Changing Your PMC

Started by LetA • 4 replies • 178 views

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LetA (Nevada)
Posts: 2,679

Posted:

I have not seen yet, it is possibly obscured by different wording, but I have not seen a ratification or renewal of the PMC contract.

SO!! What is the procedure to change PMC's? That is after we determine the contract end date.
Is it lawful, ethical for the HOA President to solicit bids (3) and have sealed or unsealed bids mailed to their personal residence then have the agenda item place on the following BOD meeting agenda for a vote?

Second, Is it legal and ethical for one of the BOD to solicit contractor bids for service to make repairs if the contractor is an friend or acquaintance and the BOD is not receiving anything n the back-end?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Let

Quite often a PMC contract will be for a determined time (say a year) then automatically renewed unless cancelled. Typically during the first year there might be a 90 day notice to cancel. After the one year it might be 30 days. That is how ours reads. You need a copy of the contract.

I would solicit 3 bids from other PMC's. Regardless of where sent, they should be reviewed by the entire BOD (or at least several BOD Members) before one is suggested and voted on by the entire BOD. While selecting, inquire about how they would suggest you go about the transition. An experienced PMC will know how to do it.

I am always leery about hiring friends/family of BOD Members if for no other reason, appearance sake. That said, I would consider it if the the BOD Member they are friends/family with will recuse themselves from discussions and voting.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By LetA on 05/08/2022 9:41 AM

Is it lawful, ethical for the HOA President to solicit bids (3) and have sealed or unsealed bids mailed to their personal residence then have the agenda item place on the following BOD meeting agenda for a vote?

As long as a board majority agrees to this, I see no problem.

Watch out for the current PMC trying to sabotage the effort.

Quote:

Second, Is it legal and ethical for one of the BOD to solicit contractor bids for service to make repairs if the contractor is an friend or acquaintance and the BOD is not receiving anything n the back-end?

All the state statutes I have seen on this subject say that it's legal as long as the director discloses the relationship.

Did you check the Nevada HOA and nonprofit corp statutes for discussion of conflicts of interest?

CathyA3 (Ohio)
Posts: 6,299

Posted:

I strongly recommend *not* mixing business and personal relationships unless you're prepared to torpedo both relationships.

A disclosed conflict of interest is still a conflict of interest. You could mention to your friend that your HOA will be going out for bids, but then you'd need to recuse yourself. Disclosing does not remove the requirement to recuse.

Finally, it just doesn't look good. Why create the suspicion of wrongdoing if you don't have to? Homeowners already think boards are up to no good, why give them any more ammunition?

LoriM15 (Florida)
Posts: 1,009

Posted:

Before I was on the board they changed management companies because they were unhappy with the PM and the support from the company. Found a new PM and hired them without consulting with our attorney. Got sued by the old PM company because they didn't read the contract closely enough to give proper notice and fulfill some other obligations. Cost the association a large dollar settlement.

If you do this, be careful to get advice on how to get out of the old contract correctly.

I agree with the conflict of interest, even if disclosed, not looking good. We dealt with that over the last couple of years because our PM's husband was our irrigation vendor. She never approved his invoices so in reality there was never a conflict of interest, but the perception was there and it was always used as ammunition when someone disagreed with a board decision.

There are plenty of other choices available. But be prepared - with the job market the way it is, your new PM might not be any better than your old one and is probably going to cost you a lot more money. We have been interviewing PM candidates and 1) it was hard to find three good candidates and 2) they all wanted significantly more than our current PM - and many had incredible demands about working from home or wanting extra time off.

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