Property Management Co Switch/Tax Debacle (CA)

Our HOA switched management companies at the beginning of 2017. The old company was terminated as of January 31st, while the new company began on January 1st, so we could have a month of transition time. This was arranged by the previous board, who all resigned prior to the switch. I am the president of the board that took over.

Despite having TWO property management companies in January, I have just learned that no 1099 forms were filed for our vendors. It seemed quite obvious to me that the old company should have closed out their tax year and filed the forms since we were paying them in full for that entire month, but they deny all responsibility, saying that, per the termination agreement, management was turned over to the new company on January 1st, and that they had given them all of the financial info by then. The reality as I understand it was that the old company turned over boxes and boxes of files...none of it was digital...and that it took the entire month of January to get all of it. The old management company was uncooperative throughout the process and were generally horrible to deal with the entire time I have lived here. I feel that this was done entirely on purpose, despite the fact that they admit they were supposed to be "working together" with the new management company during that transition month.

Has anyone experienced a similar situation? Is there any recourse we can take with such an issue?

The ultimate responsibility for issuing 1099's rests with your association and you have already terminated the vendor who let you down. You have no further recourse.

I am not much of a tax person but my understanding is that there is no duty to file a 1099 and no penalty for not doing so.

The link below is the penalty rates and dates.

https://www.irs.gov/government-entities/federal-state-local-governments/increase-in-information-return-penalties-2