Property Manager - Legal/Ethical?

The property manager is a sub-contractor to the HOA. They are in the business of Property management. Managing rental property is a service they offer to customers. I don't see a conflict of interest here. Just see the Property Management company do what company management companies do.

I can see your concern, Rose, and for the reason Sheila mentions, i.e., if the Owner of a condo your PM personally manages gets in trouble with dues payments or gets fined for rules violations. Assuming the PM does attend meetings where decisions are made about these kinds of problem Owners, the PM should be asked to leave the executive session when there are discussions about Owners discipline of units that the PM manages.

In our condo high rise of 200+ units the PM actually writes the violation letters to owners and invites them to disciplinary hearings. She also send the board final decision to these Owners. How would that work?

I'd also read the contract your HOA has with the Management Co.(MC) It probably says that the HOA as a whole is "the client." The PM has a fiduciary duty to the HOA only, not to any individual owners. So there could be an issue of divided loyalties.

Is there anything in the contract about managing individual condos?? I doubt it. I would not want our PM to manage individual condos as I also would worry those Owners would get special favors from the PM that other Owners don't receive.

We've had 4 MCs here over 15 years and none of them also managed individual condos. I don't think it's typical, but it's probably not "illegal." Might be unethical.

I don't see how the PM, though, could be "double dipping." The assessment you all pay don't go to the PM, they go to pay the bills. And the PM gets a wage or salary--it's one of those bills. The financial arrangement to manage individual condos is entirely different.

(Melissa's HOAs didn't/don't have PMs as I recall)

RoseF: In between retirements I managed for a large condo management company which concurrently at some sites conducted "rental pools" for segments of investors, with full knowledge by both sets of clients.

Those relationships to the condo corporation & investors alike, were arms-length corporate cliencies, NOT some form of workplace personal employment. In theory the concurrent cliency model might reduce sloppy tenanting & oversight. S ometimes it can work well for years.

But no matter how much declare/disclose/abstain, many communities can become warzones between occupant owners & non-residents whether or not such are solely investment driven. For example, how easily can one reconcile 'single family use' with dorm operations & today's AirBnb etc short term inn-keeping/hotel-like operations ? Investors have often viewed reserve funding with a far shorter horizon than the BoD & occupant owners.

Aside from the issue of concurrently serving clients with divurgent interests, there can be complications if the BoD wants to turf that dual cliency PMC out the door . . .

So, Rose, you can see that most of us see potential problems associated with your PM also managing individual rental properties at your HOA.

Are you on the Board? if not, I'd write to the Board summarizing the responses here into a couple of potential issues and ask the Board to instruct the PM to terminate his rental property mgmt. business. If he refuses, I'd ask the Board to vote to fire him

It's a good idea to be open-minded that some of these "wearing multiple hats' arrangements can work out.

And that sometimes they HAVE TO work out properly, as with urban hybrid condo-hotel complexes.

Maybe its better to have competent upfront tenant selection for example, than leaving it to a dog's breakfast of DIY'ers, sloppy realtors or Russian roulette. ( A rental pool operation may be legally unable to force every one of the investor units to participate, although it may not be uncommon by a Rule etc to try to force participation. )

Are you on the board, Rose?

Since you're on the board, Rose, why not discuss this tenuous personnel issue in executive session with your board colleagues. Would they be willing? How many directors are on your Board?

As treasurer you need to be albe to have open & frequent communications with your PM. would it help if the president interceded?