Property Management Contracts

Many PM contracts allow for extra amounts for various expenses, are you sure your's doesn't?

It doesn't. I've read over it probably five times.

Ask for a copy of the invoices for the extra charges so you can see first hand what they are supposedly to cover. Then double check the contract to see if those items are covered in the monthly fee.

Dan

As others have noted, and you yourself stated you understand, your management company contract seems to contain fixed and variable charges except you note the variable charges (on site property management outside of what may be included in the fixed rate portion, maintenance personnel, postage, etc.) seem not to vary.

Tim suggests you ask to review the receipts, presumably for those charges for which the MC is to be reimbursed, but I'm not certain that will give you all the information you are seeking. I would ask to review the monthly invoices prepared by the MC which depict the MC contract rate, expenses to be reimbursed, and other charges such as mileage, additional Property Manager time for a project, or perhaps a fixed rate expense such a an additional site visit. The invoices should contain the fixed and variable amounts, and the account classification to which the expense is being charged.

The invoice should contain information such as this:

Monthly Contract $NNNN
Postage $NNN
Office Supplies $NNNN
or perhaps more detailed as in
10 Envelopes $NNN
5 Checks $NNN
Add'l Site Visit $NNN
Project Mgt Hours $NNN

Someone involved, the treasurer or property manager, should be able to provide you with a detailed explanation of the expenses you are questioning.

I have similar concern

I understand the schedule A fee schedule, but those are incidental costs.

we seem to be getting charged for services related to a property maintenance company that one of the owners of our PM owns.

We are not getting direct notifications from the PM off-site property manager about water leaks, and they go and engage the owners company or
in some cases other, but don't tell anyone.

the board is in the dark, until the AP report comes out and you see the fees.

when I told the Pm employee I wanted to speak to the owner, he became very upset.
he seems to be going out of his way to be difficult and stonewall us, threatening to charge extra hours.

The owner has been CCed on emails, and requested to call, but has not responded

is there no way to make a PM, or PM employee accountable?

also:

we have left 2 other PMs over the years, and we always get tens of thousand of dollars charged on the way out.

these fees are erroneous, but there seems to be little recourse at all.

How can this be fixed

I am on the board

9 buildings, not sure how that makes a difference.

boards are mostly the uninformed, and we have tried to be very diligent when moving to existing

to me diligence in board on anything is unusual.

they are mere home owners trying to do professional work as volunteers

not sure having a meeting with MC owner, or having board draft letter will make a difference.

Boards don't seem to have much recourse??

we don't pay the prior MC money!

they remove it from the account, and invoice phony charges to justify

this has already happened in the past with (2) prior companies.

charges taken from the account after the contract had expired!
they simply didn't turn over control of the bank account, and kept removing fees after we had terminated them!!

they all seem accountable to no one

we can leave the current one, but already they are uncooperative in daily business

If you have actual proof of this, then turn it over to the district attorney and ask that they investigate for embezzlement.

If you don't have actual proof, you shouldn't be saying, or posting, it.


This is why I firmly believe that a MC or PM should have zero access to deposited funds and should not have access to check books. Others disagree for various reasons. In my opinion, it's your money and you (the Association) should have full control of it.

If you don't agree, send me your paycheck and let me handle your finances for a fee.


MCs and PMs are accountable to the Board and to the terms of their contract.

The issues, in reality, are with your Board and not with the MC.
The way to fix that issue is to gather support along with members willing to serve and vote the bums out.

As others have said, vote in a new board. If absolutely everyone there is clueless then perhaps it's time to move out before the money disappears completely.

Well, we fundamentally disagree.

The MC works for the board by performing the day to day tasks the Board is responsable to have done.

The Board has a fiduciary requirement to the membership.
The MC has a fiduciary requirement to their stockholders (if any).
The MC also has a fiduciary requirement to the Board IF they have any access to the Association money.

The Board is supposed to oversee the and make sure that the terms of the MC contract are being complied with.

The membership is the checks and balance of the Board.


I'm sorry you consider yourself totally clueless.

If those who have the ability to serve but refuse to serve, then they allow those who are willing to serve to be the governing body of the Association and make the decisions that affect your home and community.

Gather support by education. It won't happen overnight. In fact, it took me three years to affect change within my Association (and I didn't have the issue you describe). But change can happen.


Then the Board should not pay until that information is provided and the Board concurs with the payment. Again, the Board is the issue here by not questioning and blindly approving (accepting that what you provide is correct).


Then the Board should be asking why are the fees being charged.
The membership should be asking the board (not the MC) in an effort to make the Board do their job.


then perhaps this is the terms of the contract the Board signed.
Keep in mind that what seems to be happening might not actually be happening. The Board might have approved these things when they signed the contract.


Providing an invoice and paying the invoice are two different things.
The Treasurer is responsible for paying valid invoices.
The Treasurer is also responsible to question those invoices they feel are invalid and bring this information to the Board.
If the Treasurer, with the Boards approval, has delegated the task of paying invoices that does not absolve the Treasurer of the responsibility of insuring the invoices are valid.
Since the Treasurer is appointed by the Board, then the Board is responsible to make sure the Treasurer is fulfilling their responsibilities and, if not, remove them from Office and appoint someone who will fulfill the responsibilities (perhaps you).

The Board agrees to the terms of a contract.
The Board awards contracts.
The Board appoints officers to oversee the contracts.
The Board is responsible to the membership to make sure the Officers are doing their job.
The Board may remove an Officer at their discretion.
The membership may remove a Director at their discretion.

Bottom Line, the Board is responsible for the affairs of the Association.
The Membership is responsible to elect those who will perform those duties.

If the members won't step up and serve, then those who will serve will be the one's elected.
Hence, the members have some blame here as well.

The old saying... "It's better to have people think you are stupid than open up and prove it" Samuel Clemens. If you think your MC is in charge of your HOA you have already have no clue what you are all doing. HOA hires the MC and directs them on what to do per a contract. You and your board is responsible for how much power/control you have given the MC. If you want to put the blame on anyone here it's your HOA not the MC. They are doing what the HOA allows them to do. Which sounds like everything and now you all want to complain? Too late. You all got yourselves into this mess.

said by person who is getting ripped off by their MC

If we wrote a book it would be called "HOA 101 NEVER Let your MC control everything". The follow up would be "How to take advice from people who are giving it". Your not seeking advice your seeking an agreement to your own opinion. If you were taking our advice you would not call anyone names or clueless. You would be asking what steps your HOA needs to take to resolve the issues with the MC.

Again as everyone here knows, the MC does NOT control the HOA. IF it does, the HOA is doing something wrong.

No you were not called clueless. You called everyone else here that. Tim said he is sorry you feel you are clueless but did not call you that. All the insults you stated. All is reflected back.

Now if you are willing to listen, I'd suggest you read Tim's advice again. He gives the best. Honestly, the information you have posted about the MC all points to the HOA Board not doing or knowing their job. No transition from firing a MC should result in such a loss of money unless the firing was not done correctly. Overall the contract with the MC is just mishandled on many levels at this point.

the contract was not mis handled

They took the money!!

The MC has access to the funds because the Board allows the MC to have access to the funds.
If you are on the Board and want to change that, then do so.

Make a motion that Association funds are held in a bank account of the Boards choosing and under the Boards control. If it passes, then the majority of the Board agrees with you and the change can happen. If it doesn't pass, then the majority of the Board is still allowing the MC to have access to the funds.

You do not have to be on the signature card at the bank to make deposits to an account.

As others have pointed out, I did not call you clueless.
If that was your impression, I apologize.
You are asking intelligent questions which, to me, indicates that you are not clueless.

The suggestion was to replace the Board to make changes.
Your response was:


That led me to post [emphasis added]:


As it appeared to me that you consider those currently serving on the Board are clueless (and you had stated you are serving on the Board).

Again, I was not calling you clueless, I had the impression you were calling yourself clueless and based on questions you are asking, you most certainly are not.