow removal, etc) contracts sent to HOA's are imbalanced, and do not offer the best "outs" for poor performances.

When considering a contract one of the most important elements for me is the balance of performances.

RogerB (Colorado)
Posts: 5,067
Posted:
I concur with Jadedone that it is the responsibility of the Board to make sure their contracts comply with their controlling documents. If an Agreement doesn't it is the Board's problem, not the other party to the Agreement. With regard to term of the Agreement I recommend the Board always include a clause which allows either party to terminate, without cause, upon 30 days written notice. This resolves any concerns about automatic renewal. If a contract is written by the "other" party it probably is written in their favor. So I would always review and require changes when necessary.

When one is not competent to evaluate the critical aspects of an agreement, I would recommend using an attorney.
PaulM (Pennsylvania)
Posts: 1,347
Posted:
Jadedone:
I believe you may have misinterpreted my post to Jeffrey. I was specifically stating that IMO, he is not 'stuck' with the mgmt. company for the next two years, but he should refer to the documents to learn if they speak to the assn.'s ability to give a number ? of days notice for a cancellation of the mgmt. company's contract. Also, I suggested he visit his state's documents to review same.

I was not suggesting that the overall 'conditions' from the governing documents must confirm the mgmt. contract. Thank you for your post.
Jadedone4 (Virginia)
Posts: 495
Posted:
Paul, gotcha... I understand your points now !!

My apologies, I am a "contracts guy" by profession and when I reviewed my HOA's contract (entered into by Developer, and his "staff" acting as our HOA board), there were many issues in the terms/conditions that were very unbalanced. The "out" clauses were conditional where very limited "for cause," and termination criteria, really allowed the MC, options to protest that would tie up the business of the HOA for periods of time (90 days). I tend to favor the "USA legal tender" ($$) rules - if I pay you for a service, then I expect satisfactory service, if you fail to provide that service, it should be up to ME (not a list of criteria in a contract to be mutually agreed upon, but only with YOUR consent), to cancel the request. If I fail to pay you, then you have the right to demand payment, or not to perform services. All too often contracts (not just MC contracts, just about every contract a typical HOA enters into) are drafted to favor one party's interest over anothers. There is abuse of HOA's and of vendors happening all of the time - but to have unbalanced contracts only aids in the mis-trust cycle. All too often you have folks on both sides of the coin (HOA and Contractor) who are attempting to "get something for free/nothing," or at the loss of the other party.
TomK2 (Ohio)
Posts: 39
Posted:
The first thing I reccomend is to have the HOA "SUE" the past president for his conduct in the past! That will start the basis for what is wrong and why and how you are going to correct it. Second I would audit the books who knows what you will find!
Jadedone4 (Virginia)
Posts: 495
Posted:
TomK,

"Suing" the past President, as the current President of the board would serve no usefull purpose. His actions under the "DOL" insurance policy, would be deemed protected. While not always agreeable, the actions of a past officer of the HOA, unless fraudulent, or deliberately harmful (say the Secretary was an attorney, and in the capacity suggested a course of action, under and in the vein of their legal expertise, which turned out to be harmful to the HOA), then and only then could an officer's actions be deemed deliberate or inappropriate.

I do however fully agree that an audit is appropriate when an HOA changes the "guards."

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