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DavidG45 (Delaware)
Posts: 994
Posted:
We are under Declarant control, and the PM is constantly asking for new and better furniture, which the Declarant purchase with HOA funds. Now they are asking for new computers with double monitors, just two weeks before Declarant control termination, and it looks like he is going to get it for them.

I just wanted to see if this is normal, so I can offer some advice when the new board of residents gets asked do these things.
KerryL1 (California)
Posts: 14,550
Posted:
The answer should be in your contract with the MC. If it isn't, your new board proablaby wants to revise the contract if they keep this MC. there may other aspects to it that the Board also will want to change.

At our HOA, we provide all of the furniture and computers for the full-time onsite PM and the Asst. PM.
BarbaraT1 (Texas)
Posts: 821
Posted:
No. Everything in my office belongs to the association.

DavidG45 (Delaware)
Posts: 994
Posted:
Quote:
Posted By BarbaraT1 on 05/02/2022 9:47 PM
No. Everything in my office belongs to the association.


Thanks. So long as this is not unusual. I do think I would have preferred they wait a month somresidemts can decide whether not to purchase $10k worth of computer equipment, but if this is not atypical it’s not worth fighting over.

I will save my energy on getting back the thousands of dollars they have misappropriated from the 55+ residents…
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Why do you need to keep this MC after the turn over? I would look into finding another one during this period. It kind of like this MC is trying to set up their own shop than owning their own shop...

Former HOA President
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By KerryL1 on 05/02/2022 7:23 PM
The answer should be in your contract with the MC. If it isn't, your new board proablaby wants to revise the contract if they keep this MC.
I agree.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By DavidG45 on 05/03/2022 4:06 AM
So long as this is not unusual. I do think I would have preferred they wait a month somresidemts can decide whether not to purchase $10k worth of computer equipment, but if this is not atypical it’s not worth fighting over.
For a property management company under contract, and unless specified in the contract, I suspect it is highly a-typical.
DavidG45 (Delaware)
Posts: 994
Posted:
Quote:
Posted By AugustinD on 05/03/2022 6:26 AM
Posted By KerryL1 on 05/02/2022 7:23 PM
The answer should be in your contract with the MC. If it isn't, your new board proablaby wants to revise the contract if they keep this MC.
I agree.

I cannot find it addressed in the contract.
CathyA3 (Ohio)
Posts: 6,299
Posted:
If the on-site manager is an employee, it's reasonable to assume that the employer would provide the equipment needed for them to do their job. Among other things, different software may result in files that are no longer accessible in the future. The association should set its own standard.

As a practical matter, you also don't want the association to be responsible for items that belong to someone else. Your insurer may balk at such a thing.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By DavidG45 on 05/03/2022 8:24 AM
I cannot find it addressed in the contract.
If this is a contract between the Declarant and the Management Company, then HOA Declarant law probably lets the two of them amend to their heart's delight, up until at least turnover of control from Declarant to the owners. What do your governing documents and state law say about Declarant turnover and contracts?

I think the subject of "declarant contracts and what happens at turnover" came up at least once in the last few years, with you or another poster. I believe a number of people pointed out that the instant turnover occurs, the contract is typically voided by at least mutual agreement of the parties?

Do share what you know about what happens to the contract at turnover.

I realize you are in a bad position because you all have a corrupt manager who naturally wants to continue working for the HOA and making money. Which as others pointed out, is way common.

Ask if you want me to take a look at what Delaware statutes say.
DavidG45 (Delaware)
Posts: 994
Posted:
Quote:
Posted By AugustinD on 05/03/2022 8:36 AM
Posted By DavidG45 on 05/03/2022 8:24 AM
I cannot find it addressed in the contract.
If this is a contract between the Declarant and the Management Company, then HOA Declarant law probably lets the two of them amend to their heart's delight, up until at least turnover of control from Declarant to the owners. What do your governing documents and state law say about Declarant turnover and contracts?

I think the subject of "declarant contracts and what happens at turnover" came up at least once in the last few years, with you or another poster. I believe a number of people pointed out that the instant turnover occurs, the contract is typically voided by at least mutual agreement of the parties?

Do share what you know about what happens to the contract at turnover.

I realize you are in a bad position because you all have a corrupt manager who naturally wants to continue working for the HOA and making money. Which as others pointed out, is way common.

Ask if you want me to take a look at what Delaware statutes say.

While I don't have the information in front of me, at the time that I was researching my understanding was that the contracts were not automatically voided, but any contract could be cancelled despite its term. So while our PM contract goes to the end of December, the new resident board could cancel it in May without penalty.

This seems to be not really on the table. I believe we are going to wind up with a board that includes people who have not been involved in the community and thus aren't aware of the issues we have faced. If I am on the board I don't want to be aggressive about this. My initial goal, then, would be to simply right the current wrongs. For starters, I want to insist we use proper accounting methods so the 55+ funds are accounted for; and to recover the money the PM wrongfully and illegal diverted from the 55+ residents to the community at large.

Hopefully either the PM will start doing a better job, or over time their ineptness will become obvious to all.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By AugustinD on 05/03/2022 8:36 AM
Posted By DavidG45 on 05/03/2022 8:24 AM
I cannot find it addressed in the contract.
If this is a contract between the Declarant and the Management Company, then HOA Declarant law probably lets the two of them amend to their heart's delight, up until at least turnover of control from Declarant to the owners. What do your governing documents and state law say about Declarant turnover and contracts?

I think the subject of "declarant contracts and what happens at turnover" came up at least once in the last few years, with you or another poster. I believe a number of people pointed out that the instant turnover occurs, the contract is typically voided by at least mutual agreement of the parties?

Do share what you know about what happens to the contract at turnover.

I realize you are in a bad position because you all have a corrupt manager who naturally wants to continue working for the HOA and making money. Which as others pointed out, is way common.

Ask if you want me to take a look at what Delaware statutes say.

I suspect the part in bold may depend on whether the PM"s contract is with the developer or with the association.

The PM remained in place in my community.

There is some rationale for doing it that way - namely a bunch of newbie directors may not have the knowledge needed to find a new PM, and they may find themselves in a worse situation if they jump the gun. An apparently "corrupt" PM also may straighten up once they begin taking directions from a homeowner board instead of the developer.

But as usual, the details will matter. The PM in this case may be as eager to wash their hands of the place as the new board is to wash their hands of the PM.
BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By AugustinD on 05/03/2022 8:36 AM
Posted By DavidG45 on 05/03/2022 8:24 AM
I cannot find it addressed in the contract.
If this is a contract between the Declarant and the Management Company, then HOA Declarant law probably lets the two of them amend to their heart's delight, up until at least turnover of control from Declarant to the owners. What do your governing documents and state law say about Declarant turnover and contracts?

I think the subject of "declarant contracts and what happens at turnover" came up at least once in the last few years, with you or another poster. I believe a number of people pointed out that the instant turnover occurs, the contract is typically voided by at least mutual agreement of the parties?

Do share what you know about what happens to the contract at turnover.

I realize you are in a bad position because you all have a corrupt manager who naturally wants to continue working for the HOA and making money. Which as others pointed out, is way common.

Ask if you want me to take a look at what Delaware statutes say.

That's never been my experience or the experience of any manager I've known or worked with. I've never heard of an "instant voiding" and I can't imagine how that would be practically applied.

The developer contracts with the management company in their capacity as the board of directors. The contract is between XYZ management company and ABC association and remains in place until it expires or is terminated by the means described in the contract.

DavidG45 (Delaware)
Posts: 994
Posted:
Quote:
Posted By CathyA3 on 05/03/2022 9:52 AM
Posted By AugustinD on 05/03/2022 8:36 AM
Posted By DavidG45 on 05/03/2022 8:24 AM
I cannot find it addressed in the contract.
If this is a contract between the Declarant and the Management Company, then HOA Declarant law probably lets the two of them amend to their heart's delight, up until at least turnover of control from Declarant to the owners. What do your governing documents and state law say about Declarant turnover and contracts?

I think the subject of "declarant contracts and what happens at turnover" came up at least once in the last few years, with you or another poster. I believe a number of people pointed out that the instant turnover occurs, the contract is typically voided by at least mutual agreement of the parties?

Do share what you know about what happens to the contract at turnover.

I realize you are in a bad position because you all have a corrupt manager who naturally wants to continue working for the HOA and making money. Which as others pointed out, is way common.

Ask if you want me to take a look at what Delaware statutes say.


I suspect the part in bold may depend on whether the PM"s contract is with the developer or with the association.

The PM remained in place in my community.

There is some rationale for doing it that way - namely a bunch of newbie directors may not have the knowledge needed to find a new PM, and they may find themselves in a worse situation if they jump the gun. An apparently "corrupt" PM also may straighten up once they begin taking directions from a homeowner board instead of the developer.

But as usual, the details will matter. The PM in this case may be as eager to wash their hands of the place as the new board is to wash their hands of the PM.

In our case the PM contract is with the HOA. I agree that with a bunch of newbies they are probably going to believe it is their best interest to not make a hasty judgement, and I would completely understand that approach. If the board consisted of five veterans the contract would be voided almost immediately, but that does not appear to be likely.

I also agree that if the PM starts getting clear direction from the new Board, it will clear up a lot of the problems. Many of the major issues are in the past and won't be repeated. The only significant lingering issue involves their accounting methods. If we get that cleared up then the PM will simply be annoying. And they DEFINITELY want to keep the contract. As another PM here mentioned, it's a large corporation and the manager of our account is highly incentivized to keep this contract.
KerryL1 (California)
Posts: 14,550
Posted:
I don't think I remember that the contract between MC & assn. is usually or typically voided upon turnover. When turnover occurred here long ago, the Board did hire a new MC after a couple of months learning the ropes.
MaxB4
Posts: 3,513
Posted:
The furniture should be owned by the association, while the computer systems, software and its licenses must remain the property of the MC.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By MaxB4 on 05/03/2022 12:30 PM
The furniture should be owned by the association, while the computer systems, software and its licenses must remain the property of the MC.

Why? Not arguing, just curious.
BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By CathyA3 on 05/03/2022 12:58 PM
Posted By MaxB4 on 05/03/2022 12:30 PM
The furniture should be owned by the association, while the computer systems, software and its licenses must remain the property of the MC.


Why? Not arguing, just curious.

Probably for account security, access to proprietary or licensed software.

The association owns my physical computer, but I only use it to sign in to a virtual desktop.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By BarbaraT1 on 05/03/2022 1:25 PM
Posted By CathyA3 on 05/03/2022 12:58 PM
Posted By MaxB4 on 05/03/2022 12:30 PM
The furniture should be owned by the association, while the computer systems, software and its licenses must remain the property of the MC.


Why? Not arguing, just curious.


Probably for account security, access to proprietary or licensed software.

The association owns my physical computer, but I only use it to sign in to a virtual desktop.

Yes, but are you an employee of a property management company with only one community in your portfolio, or are you an employee of the HOA? Who sends you your statement of earnings in January, in other words?

Proprietary software makes sense in the first case or if you're a contractor who receives a 1099. It makes less sense if you receive a W-2 from the HOA since your employer owns your work product..
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By BarbaraT1 on 05/03/2022 10:11 AM
That's never been my experience or the experience of any manager I've known or worked with. I've never heard of an "instant voiding" and I can't imagine how that would be practically applied.

The developer contracts with the management company in their capacity as the board of directors. The contract is between XYZ management company and ABC association and remains in place until it expires or is terminated by the means described in the contract.
I thought there were some statutes on the subject in some states. Not that I am going to go look them up. Just saying it's worth checking one's state's statutes. They often say a lot about Declarant turnover.
KerryL1 (California)
Posts: 14,550
Posted:
I just checked our contract for other reasons, but looked at "Accommodations" for the on-site PM. "Adequate office space"; the assn. pays for high speed connection and for any wiring upgrades needed. assn provide fax, copier, phone service and any other equipment needed for smooth operation. The MC provides all other kinds of services, e.g., an owner portal; board member portal, and on-site portal.

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