HOA Manager Overreach?

AugustinD
Posts: 5,144

Posted:

My condo HOA elected me to its board this past Saturday at the annual meeting of members (AMOM). Over 50%(!) of the members voted. The board has three directors, consistent with the Bylaws. I am seeking a reality check as follows. Please respond to any or all of the following as interested.

1.
The names of the top-three vote getters were announced at the end of this annual meeting. The percentages of the ballots that each candidate received were not announced. After the AMOM I contacted the Election Inspector by email, cc'ing the other two directors. I asked him to provide the vote percentages achieved by each candidate. I never heard back from him. In the past, the Election Inspector has responded promptly to member queries about the process, as contracted by the board. Is this a red flag for the HOA having established a strict policy that vendors do not answer to directors ever?

2.
The three directors agreed to meet on Monday for its organizational meeting (pursuant to the Bylaws). There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents. At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager?

3.
From the HOA's Bylaws: "The Board may delegate to one of its members the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, which might arise between meetings of the Board." The manager's "memorandum" states that this means the Board may elect a "Board Liaison to the Manager." The manager states that this means board members may ask questions of the manager only through the Board Liaison. I quickly learned this means all questions, no ifs, ands or buts. Is this a red flag for overreach by the HOA manager?

4.
The new president (my co-candidate) wishes to continue the established practice of including the HOA manager in like 99.9% of all email discussions. I have asked a few questions, as has my co-candidate. The manager took a few days to respond, stating that, due to all the emails, he prefers to wait a few days, process all the email back-and-forth, and then respond. Does your HOA do anything like this? If so, what is the general nature of the boundaries you set?

5.
On Wednesday, the manager addressed questions about a current legal dispute between a member and the HOA. The manager stated: "Due to the member having legal representation, we should not [cannot] make any internal decisions or external discussions." He clarified that he meant the board had to use the HOA attorney to settle this matter. Is this a red flag for overreach by the HOA manager?

6.
I feel like the HOA manager is being recognized and treated as the unofficial fourth board member and a co-President of the Board, with the manager being given rather extensive policy making powers. I feel like the HOA manager expects me to treat his 20-page "memorandum" as though it were a governing document. Would you feel similarly? If you wish to elaborate with how you would respond in the coming days and weeks to this situation, please feel free.

7.
I feel like the members voted for change. Since I received the most votes, with my co-candidate not far behind, as an ethical matter I think maybe the change has started, but now I need to follow through. I have a good idea of how to proceed but desire a reality check. I served on another HOA's board a few years ago and draw from the latter experience often. This is the third HOA of which I have been a member.

I am not in California.

NigelB (Texas)
Posts: 254

Posted:

Quote:

Posted By AugustinD on 02/02/2017 4:18 AM
My condo HOA elected me to its board this past Saturday at the annual meeting of members (AMOM). Over 50%(!) of the members voted. The board has three directors, consistent with the Bylaws. I am seeking a reality check as follows. Please respond to any or all of the following as interested.

1.
The names of the top-three vote getters were announced at the end of this annual meeting. The percentages of the ballots that each candidate received were not announced. After the AMOM I contacted the Election Inspector by email, cc'ing the other two directors. I asked him to provide the vote percentages achieved by each candidate. I never heard back from him. In the past, the Election Inspector has responded promptly to member queries about the process, as contracted by the board. Is this a red flag for the HOA having established a strict policy that vendors do not answer to directors ever?

2.
The three directors agreed to meet on Monday for its organizational meeting (pursuant to the Bylaws). There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents. At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager?

3.
From the HOA's Bylaws: "The Board may delegate to one of its members the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, which might arise between meetings of the Board." The manager's "memorandum" states that this means the Board may elect a "Board Liaison to the Manager." The manager states that this means board members may ask questions of the manager only through the Board Liaison. I quickly learned this means all questions, no ifs, ands or buts. Is this a red flag for overreach by the HOA manager?

4.
The new president (my co-candidate) wishes to continue the established practice of including the HOA manager in like 99.9% of all email discussions. I have asked a few questions, as has my co-candidate. The manager took a few days to respond, stating that, due to all the emails, he prefers to wait a few days, process all the email back-and-forth, and then respond. Does your HOA do anything like this? If so, what is the general nature of the boundaries you set?

5.
On Wednesday, the manager addressed questions about a current legal dispute between a member and the HOA. The manager stated: "Due to the member having legal representation, we should not [cannot] make any internal decisions or external discussions." He clarified that he meant the board had to use the HOA attorney to settle this matter. Is this a red flag for overreach by the HOA manager?

6.
I feel like the HOA manager is being recognized and treated as the unofficial fourth board member and a co-President of the Board, with the manager being given rather extensive policy making powers. I feel like the HOA manager expects me to treat his 20-page "memorandum" as though it were a governing document. Would you feel similarly? If you wish to elaborate with how you would respond in the coming days and weeks to this situation, please feel free.

7.
I feel like the members voted for change. Since I received the most votes, with my co-candidate not far behind, as an ethical matter I think maybe the change has started, but now I need to follow through. I have a good idea of how to proceed but desire a reality check. I served on another HOA's board a few years ago and draw from the latter experience often. This is the third HOA of which I have been a member.

I am not in California.

1. The vendor works for the board and not the Managing agent - the vendor should be responding to the board if questions are asked
2. Not sure about this - a lot of times managers will provide new board members with information they need to fulfill their responsibilities. I actually put together a binder that includes all relevant governing documents, information about contracts, etc for board members. I'm not sure why the percentage of votes is relevant anyway
3. It says the board "may" delegate not shall delegate. So it is entirely up to the board if it wanted to put this provision into action. It might be designed to centralize things and not have the manager have to respond to multiple requests
4. This is probably a problem with a lot of management companies. Our community manager handles a number of communities so if we ask something it might take a couple of days to get an answer.
5. That decision rests entirely with the board and not the managing agent. Just because a member has engaged the services of an attorney it doesn't mean that the board cannot settle the matter themselves.
6. You as a board member are only required to perform those duties your governing documents require, perhaps the contract with the manager provides more insight, but ultimately the manager is an employee of the board and can only exercise the authority the board cedes to the manager. Our policy is that our management company's job is to collect our assessments and pay our bills, any decisions that affect contracts, our members, debt collections, or ACC matters rest with the board.
7. If you and your newly elected compatriot are like minded, then on a three person board you have the majority vote and can put those practices you desire into effect. This includes reviewing and putting out for bid the management contract currently in place.

In summary - the directors run the HOA, not the management company

KerryL1 (California)
Posts: 14,550

Posted:

Congratulations, Augustin!

For now, I only have time for #3, which also is in our contract with our MC. But we have 7 directors. Still IF all 7 constantly interacted with & emailed the PM, it would be very burdensome for her. Ours is "shall" not may. We have the same clause in our retainer with our HOA attorney. But Most directors feel that they can contact our PM. We may not individually instruct or direct her, which we actually just clarified at a board meeting earlier this week.

We directors may not contact or direct any vendors or their employees, e.g., the landscapers, custodians, etc (high rise).

In CA, the law requires that the vote tally of all candidates be announced at the election and posted in a public place within x days of the election. Also must be placed in the next month's regular board meeting minutes. Check the law in your state.

Overall, at first read, I would say your mgr. is not overreaching. Is/he full time on your premises?

I'll look at your email again later today. Meantime, make sure you know every nuance of your contact with the MC.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By AugustinD on 02/02/2017 4:18 AM
My condo HOA elected me to its board this past Saturday at the annual meeting of members (AMOM). Over 50%(!) of the members voted. The board has three directors, consistent with the Bylaws. I am seeking a reality check as follows. Please respond to any or all of the following as interested.

1.
The names of the top-three vote getters were announced at the end of this annual meeting. The percentages of the ballots that each candidate received were not announced. After the AMOM I contacted the Election Inspector by email, cc'ing the other two directors. I asked him to provide the vote percentages achieved by each candidate. I never heard back from him. In the past, the Election Inspector has responded promptly to member queries about the process, as contracted by the board. Is this a red flag for the HOA having established a strict policy that vendors do not answer to directors ever? This question seems to potentially be two ... 1) Usually after election the winners and number or percentage of votes is announced to all members. 2) I do not see any red flag ... vendors generally answer to one person to avoid confusion of having too many chiefs. If you have a Property Manager, generally they will oversee the vendors and report to the BOD who hired that manager. The BOD does have ultimate responsibility for all employees and vendors. If there is an issue with a vendor the Manager and BOD Members can schedule a meeting with said vendor.

2.
The three directors agreed to meet on Monday for its organizational meeting (pursuant to the Bylaws). There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents. At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager? I do not see overreach ... If BOD thinks anything is misinterpreted, they should discuss and insure is fixed for future. Again, BOD has ultimate responsibility and the Manager is the BOD's employee.

3.
From the HOA's Bylaws: "The Board may delegate to one of its members the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, which might arise between meetings of the Board." The manager's "memorandum" states that this means the Board may elect a "Board Liaison to the Manager." The manager states that this means board members may ask questions of the manager only through the Board Liaison. I quickly learned this means all questions, no ifs, ands or buts. Is this a red flag for overreach by the HOA manager? No ... this is similar as above where vendors are answering to the Manager. You do not want your Manager to have one BOD member tell them to do one thing then another tell them the opposite. It is better if BOD makes decisions and one individual relay to the Manager. That person can relay questions and bring responses back to the BOD.

4.
The new president (my co-candidate) wishes to continue the established practice of including the HOA manager in like 99.9% of all email discussions. I have asked a few questions, as has my co-candidate. The manager took a few days to respond, stating that, due to all the emails, he prefers to wait a few days, process all the email back-and-forth, and then respond. Does your HOA do anything like this? If so, what is the general nature of the boundaries you set? This answer would be similar to your #3 above and why it can be confusing when a Manager receives many different emails from many different individuals.

5.
On Wednesday, the manager addressed questions about a current legal dispute between a member and the HOA. The manager stated: "Due to the member having legal representation, we should not [cannot] make any internal decisions or external discussions." He clarified that he meant the board had to use the HOA attorney to settle this matter. Is this a red flag for overreach by the HOA manager? No ... If you are in a legal dispute do not discuss except in meetings with your attorney. You do not want anything of confidential nature to end up out and harm any legal case.

6.
I feel like the HOA manager is being recognized and treated as the unofficial fourth board member and a co-President of the Board, with the manager being given rather extensive policy making powers. I feel like the HOA manager expects me to treat his 20-page "memorandum" as though it were a governing document. Would you feel similarly? If you wish to elaborate with how you would respond in the coming days and weeks to this situation, please feel free. His memorandum is not a governing document and I would not treat it as such. Because the Manager ends up with new supervisors each year is only trying to potentially make it easier for any newbies to understand. Again, the Manager is an employee of the BOD and will only have any extensive powers that the BOD designates.

7.
I feel like the members voted for change. Since I received the most votes, with my co-candidate not far behind, as an ethical matter I think maybe the change has started, but now I need to follow through. I have a good idea of how to proceed but desire a reality check. I served on another HOA's board a few years ago and draw from the latter experience often. This is the third HOA of which I have been a member.

I am not in California. What state are you located?

SheliaH (Indiana)
Posts: 6,964

Posted:

Personally, I wouldn’t worry about the voting percentage unless there weren’t enough people to make quorum according to your documents (and therefore the election couldn’t be held). Otherwise, you’re on the board now – clearly you got enough votes to put you there. For me, hard numbers are more impressive -– how many cast a ballot and how many votes were received by each candidate? Were any ballots tossed –how many and if so, why? I understand marking a vote invalid because the homeowner wasn’t eligible due to delinquent assessments, but you should make sure no one was unfairly denied a chance to vote.

By the way, why is your manager serving as election inspector – shouldn’t that be a job for homeowners who’ve been appointed by the board for this purpose?

I seem to recall you and some (most?) of the homeowners in your community have had various issues with the property manager – all of these questions seem to indicate there’s still some bad blood out there. Now that you’re on the board, this may be a good time for you and your colleagues to sit down with the property manager to do a reset of sorts – discuss expectations on things like communications with vendors, how soon should a homeowner or board member should receive a response, etc.

Most important, remind everyone of his/her role – it’s ok for the manager to suggest options for the board, but in the end, he/she should remember he/she IS NOT a board member, and when the board takes a vote for the property manager to do something, he/she should comply. The exception would be if the request is clearly illegal or conflict of the association’s governing document – in that case, the situation may have to be addressed with the property manager’s upper management (if appropriate).

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By AugustinD on 02/02/2017 4:18 AM
1.
The names of the top-three vote getters were announced at the end of this annual meeting. The percentages of the ballots that each candidate received were not announced. After the AMOM I contacted the Election Inspector by email, cc'ing the other two directors. I asked him to provide the vote percentages achieved by each candidate. I never heard back from him. In the past, the Election Inspector has responded promptly to member queries about the process, as contracted by the board. Is this a red flag for the HOA having established a strict policy that vendors do not answer to directors ever?

From the context of your post, it appears that your management company (MC) is trying to run your association. If so, the MC may have told the election inspector to ignore your inquiries. I would fire both their uppity butts.

Quote:

2.
The three directors agreed to meet on Monday for its organizational meeting (pursuant to the Bylaws). There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents. At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager?

The MC is going to present your governing documents in the light most favorable to themselves. You and the other board members are capable of reading your governing documents for yourselves. Ditto for state corporate law and general corporate educational material. The board should be lecturing to the MC. Tell this MC to take a hike with his 20-page bound memo.

Quote:

3.
From the HOA's Bylaws: "The Board may delegate to one of its members the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, which might arise between meetings of the Board." The manager's "memorandum" states that this means the Board may elect a "Board Liaison to the Manager." The manager states that this means board members may ask questions of the manager only through the Board Liaison. I quickly learned this means all questions, no ifs, ands or buts. Is this a red flag for overreach by the HOA manager?

Yes, this is over-reach. This MC is way too comfortable telling your board what to do. The MC is an Indian, not a chief. Fire him/her.

Quote:

4.
The new president (my co-candidate) wishes to continue the established practice of including the HOA manager in like 99.9% of all email discussions. I have asked a few questions, as has my co-candidate. The manager took a few days to respond, stating that, due to all the emails, he prefers to wait a few days, process all the email back-and-forth, and then respond. Does your HOA do anything like this? If so, what is the general nature of the boundaries you set?

Quote:

5.
On Wednesday, the manager addressed questions about a current legal dispute between a member and the HOA. The manager stated: "Due to the member having legal representation, we should not [cannot] make any internal decisions or external discussions." He clarified that he meant the board had to use the HOA attorney to settle this matter. Is this a red flag for overreach by the HOA manager?

For once, the MC is on firm ground. Both parties are represented by counsel. In my state you would potentially face court sanctions by interfering with the attorneys. You do have the option of dismissing your attorney and handling this matter yourselves but it does not sound like a good idea at this point.

Quote:

6.
I feel like the HOA manager is being recognized and treated as the unofficial fourth board member and a co-President of the Board, with the manager being given rather extensive policy making powers. I feel like the HOA manager expects me to treat his 20-page "memorandum" as though it were a governing document. Would you feel similarly? If you wish to elaborate with how you would respond in the coming days and weeks to this situation, please feel free.

It sounds like he has overstepped his bounds. He should be treated as an employee, not as an equal, and definitely not as the boss.

Quote:

7.
I feel like the members voted for change. Since I received the most votes, with my co-candidate not far behind, as an ethical matter I think maybe the change has started, but now I need to follow through. I have a good idea of how to proceed but desire a reality check. I served on another HOA's board a few years ago and draw from the latter experience often. This is the third HOA of which I have been a member.

Your MC is trying to control your board the same as he controlled previous boards. He is not a member and he was not elected. The change you and those who voted for you seek is not likely to happen with this MC calling the shots. I would not hesitate for a moment to give him his notice that his services are no longer needed.

KerryL1 (California)
Posts: 14,550

Posted:

#1 Our contract with our MC does indeed sate w no individual director may contact any of our vendors. I think it's very common to prevent has harassment and also confusion, if, say, our custodians get orders from a director that conflict with the PM.

#2. If you feel your PM is misinterpreting some of your governing docs, set up a meeting with her/him and the two of you discuss it. This is important.

Otherwise, we also get about 7 page hand out from our PM at our organizational meeting with board responsibilities set out an the Business Judgement Rule in CA and a few other items. We also have a Leadership Seminar every year with the MC & their accountant where they give an overview of our budgets. It's pretty good meeting and the binder contains probably 20 pages of materials, some useful some not. But They & we all know that the Board sets policy in (here in CA) open meetings.

#3, the PM (or MC?) is using a strict interpretation of your bylaws. If you wish, your board certainly can vote to have each of you interact with her/him. IF your contract says it must only be one then you may want a different MC.

#4. How can you send the PM emails if you may not individually ask her questions? Anyway, in CA it'd be suspicious if all directors would discuss anything about HOA biz online as it violates the open mtg. act here. Taking a few days to respond may very well have something to do with the PM's workload. But our PM does tend to reply to emails very quickly. I just wouldn't judge yours on that activity.

6. Not sure your "feelings" are accurate. Please give us an example of a policy the PM seems to have set.

In general I agree with Janet that this PM does not seem to be overstepping. I tend not to agree with Larry and am not sure he's been on an HOA board that has a PM.

Again is your PM on your premises full-time? What size is your HOA. Is it condos?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our HOA depends quite a bit on our PM and as long as one is comfortable and keeps an eye on them, I see nothing wrong with this. Repeat, I said keep an eye on them.

RichardP13 (California)
Posts: 3,868

Posted:

I will give a perspective from the management side.

Most management contracts/agreements are boilerplate much like many governing documents. While agreements may contain certain language outlining how management interacts with a Board and vendors, none should be set in stone. Since Boards are the ones that are supposed to ultimately run their associations, there should be a point person to contact the PM or vendor. Again all Boards are different in how they take the responsibilities and roles.

As organizational meeting should be open to the members, so this was probably an orientation meeting. I commend the PM for having something prepared to hand out. Based on what I know of Florida, Boards are suppose to have some training and PM's can't practice law.

As a MC I would like to be copied on communications effecting the association wherever possible so I can communicate with vendors and members when appropriate.

Sometimes I wonder if people really know what a MC is supposed to do. Most times a MC is hired because the people that make up then Board are unwilling or unable to run their association properly. I trend the phone calls at 3 in the morning during a rainstorm and you handle 15 condos or townhome communities.

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By AugustinD . . . 2. There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents.

At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager ? . . .

AugustinD:
1-Over-reached or not, if the presentation materially mistakes your state's law and/or the governance documents, there's some serious red flags. Straying from providing prudent management advice into dubious renderings of law, may be something for the Board & the manager to possibly get reminded by the association's legal counsel.

2 - Like LarryB13 I presume the manager pre-empted the direct reply but defendibly made sure the whole Board got the results. Maybe not worth concern at this point.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By BobD4 on 02/02/2017 9:51 PM

Posted By AugustinD . . . 2. There the HOA manager sat us down and presented us with a 20-page, single spaced bound "memorandum" from him. The manager uses this binder for new boards every year. The manager's memorandum purports to give an overview of the responsibilities of the directors. It cites the governing documents often, but I think often misinterprets the governing documents.

At the end of the "memorandum" were the election results, breaking down what percentage of the vote each candidate received. Is this a red flag for overreach by the HOA manager ? . . .

AugustinD:
1-Over-reached or not, if the presentation materially mistakes your state's law and/or the governance documents, there's some serious red flags. Straying from providing prudent management advice into dubious renderings of law, may be something for the Board & the manager to possibly get reminded by the association's legal counsel.

2 - Like LarryB13 I presume the manager pre-empted the direct reply but defendibly made sure the whole Board got the results. Maybe not worth concern at this point.

EVEN attorneys misrepresent governing documents!

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By RichardP13 EVEN attorneys misrepresent governing documents!

Absolutely true. And it's not hard to find judges themselves mugged by condo or HOA law. At least attorneys are insured & subject to whatever minimal professional self-discipline.

In the manager's defence, at least an effort has been made out of a possibly murderously heavy work schedule, to help the client's Board transition smoothly. Augustin of course was there personally and had been observing before election . .

AugustinD
Posts: 5,144

Posted:

Thank you for the reality check, NigelB, KerryL1, JanetB2, SheliaH, LarryB13, Bobd4, JohnC46 and RichardP13.

Q1: 3 to 2, roughly, for not overreaching vs. overreaching

Q2: 5 to 0, roughly, in favor of an impartial binder from management for transition.

Q3: 3 to 1, roughly, supporting a manager liaisoning with only one board member

Q4: 3 to 0, roughly, supporting a manager responding to all board inquiries a few days later, en masse.

Q5: 2 to 1, roughly, supporting the manager's argument

Q6 and Q7: Roughly unanimous to stay vigilant as a director for manager conduct that seems inappropriate; bear in mind the manager is the HOA employee and the board is responsible for setting the terms of his contract and changing these after the contract expires and so on. One vote whose impression from what I wrote is that this manager probably needs to go.

JanetB2, to be honest, I feel like the previous board promoted physical violence and violent threats towards certain members it felt were making too many requests. One of the previous board members was re-elected (with the least amount of votes). I find the previous board manager mentally disturbed. This previous board member was tight with the manager. My take is they remain thick as thieves (though I doubt they are stealing anything). The two of them are loud and controlling. I suppose the new President (my co-candidate) is not that strong or wants to let things evolve some or similar. But for this reason, I am still not ready to share in what state I live. I know it helps here to know the state and appreciate when people share their state. Blah blah. Everyone here has heard it before, and what I am experiencing is par for the course.

This whole exchange helped a lot. Thank you everyone again for taking time to share your impressions.