Property manager charging unauthorized fees

Started by ChrisE8 • 15 replies • 572 views

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ChrisE8
Posts: 454

Posted:

The property manager of a HOA that I've been dealing with has provided services under a property management agreement that contains a list of fees that the property manager can charge owners, such as for property transfers.

The property manager has been charging owners additional fees that are not on the list and has been keeping those fees. For example, if an owner requests any records, the property manager would charge $100 plus a per-page charge. Nothing in the property management agreement allowed this.

The property manager tried to charge me this but I checked the management agreement and refused, and the property manager backed down and provided the records anyway.

If you were an owner, wouldn't you let other owners know that they had been wrongly charged?

ND (PA)
Posts: 792

Posted:

Before doing anything myself, I might first bring to the attention of the HOA Board and request that they work to rectify the situation with the Property Manager (PM) which would involve the Board and/or PM being the ones to notify the rest of the Members. Fixing the situation involves:
- Board getting on same page with PM about what fees are permissible for PM to collect (IAW the contract);
- Board requiring the PM to promptly refund in full any fees that were collected by them over the years they have been PM which were not permissible;
- Board requiring the PM to notify entirety of membership in regard to the situation so everyone has awareness and can take appropriate action if they do not receive a refund but are entitled to one.

And prior to bringing to the attention of the Board, I would do a bit more homework and ensure that my position and understanding of things is solid. (Not saying you haven't already done your homework.) And when I do bring it to the attention of the Board, I would be careful about pointing fingers, casting blame, and making assumptions. Finally, I would also request some sort of response and reassurance that the situation would be dealt with appropriately and in a timely manner, otherwise I may have to make other members aware myself.

ChadH3 (Alabama)
Posts: 50

Posted:

I would definitely let your Board of Directors know. There's a good chance they don't even realize that themselves. I'd give them some time to see if they can straighten it out before riling up the rest of your association over it.

KerryL1 (California)
Posts: 14,550

Posted:

Is this the HOA where the PM is on the Board, Chris? When you write that you're "involved" with it, does that mean you're an owner?

MarshallT (New York)
Posts: 414

Posted:

Hi,

Consider taking this issue to the board first. If the PM really is taking advantage of clients like this, the board will want to hire a new company. They can also send a formal notice to other owners about the records issue, if necessary.

While it's great that you want to help out other owners, you want to be careful not to create unnecessary drama or issues.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Good question, Kerry.

ChrisE8
Posts: 454

Posted:

Thanks, everyone!

KerryL1, thanks for your post. I'm more than an owner, but am not a board member. I offer my assistance to boards every now and then and help out on an ad hoc basis, in a range of roles.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

I'm still not following ...

JohnC77 (California)
Posts: 562

Posted:

The fees charged to homeowners and paid by homeowners are generally not listed on an addendum listing fees charged to the HOA. I have had only two instances where a homeowner was charged for getting records, one, because the person requesting the records were never provided by them while they were on the Board. In California, a management company can charge more than an association by statue.

ChrisE8
Posts: 454

Posted:

Quote:

Posted By GeorgeS21 on 02/05/2021 9:11 AM
I'm still not following ...

The property manager's management agreement lists the specific fees that the property manager can charge owners for various things.

Despite that, the property manager charged various additional fees (usually three figures) and kept the money.

JohnC77 (California)
Posts: 562

Posted:

Quote:

Posted By ChrisE8 on 02/05/2021 9:46 AM

Posted By GeorgeS21 on 02/05/2021 9:11 AM
I'm still not following ...

I would look even closer at the contract and the income statement. The fees charged to a homeowner such as a lien fee or a late fee will show up as an expense to the HOA, meaning the HOA becomes whole if and when the homeowner pays.

The fees you mention are not charged to the HOA and the fees are kept by the entity who provided the service.

I have worked for companies that charge fees for their service to homeowners, but they never built any kind of technology platform.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

I mean not following the bit about being more than owner?

ChrisE8
Posts: 454

Posted:

Quote:

Posted By GeorgeS21 on 02/05/2021 10:59 AM
I mean not following the bit about being more than owner?

That part is not relevant for my question, and I've shared all that I will share about that part.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ChrisE8 on 02/04/2021 9:38 AM

If you were an owner, wouldn't you let other owners know that they had been wrongly charged?

If I were an owner, I would inform the Board that the PM is exceeding the terms of the contract.
If something wasn't done, I would then inform the owners that it's time for a change of board members because they are allowing the PM to do this.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Well!

I’m not gonna share any secrets, either.

ChrisE8
Posts: 454

Posted:

Quote:

Posted By GeorgeS21 on 02/05/2021 12:36 PM
Well!

I’m not gonna share any secrets, either.

I didn't intend to come across as snarky; (1) plenty of people on this board say that they won't give details about various things out of concern of "outing" themselves in real life and (2) a discussion of my role with a board (which the board asked for) would just result in this discussion being sidetracked.

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