HOA Property Management Company has Bad Credit

Started by ThomasM20 • 3 replies • 645 views

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ThomasM20 (California)
Posts: 2

Posted:

Our HOA President has hired a new Property Management company and has refused to release information on how this company was selected. (Bid Process?) I believe the owner of the Property management company and our HOA President are friends. The president put the property management company in charge of ALL of our bank accounts ($700,000). A background and credit check was never performed on said company or it's owner. It has come to my attention that the Property Management company owner whom is friends with our President has had a spotty financial past (bankruptcies Chapter 7). How exactly should this be handled? I feel I have to let someone on the board of directors know. If I don't and something happens to our funds, I would feel responsible for not coming forward. This is Public Information after all. Any help would be much appreciated. Thank You in advance.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Thomas,

Welcome to the forum.

Keep in mind that the President might sign the contract but who the contract is awarded to is a board decision. Therefore, if you want to know the process involved, you might try asking them.

Since you are not on the Board, the best you can do is inform the Board of your findings.
This can be done by attending the meeting and telling them yourself or via written communication. If you choose to use written communication, I would recommend sending a copy to each director.

Regardless of how you inform the board simply state the facts and let the facts speak for themselves.
Leave out who you think is friends with whom.

Something along the lines of:

It has come to my attention that our current MC has had financial issues that the board may or may not have been aware of. Then simply list what you have found along with the actual source where the information was obtained.

KerryL1 (California)
Posts: 14,550

Posted:

Tim offers good advice, Thomas. Show your evidence in writing and send to to each director. Say nothing about the alleged friendship.

There is, btw, no requirement in CA that Owners can know the "process" by which a vendor is hired. Often directors interview them in executive session, which is permissible for "contracts in formation" in CA.

How do you know the president gave the MC access to all your funds? How do you know no background check was conducted?

Normally it is the Board, NOT the prez that determines the terms of the contract. You need to read the contract, which is every Owner's right in CA--make your request in writing to the MC. You should expect it in 10 days.

ThomasM20 (California)
Posts: 2

Posted:

Thank you for taking the time to reply, sounds like good advice....will proceed as advised. Thank you Tim and Kerry

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