is it normal to for the Master HOA to leave to Locals/Subs out to dry?

Started by AdamL1 • 6 replies • 317 views

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AdamL1 (UnitedStates)
Posts: 559

Posted:

Our Master HOA has a history of frequently changing vendors and negotiating new contracts without informing or involving the sub HOAs. This leaves the sub HOA's to then get hit up with an increased rate because they are then all alone and/or needing to scramble to find a replacement vendor or scramble to try to figure out who the Master's new vendor is and try to say "me too."

Most recently, our Master is changing Management Companies and after pulling some teeth, I've finally discovered they are changing their contract. We previously were included on the overall PMC contract and now we will need to scramble and figure out how to budget for this unexpected cost.

The current Master HOA leadership has an attitude of "whatever, its not our HOA" and refuses to include the subs.

Is this normal? How to move the needle to a better, unified attitude and culture?

AugustinD
Posts: 3,698

Posted:

Without seeing the Master HOA's and the Sub HOA's governing documents, I do not think intelligent comment is possible.

BillH10 (Texas)
Posts: 1,217

Posted:

I'm with Augustin. To provide any comment regarding your situation would require a review of the documents of both the master and sub-association. I'm very puzzled as to how a change in the master association MC affects a sub-association contract for management services.

We live in a 105 home sub association of a master association with 9,300 homes. There are other sub-associations, the vast majority of the 9,300 homes are not in an separately incorporated sub-association.

Some subs for years have been managed by the same MC as the master, under a completely separate contract for management services. Other subs have engaged other MCs than that used by the master.

Over the last 24 months, the master association has reviewed and selected new landscape contractors, and a new management company. Those actions have not affected the sub association at all with the exception we now access a different on-line portal for master association information or to pay the master association assessments.

So, to answer your question, the legal relationship between our master and sub-associations does not provide any window of opportunity for leaving a sub hanging 'out to dry'.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Adam,

If your sub-HOAs can handle it financially, they should have their own vendors for services and seek service "synergies" where feasible. Master Associations handle the comprehensive community property and assets for you, right?

Sounds like your community has a tradition of simply piggy backing on the master association's choice of vendors but this is vague to me.

CathyA3 (Ohio)
Posts: 6,299

Posted:

In the Master/Sub communities I'm familiar with, the individual associations handled different things.

For example, the Master's landscaping contract covered things like entryway landscaping for the entire community while the sub's landscaping contract dealt with common area surrounding attached units (the latter of which was paid for entirely by owners of the attached units). They may or may not have used the same vendor for these contracts, but the contracts were bid separately.

So calling this "leaving the subs out to dry" is loaded and possibly inaccurate. Whether or not separate contracts are "normal" will depend on the needs of the communities and whether or not there are advantages to doing things that way.

LoriM15 (Florida)
Posts: 1,009

Posted:

In our community we have a master association and three sub associations. We have different management companies for the master and the subs. The subs do all use the same management company, but they have different part-time "portfolio" managers who have many communities. We used to all have completely different vendors for landscaping, irrigation, tree-trimming, etc. In fact, it caused an issue when we all recently started using the same company for our landscaping because the landscaper didn't understand who was in charge and started making changes to master property at the request of one of the sub's presidents. It caused an ugly incident.

Anyway, I don't think it's uncommon for the sub associations to stand on their own and choose their own vendors. Yes, there might be some savings in economy of scale with all the associations contracting together. However, sub associations with their own vendors have greater control over exactly what they want done.

If you sub association manages their own budget separate from the master, I don't think the master is leaving the subs "out to dry" by making changes without the subs. But coordination would be nice.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By LoriM15 on 02/04/2022 7:02 AM
In our community we have a master association and three sub associations. We have different management companies for the master and the subs. The subs do all use the same management company, but they have different part-time "portfolio" managers who have many communities. We used to all have completely different vendors for landscaping, irrigation, tree-trimming, etc. In fact, it caused an issue when we all recently started using the same company for our landscaping because the landscaper didn't understand who was in charge and started making changes to master property at the request of one of the sub's presidents. It caused an ugly incident.

Anyway, I don't think it's uncommon for the sub associations to stand on their own and choose their own vendors. Yes, there might be some savings in economy of scale with all the associations contracting together. However, sub associations with their own vendors have greater control over exactly what they want done.

If you sub association manages their own budget separate from the master, I don't think the master is leaving the subs "out to dry" by making changes without the subs. But coordination would be nice.

Well said.

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