what's wrong with this picture?

Started by JoanQ • 11 replies • 605 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JoanQ (California)
Posts: 36

Posted:

We have a facilities manger who is not capable of handling his job, and is basically incompetent. The past facilities managers have always processed all the paperwork and shareholder certificates in-house (we are a co-op). Our Board, just took the paperwork/certificates duties away from the current manager and made the decision to outsource the paperwork to an escrow company. This will cost and additional $1000 per sale split between the seller and buyer. One of the Board members set this contract up who happens to be a real estate agent. The treasurer said that the co-op would continue to collect the current transfer fee of $1000 "because it is a money maker". Question 1 - can the Board just make this decision without shareholder input?? and 2 since non of the paperwork will be done in-house how can we continue to charge a $1000 transfer fee?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You continue to charge the 1K because that is the expense for the HOA to pay the outside source. Is your HOA a non-profit? If so, then the "make money" scenario needs to cease. The purpose of a non-profit HOA is to cover it's own expenses. So I would question how this is a money maker without exposing the HOA to taxation?

Former HOA President

JoanQ (California)
Posts: 36

Posted:

The HOA will not be paying the outside source - they are saying the future seller/buyers will pay $500 each. but will continue to charge a $1000 transfer fee. we are a non-profit co-op.

AugustinD
Posts: 5,144

Posted:

Joan, by any chance, do your co-op's governing documents specify the charge of a transfer fee, with said fee then going to the co-op's Reserve Fund?

I feel your pain. $2000 per each unit transfer is steep unless maybe you all are in, say, San Francisco or similar where condos sell for such high prices vis-a-vis much of the rest of the country.

This may or may not help: https://www.davis-stirling.com/HOME/Transfer-Fees

JoanQ (California)
Posts: 36

Posted:

The By-Laws state a $1000 transfer fee but does not designate where that money goes. I was reading the Davis-Stirling that you sent and basically they cannot charge more than it costs to transfer. AND they have to have a list of fees.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By JoanQ on 02/17/2019 4:20 PM
The By-Laws state a $1000 transfer fee but does not designate where that money goes. I was reading the Davis-Stirling that you sent and basically they cannot charge more than it costs to transfer. AND they have to have a list of fees.

I agree with your take. If you are going to start sending letters to the board to ask for a breakdown, cite https://www.davis-stirling.com/HOME/Statutes/Civil-Code-5600#axzz2EU1Roc48.

Are you sure it is the Bylaws that authorize the $1000 transfer fee to the HOA? I think it is more common for a transfer fee to appear in the Declaration (a.k.a. CC&Rs). There is a difference. For one, the courts put a bit more emphasis on the Declaration (or CC&Rs) when making decisions. Bylaws tend to cover how board meetings are conducted; eligibility requirements for board directors; voting rules; and so on.

JoanQ (California)
Posts: 36

Posted:

Yes it is under the By-laws it's grouped with the financial responsibilities this is a Co-op

JoanQ (California)
Posts: 36

Posted:

the other thing is that the President is always referring to Davis-Stirling, but when I have sent her specifics out of the Davis-Stirling Act she ignores them. I appears that none of the Board members know the difference between By-laws, Rules and Regulations, and Policy and Procedures

AugustinD
Posts: 5,144

Posted:

Joan, if you keep reading here, you will see it is pretty common for HOA, condo and co-op presidents to be ignorant of the law. This does not mean it is okay. It means that the worst of amateurs is what usually ends up on HOA, condo and co-op boards.

Causing change in a HOA, condo or co-op can be a huge chore. But it can be done.

New York City has a lot of co-ops. I think boards there are ahead of the curve.

Sounds like Rory, others and you may be on the brink of shaking things up at your co-op.

JoanQ (California)
Posts: 36

Posted:

yes, who knew a couple of questions could reek such havoc !!!! part of it started by my questioning the disclosures documents I received when I purchased. - some crucial information was not included in my documents and 7 other new owners. Do we have a possible law suit for non-disclosure - probably

RichardP13 (California)
Posts: 3,868

Posted:

I am afraid this is some confusion here. This sounds like someone handling a sale and preparing documents that a escrow company is requesting. The escrow is NOT going to do the work for you. You might have a documents company that specializes in this sort of thing, I use one myself. But a facilities person? Aren't they the people who handle maintenance?

JoanQ (California)
Posts: 36

Posted:

this co-op does not and has never used an escrow company before - they called the office manager the "facilities manager". he does all the paperwork for the co-op, scheduling of meetings, etc. all the past office managers did the transfers of shares, but apparently this current manager cannot grasp how to do it. so the Board decided to hire an escrow company, with no vote from the shareholder, and the financial burden is put on the seller and buyer. $1000.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here