Requesting a copy of Property Management's contract with HOA

Contracts between an HOA and a property management company are all different, and I'm interested in the one with ours. Many times it's not clear to me what duties we've contracted with them and which ones we haven't, and I just have to take the word of the MC. I've asked for a copy of the employment contract from the management company, but they tell me the contract is confidential and only for the Board to see.

Our HOA By Laws and Washington state law (RCW 64.38.045) have the following statement, but I'm not sure if this means that ALL records are available, or if it's referring to only FINANCIAL records. Could someone clarify?

(2) All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent.

Next question: If owners are entitled to a copy of the employment contract between our HOA and the MC, how do I obtain that if the MC is unwilling to provide it? Thank you.

Assuming you just meant contract with the MC, and there is no issues with employees, once a contract is in effect any member of the association plus the banks etc can see it.

It is not up to the MC to show you the contract, it is your boards responsibility. Write them a nice but slightly threatening letter

Thanks for the advice. I emailed the MC with my request and copied the Board members. So far, no response from the Board and no copy of the contract. I'm happy to send a nicely written request through the U.S. Postal Service, certified, and return receipt, but I have no clue what I would threaten them with to get them to respond. Ideas?

> So far, no response from the Board and no copy of the contract.

The text you quoted does not require them to send you a copy of the contract. It probably obliges them to allow you to examine the contract.

I was responding to MarkM's suggestion to send them a slightly threatening letter. I don't know why I need to do that, either, but all of you have more experience with HOAs than I do, so I needed to ask.

The main reason I would like to see what we've contracted them to do is because they seem really incompetent; however, maybe I have the wrong expectations when it comes to their responsibilities. Their communication is also condescending and sarcastic, which is offensive and unprofessional, but you really can't contract "behavior" easily. I don't need to see anyone's salaries or other confidential information. I'd just like clarity on the duties I'm paying them to perform.

Thanks, Melissa, for clarifying the relationship. Although the Board is sub-contracting with the Management Company--just like they do with landscapers or other vendors--part of the dues that HOA members pay go to the MC. In that sense, I'm helping pay for their services. I would like to understand what those services are before I raise concerns that might be outside the scope of the contract.

We are a small community, so going through the process of hiring a different Management Company would be costly and painful.

RCW 64.38.045 does state that all records of the Association shall be available for examination:

"All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent. "

Additionally, RCW 24.03.135, applicable if the Association is incorporated as a nonprofit (most are but check to be sure), specifies that corporate records shall be open for inspection by the member.

My suggestion would be to make a simple request in writing requesting to review/inspect the contract citing the appropriate sections of your governing documents and State statutes. You may even want to identify why you want to review the records. Send this to each Board member and the MC. Then see what the written response is.

Something along the lines of,

Dear Sir,

In accordance with Article xxx of [name of document], RCW 64.38.045 and RCW 23.03.135, I am requesting to review the records of the Association. Specifically, the contract between the MC and the Association in order to gain a better understanding of what duties or tasks have been delegated via contract to be performed by the MC.

I can be reached at


You are not entitled to a copy of the contract. You are entitled to examine the contract. Examine, means to arrange a mutual time and physically go to the location the records are kept at and examine the contract.

Thanks for all the great information and suggestions. I want to give the Board and the MC a reasonable amount of time to respond to my email. If there's no response, I'll follow up with a certified letter and then allow time for that process. I'll post an update.

I wanted to give an update on my request for HOA records in case it's helpful to others. Here's what I did.

*Sent a request to our property management company to review the contract between our HOA and the management company. The person that was our "community manager" at the MC denied my request citing the contract was confidential. (Not true.)

*Sent my request to all Board members via email and copied the MC. No response after 2 weeks.

*Sent a letter to all Board members via certified mail, return receipt and copied the management company with the same request. I cited the appropriate Article in our By Laws and also cited two Washington state laws that address the right for members to review all HOA documents. Only two return receipts came back from Board members.

*Eight days later I received an email from the "new community manager" at our MC introducing himself and offering to send an electronic copy of the contract so I wouldn't have to take time off work to drive to their office an hour away. I thanked him and agreed.

*I received an electronic copy of the contract several days later. Success!

Thank you for all your suggestions and help.

Help. I requested a review of the new signed agreement with the management company. I am being told that the board has signed a non-disclosure agreement with the management company which prevents homeowners from reviewing or getting copies of the management company contract. According to Virginia state law, " contracts not currently in or under negotiation can be reviewed by homeowners". Anyone care to comment on this situation?

Can you direct me to that old post? Thanks.

Jack, she means you should start a new thread. Go here: https://www.hoatalk.com/HOADiscussionForum/tabid/55/view/topics/forumid/1/Default.aspx . Then on the left, click on "Add New Topic."

For now, I agree that Virginia statutes give you an absolute right to see contracts that are not "currently in or under negotiation," since they are a record of the association. The Board should not have made a deal with the management company about not disclosing the contract. You might have a "cause of action" against the board for making this side deal, meaning you could try to prevail in court against the board for violating Virginia statutes (and possibly the Declaration), using 55.1-1828. If you prevail and per the latter statute section, you would be awarded your attorney fees.

I would be less optimistic about trying to pit the statute section that provides you with the rights to see certain records against a contractual agreement that effectively says owners will not have this right, with the contract involving a third party (meaning the MC). I am not sure the statute section nullifies the MC's rights to have a non-disclosure term in the contract.

This is really messy. When something is this messy legally, your best option by far might be to run for and replace the current board. Even this is not a very good option and will involve a lot of work, with no guarantee you and others will win a majority of the board seats.

I will ponder this more.

Please start a new thread.

Our contract with the management company is on our website for all to see.

Jack, I read more. With regard to the non-disclosure provision in the MC contract, I now think the law is by far on your side. Here's something to consider sending to the board:

Dear Board of Directors,

Pursuant to Virginia Code statute section 55.1-1815, within the next five business days please provide a time when I may examine the contract between the Management Company and the Association. My proper purpose is to understand the duties and responsibilities of the Management Company.

This contract is neither in negotiation or under negotiation. It is a record of the association which I understand I have an absolute right to examine. I am aware that there is a "non-disclosure clause" in the contract. However this clause conflicts with the aforementioned statute section. It is my understanding that "Courts will not aid a party to enforce an agreement made in furtherance of objects forbidden by the statutes... " See Massie v. Dudley, 173 Va. 42, 3 S.E.2d 176 (Va. 1939). Obviously I am not an attorney, and more case law followed Massie. However I am pretty sure this fundamental principle, that contractual terms that violate statutes are not enforceable, remains valid.

Within five business days, please provide a time when I may examine the contract.

Sincerely,

[name
address
phone number
email addie]

Our MC contract says CONFIDENTIAL at the bottom. I read it and there is no clause that states its confidential, so I posted it to our HOA website.

Jack, I hope you keep reading this forum and see that owners being happy with the status quo has long posed a problem. Like where you are, that only a //few// owners object to a board violation has long been used as an (irrational) board rebuttal to those few who are objecting.

This line by former Supreme Court Justice Sandra Day O'Connor (in a First Amendment, Establishment Clause majority decision) recently came to my attention: “In America, we don’t count heads before enforcing the First Amendment." Likewise, I think Boards should resist counting heads before deciding whether 'it has a duty' to comply with, or enforce, a covenant or law. //Of course// boards have a duty to comply with covenants and statutes. It does not matter if only one person objects and the rest are fine with the violations. The covenants are a contract.

On the other hand, the burden on volunteer directors is mighty. They are paid not one cent. I urge aggrieved owners to try to recognize this; pick their battles; and yes, get on the board, so they can learn themselves how awful the job is.

If after receiving your letter, the board digs in and refuses to let you see the contract, then I think you are stuck with deciding how important this is to you and then, if desired, lawyering up.

our mgt company fees increased 15% last summer. along with everything else due to covid.

Thank you for the update.

I hope you read the recent posts at hoatalk reporting increases much greater than 5%, like Wendy's post above. To be fair, wouldn't you agree that the board's decision to limit the increase thusly turned out to be a good one?

How many years was the contract renewed for?

A 5% increase is a reasonable yearly increase for a property mangement contract. We just signed a new contract and that's what we had to agree to - tried to negotiate to 4 and then 4.5% but they wouldn't budge. In inflationary times, 5% might be a good deal.

Did you expect them to renegotiate the contract each year? It's easy to be a back seat driver. There may be other concessions that were made that made the 5% reasonable. By just looking at the contract you don't know the whole story.

How many years was the contract renewed for? New contract, one year

A 5% increase is a reasonable yearly increase for a property mangement contract. We just signed a new contract and that's what we had to agree to - tried to negotiate to 4 and then 4.5% but they wouldn't budge. In inflationary times, 5% might be a good deal. This is a reassuring statement. Thanks

Did you expect them to renegotiate the contract each year? Yes
It's easy to be a back seat driver. I did serve on the board in 2000
There may be other concessions that were made that made the 5% reasonable. Hopefully
By just looking at the contract you don't know the whole story. True.
Thanks again for your help.

Jack