HOA mgt company not producing financial reports

ThomasO5 (Texas)
Posts: 38

Posted:

In Texas: Who is the licensing authority for HOA management companies? Is that where I would file a complaint if the management company for our HOA fails to produce monthly financial reports for our Board of Directors? Is there a specific Texas State Law that requires monthly financial reports be made available to Board of Director members?

KerryL1 (California)
Posts: 14,550

Posted:

Are you on the Board, Thomas?

whether you are or not, the board should direct the MC to send you the docs that TX allows. Has the board tried this?

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By ThomasO5 on 10/17/2018 8:06 AM
In Texas: Who is the licensing authority for HOA management companies? Is that where I would file a complaint if the management company for our HOA fails to produce monthly financial reports for our Board of Directors? Is there a specific Texas State Law that requires monthly financial reports be made available to Board of Director members?

OK so there is a law that the board must allow members to see the financials, but not regarding the MC company. The board contracts with the MC to do certain tasks. If one of their tasks is this, they aren't doing what they were hired to do.

BillH10 (Texas)
Posts: 1,217

Posted:

Thomas

There is no state agency which provides oversight or ombudsman services regarding HOAs or Condo associations in Texas.

Production of monthly financial reports is a subject your Board should take up with the management company. Be aware the contract may not call for the production of monthly reports, especially for smaller associations with, for example, other than monthly assessment payments and a few common expenses which are paid through an auto debit process.

We have a client with six units, the monthly bills consist of water, landscaping contract, management contract, and the insurance policies. We produce a financial report each quarter and ad hoc reports if and when requested. Any expenditures over $10.00 outside of the standard monthly charges are approved in advance by the Board.

BillH10 (Texas)
Posts: 1,217

Posted:

Thomas, after reading the other replies, I should add you as an owner have an absolute right to review the association financial information. However, that does not extend to creating special or ad hoc reports.

If reports are created other than monthly, that is what must be shared with you but the association is not required to create a monthly report because you would like to see one. If the contract with the management company specifies monthly reports are to be created, that is a subject your Board must take up with the management company.

ThomasO5 (Texas)
Posts: 38

Posted:

Yes, I'm on the board of directors. I'm the President, in fact. We have 218 single family homes in our subdivision, so these are not condominiums if that makes a difference.

To clarify: We've had a new management company on contract since June 1, 2018. There is now only a "September draft" financial report at the company's website portal which board members can access. There were previously June and July reports, but not consistent in content. Now those reports have been taken down. There was also a "draft August" report but that has also been recently taken down.

The reports that were temporarily posted contained the typical Assets/Liabilities and Expenses accounting sheets, but there is no detail with homeowner payment transactions, assessments owed data or vendor payment transactions.

I have most definitely pointed this out many times to our community manager, an employee of the company and he seems to understand and says he is also frustrated with the accounting department.

I've also written several emails to the company owner but received no response.

What can I do next?

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By ThomasO5 on 10/17/2018 9:08 AM
Yes, I'm on the board of directors. I'm the President, in fact. We have 218 single family homes in our subdivision, so these are not condominiums if that makes a difference.

To clarify: We've had a new management company on contract since June 1, 2018. There is now only a "September draft" financial report at the company's website portal which board members can access. There were previously June and July reports, but not consistent in content. Now those reports have been taken down. There was also a "draft August" report but that has also been recently taken down.

The reports that were temporarily posted contained the typical Assets/Liabilities and Expenses accounting sheets, but there is no detail with homeowner payment transactions, assessments owed data or vendor payment transactions.

I have most definitely pointed this out many times to our community manager, an employee of the company and he seems to understand and says he is also frustrated with the accounting department.

I've also written several emails to the company owner but received no response.

What can I do next?

First, review your contract. What does it say about what reports will be generated and on what schedule?

If the contract calls for reports that are not being generated, or are not being generated on the time frame specified, CALL the company owner and request a meeting to explain why the reports are not being done and when the problem will be fixed. Don't just keep emailing into the void, call. If the owner doesn't take your call, send a certified letter. And start shopping for a new management company.

ThomasO5 (Texas)
Posts: 38

Posted:

Quote:

Posted By BarbaraT1 on 10/17/2018 9:18 AM

Posted By ThomasO5 on 10/17/2018 9:08 AM
Yes, I'm on the board of directors. I'm the President, in fact. We have 218 single family homes in our subdivision, so these are not condominiums if that makes a difference.

To clarify: We've had a new management company on contract since June 1, 2018. There is now only a "September draft" financial report at the company's website portal which board members can access. There were previously June and July reports, but not consistent in content. Now those reports have been taken down. There was also a "draft August" report but that has also been recently taken down.

The reports that were temporarily posted contained the typical Assets/Liabilities and Expenses accounting sheets, but there is no detail with homeowner payment transactions, assessments owed data or vendor payment transactions.

I have most definitely pointed this out many times to our community manager, an employee of the company and he seems to understand and says he is also frustrated with the accounting department.

I've also written several emails to the company owner but received no response.

What can I do next?

First, review your contract. What does it say about what reports will be generated and on what schedule?

If the contract calls for reports that are not being generated or are not being generated on the time frame specified, CALL the company owner and request a meeting to explain why the reports are not being done and when the problem will be fixed. Don't just keep emailing into the void, call. If the owner doesn't take your call, send a certified letter. And start shopping for a new management company.

The requirement to provide monthly reports is most definitely in our contract. I should have said this at the start.

Monthly report requirement:

"Said monthly financial reporting shall include most current: a) statements of balance in operating account(s) and reserve accounts; b) copies of actual statements issued by institution(s) holding said accounts; c) itemized report on all delinquent accounts and disposition of same; d) current financial reporting on the Association's receivables, disbursements, net cash gain or loss, and cash on hand; e) a comparison of monthly actuals with Association approved phased build-out budget and Annual Budget. In addition, the Agent shall present all such receipts, invoices and billing statements related to Association expenses when presenting drafts for Board members’ signatures."

I'll follow your suggestion to request a meeting in person, @BarbaraT1 If they don't respond sounds like it will be time to shop for a new management company.

RoyalpitA
Posts: 195

Posted:

..... If they don't respond sounds like it will be time to shop for a new management company.

D'OH

KerryL1 (California)
Posts: 14,550

Posted:

I agree with Barbara, but imo the letter should go to the MC form the whole board. You may be the liaison with the MC, but I believe a strong demand format he entire board will carry more weight. One reason is that if the its decided to terminate this vendor, the whole board should vote on it. I don't think you alone, Thomas, have that authority.

BillH10 (Texas)
Posts: 1,217

Posted:

Thomas, I wish I had known you were on the Board when I responded previously as I would have answered somewhat differently.

I echo what the others have said about a telephone call to set a meeting. Don't agree to talk on the telephone, request a face to face sit down preferably not on management company turf. If you are asked why you wish to meet, tell him or her you wish to discuss their performance under the terms of the contract and a plan to get things on track.

Before you meet, I recommend you bring your Board in on this if they are not already and solicit input from them regarding performance of the management company to date.

Prepare for the meeting by documenting specific areas in which the performance is not meeting contract requirements and ask for specific written commitments from the owner as to when and how the deficiencies will be addressed. I don't think the community manager should attend this meeting, it should be up to the owner to deal with his employees privately.

If the owner gives you the run-around and will not make commitments, I recommend you call a meeting of the Board to request they authorize you to begin seeking another management company. Read your contract to determine the conditions and timeline under which the contract can be terminated. If the owner responds to you seriously, I suggest you meet with him monthly to review performance under the contract until you are satisfied they are on track.

Frankly, the owner should have been calling you regularly, as a new client, to determine how things are going, inquire about issues, etc.

I don't know your experience with association management. I suggest you consider purchasing, or have the association purchase, a copy of Texas Homeowners Association Law by Gregory S. Cagel. He is an Austin attorney with a HOA/Condo focused practice, it is a good reference and handy when you have to get into the weeds of Chapter 209 of the Texas Property Code which governs homeowners associations. If there is any oversight of HOA and Condo Associations in Texas, it is by the Legislature through the applicable chapters in the property code.

Good luck

ThomasO5 (Texas)
Posts: 38

Posted:

Thank you, everyone, for your suggestions. We're setting up those meetings. Already got a positive response.

Thanks again!

KerryL1 (California)
Posts: 14,550

Posted:

Let us know what transpires, Thomas. Good luck.

RichardP13 (California)
Posts: 3,868

Posted:

To run a set of financials and email to each of the Board members take all of 10 minutes, with the proper HOA specific software. The only holdup would be reconciling all the bank account once all the bank statements are in house.

I believe your specific issue and the stalling is they haven't completely inputted all the financial data that may or may not have been provided from the prior management company. Cooperation during a transition can be a bitch. I am dealing with one that so far is over a year old.

MartinaJ (Alaska)
Posts: 4

Posted:

https://goo.gl/wACYfM

NigelB (Texas)
Posts: 254

Posted:

Quote:

Posted By ThomasO5 on 10/17/2018 9:24 AM

Posted By BarbaraT1 on 10/17/2018 9:18 AM

Posted By ThomasO5 on 10/17/2018 9:08 AM
Yes, I'm on the board of directors. I'm the President, in fact. We have 218 single family homes in our subdivision, so these are not condominiums if that makes a difference.

To clarify: We've had a new management company on contract since June 1, 2018. There is now only a "September draft" financial report at the company's website portal which board members can access. There were previously June and July reports, but not consistent in content. Now those reports have been taken down. There was also a "draft August" report but that has also been recently taken down.

The reports that were temporarily posted contained the typical Assets/Liabilities and Expenses accounting sheets, but there is no detail with homeowner payment transactions, assessments owed data or vendor payment transactions.

I have most definitely pointed this out many times to our community manager, an employee of the company and he seems to understand and says he is also frustrated with the accounting department.

I've also written several emails to the company owner but received no response.

What can I do next?

First, review your contract. What does it say about what reports will be generated and on what schedule?

If the contract calls for reports that are not being generated or are not being generated on the time frame specified, CALL the company owner and request a meeting to explain why the reports are not being done and when the problem will be fixed. Don't just keep emailing into the void, call. If the owner doesn't take your call, send a certified letter. And start shopping for a new management company.

The requirement to provide monthly reports is most definitely in our contract. I should have said this at the start.

Monthly report requirement:

"Said monthly financial reporting shall include most current: a) statements of balance in operating account(s) and reserve accounts; b) copies of actual statements issued by institution(s) holding said accounts; c) itemized report on all delinquent accounts and disposition of same; d) current financial reporting on the Association's receivables, disbursements, net cash gain or loss, and cash on hand; e) a comparison of monthly actuals with Association approved phased build-out budget and Annual Budget. In addition, the Agent shall present all such receipts, invoices and billing statements related to Association expenses when presenting drafts for Board members’ signatures."

I'll follow your suggestion to request a meeting in person, @BarbaraT1 If they don't respond sounds like it will be time to shop for a new management company.

You will undoubtedly have a termination for cause clause in the contract, at least you should. If the management company fails to perform its duties under the contract to the satisfaction of the board, then the board should look for another management company and terminate the current contract for cause.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By MartinaJ on 10/17/2018 11:09 PM
https://goo.gl/wACYfM

I knew you were a spammer the minute you replied to yourself in another thread. You can't even do 'sockpuppet' right which supports my long-held supposition that spammers are really dumb.