Conflict with Management Company

Started by BobM5 • 5 replies • 1287 views

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

⚡ Takes 30 seconds

Already a member? Log in

BobM5 (California)
Posts: 34

Posted:

I'm the board president of our HOA. We have a management company, but no resident manager. I contend that the management company is an agent of the board and that the board is legally responsible for the actions of the management company. The management company says that since we hired them, they are legally responsible for their actions. Who's correct?

As board president, I feel that it is my responsibility to prepare the agenda for board meetings. The management company says that, as professionals, it is their responsibility. I believe that if the board has asked for the management company, at a previouse meeting, to perform an action, a report on that action should appear under old business at the next meeting. The managment company says that it should be included in the managment report. I've noted that if the managment company has done nothing, the item doesn't appear on the management report. Again, how do other HOA's handle this.

HaroldS (Arizona)
Posts: 906

Posted:

Who's in charge there? Who's paying the bills? You need to dump this MC and hire one that will do what you want. Harold p.s. out of curiosity: is this the management company inherited from the developer?

NancyD1 (Florida)
Posts: 447

Posted:

Bob,
You don't have to contend that the MC is an agent of the BOD, you pay them, they are your employee! If they think they are legally responsible for their actions let them to sign a landscaping contract, and when the BOD does not approve the contract, lets see the MC pay for the contract.

As for the agenda, the MC, when asked for input, can add items to their Management Report. They do not have a say on what can be voted on or not. Our PM gives a Management report at each BOD meeting. It has to do with the common property elements and what is the general goings on in the community, they also report on what contracts are coming due. The actual contract decision is the BOD so we would give the actual prices and then vote on who we will give the contract to. IMO, if your MC has done nothing in a month, and they have no report to give, they should not be employed.

RogerB (Colorado)
Posts: 5,067

Posted:

Bob, the Board is responsible for all actions, including which management company they hire and the duties required. These are included in the management agreement. The management company is responsible to professionally perform the duties specified by the management agreement, which normallly includes "additional items requested by the Board which are provided in writing". The management accountable and are responsible for their actions.

As President it is your choice whether to personally create the agenda or have the management company provide it when it is specified in the agreement. In which case you may determine the information desired on the agenda and allow the managing agent to create the agenda and other items; and to provide in advance a Board packet to all Board members.

Unfinished duties you specifically requested at a previous time is not an item under unfinished business; it should be addressed in their management report. If they have not completed a requested task they should discuss this and give a good reason why it is not yet done. Only items "tabled", to be handled later, are included under unfinished (old) business.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By NancyD1 on 10/15/2007 8:25 AM
Bob,
You don't have to contend that the MC is an agent of the BOD, you pay them, they are your employee!

Not true Nancy. The MC is an Agent; they are not an employee. As I have posted previously there is a significant difference.

JosephW (Michigan)
Posts: 882

Posted:

Its going to depend on the wording of the contract. Some management contracts state that the management company is an independent contractor and not an agent of the association. This doesn't remove the board from responsibility for management's actions (or inaction), but it would prohibit the management company from acting in the association's name, as in signing contracts.

Depending on your documents, the actual format of the management contract may be impacted by the indemnity clause, so you should always make sure the association's insurance agent knows how the relationship is structured to make sure the association is properly covered for the actions of the management company (including fidelity bonds or crime coverage).

Other questions:

The agenda is the responsibility of the Chair/President who may delegate it to management

While you are technically correct about the management report and old business, don't get too bogged down in it. Tell the management company to structure their report with an "Old Business" section to help you track items from prior meetings.

Joe

Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal

🎯 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