Working with money when everyone knows how much you’ve got

Who else gets to look at your budget other than owners & the PM. Don't you have a contract with the latter?

I read financial reports provided by the PMC etc, analyze them, write reports and the occasional spreadsheet to summarize them, and try to get the other Board members to read them / look at them. Our Board is somewhat dysfunctional. Our contract with the PMC allows them to bill varying amounts each month based on things like “number of violations”. PMC doesn’t like to talk to anyone but the Board President - who goes silent for long periods of time.

Bill

What the PMC bills hsould be in their contract. If you think it should be changed, then you'll need to get a majority of the board to go along with your plan.

BillD16, when the next contract renewal date approaches, doesn't solicitation of bids remedy much (or all?) of your concerns?

Not to be a smart aleck, but if your PM and vendors are acting like car salesmen, you need new ones. :-)

I've never experienced anything like what you're worrying about. For one thing, we don't disclose our budget when we go out for bids. Second, a yearly budget is mostly an educated guess - we may know exact costs for some things, but other items are projections and reality has its own ideas. Just because we've budgeted $x for something doesn't mean we'll spend $x.

Yes, the PM will know because that person will have been involved in preparing the budget for the coming year. But experienced PMs also know that most HOAs/COAs run very lean and are always looking for ways to stretch their dollars. Overcharging for services is basically an invitation to boards to do some comparison shopping, and the PM may lose a client over it.

Sounds a bit of a case of not understanding how a HOA budget works. A PM is a hired contractor. There is a contract in place of what they are supposed to do and for how much. I don't think they are going "Open checkbook let's cash in". That's NOT how you run a HOA or a PM. Ask Max he knows...

So you need to change your view on things or get rid of the PM.

When I left my HOA the new board took over. They had no clue how a HOA budget worked. We are to collect as much as we spend on operational expenses. At the beginning of the month, we collected dues so budget showed $5K in the bank. Typically, a week later AFTER all bills are paid it's back down to barely $200 - $500. Not enough to cover much else expense wise. Well the new board got in and saw we had $5K in the bank. Went around telling everyone how much of a big fat liar I was. That there was money in the bank. So the greedy new board members I had always denied their pet projects, spent the money on them. Well about a month later, I am getting a few phone calls... LOL! There's no money in our bank account what do we do? My response? Learn a lesson. You don't spend the money you see. You budget the money you see to pay expenses. A PM would also know this since they are most likely contracted to help manage a BUDGET.

I’m beginning to think that my situation is so uniquely dysfunctional that I shouldn’t ask questions here anymore. Don’t get me wrong: I appreciate that people are kind enough to take the time to respond. I get what you’re saying. But our PMC / PM have been highly non-responsive to inquiries about billing details. And they’ve lately been non-responsive to anyone but the Board President. And … so much other BS. Forgive me … this is one of those situations where what needs to happen is for me to find new people to serve on the Board. New people who actually care about the neighborhood. So far: nada.

Bill

Thanks, AugustinD. I get that, in theory, that should help. But the rest of my Board seems to think that our PMC is responsible for telling us what to do. And they’re afraid of the cost and effort involved in changing to another PMC. (I’m not convinced it would be especially tough).

It’s not just the PMC. For several years now, a substantial budget item has been contracted out to a company owned by the daughter of a homeowner. They do good work and aren’t gouging us. But the origins of this arrangement are lost “like tears in rain” - we’ve got diddly for institutional memory. Old meeting records are ‘terse’.

I probably shouldn’t get philosophical about it here, but I think the entire system - HOAs, PMCs, state legislation of same - is simply, fundamentally broken. HOA Board seems to be a job that few people take seriously, and so HOAs seem ripe for abuse at the hands of opportunistic PMCs{1}. Think about other jobs that are necessary, but nobody really wants to do them: they tend to be prone to corruption.

I should probably just move.

Bill

{1} I’ve been largely impressed with the PMs who contribute here. I can only hope that aliens might abduct you, clone your brains into pods, and covertly place those pods under the beds of the PMs I’ve had to deal with.

I think you're right about what needs to happen. Hopefully you can find enough allies.

Your community may not be as unusual as you think. We've had questions from many posters whose board or PM won't respond to questions and records requests, or who are running their own little dictatorships. I've seen at least one poster who thought they actually weren't in an HOA at all because there hasn't been an elected board for years (there was still an HOA but their corporate status had expired, and THAT'S a big problem). Another poster was living in a community where a few homeowners had gotten together and "created" an HOA and was billing all the neighbors. Another was living in an older HOA whose CC&Rs actually *had* expired after 25 years and nobody had done anything to revitalize them. And were a few communities whose associations were broke and weren't maintaining the common elements (one poster wanted to sell their condo and couldn't because there were tarps on the roofs and the association didn't have enough money to replace them).

I think the bad HOAs have similar things wrong with them: 1) incompetent or deliberately misbehaving boards, often in collusion with the PM; and 2) apathetic or absent homeowners who won't or can't fix the first item. Communities can also have unique features that cause their own problems, such as very tiny associations (think a single building with 2 or 3 condos) or very large ones that may also contain some commercial property - I'd also include communities in depressed areas with too high a percentage of owners not paying assessments. But mostly the underlying causes of HOA dysfunction are the same self-inflicted ones.

We occasionally kick around these issues and talk about possible solutions to fixing the whole HOA/COA setup. Mostly we end up agreeing that the problems are pretty resistant to change for reasons outside of individual homeowners' control.

I think people posting their experiences here and analyzing why bad things happen is extraordinarily helpful. I agree the problem is largely unpaid volunteers being asked to do things well beyond their skill set and understand things well beyond their abilities.

The amount of living space I need is about 1300 square feet, with garage. Just the size of a medium-sized condo or townhome. But I do not think I can stand being subject to the financial, legal, and infrastructure-related incompetence of owners and directors who, as SheliaH puts it, have about the same qualifications as the partiers at the local watering hole.

shop around and see what other management companies offer. Your current company could be cleaning you out, or their rates could be reasonable, only way to know is to see how what kind of bids you get.