changing PM companies

New to BOD so need some education. How can a BOD interview potential PM candidates without an "open meeting?" Yes, when decision is made it will be on agenda and discussed appropriately. But lots of work is done prior any decion/vote and if 2/3 of BOD are present with interviews, is that considered a meeting...thus open forum?

It would be done in Executive Session, under "formation of a contract".

https://www.davis-stirling.com/HOME/C/Contract-Formation#axzz1eLb9uUe9

Jackie,
This is an Executive session item. It should be noticed but the details can be vague. You can say contract discussions.

Just for the record are you wanting to change the PM or PMC? It can be a lot of work. Hopefully you have board members that can invest enough time to make a good selection. Always check all references. I also recommend not using one of the Big PMCs. They typically are so set in their ways they will not be willing t work with board members as easily as smaller companies.

Remember they will come in with little or no information about existing issues or projects needed to be done. Board members will need to bring them up to speed.

Are you in Northern Ca. or Southern? I have worked with several in the North. The good ones and the bad ones.

Jackie,
It is a lot of work having done it twice over 12 years at two different HOAs. I would also say that it was needed, and we upgraded both times. In both cases we changed from the Developers PMC to the smaller Independant companies.

It is what the author said in person.

Thanks to each of you responding to my concern. FYI, I am and have been a long-time reader of Davis Stirling. If it was crystal clear, there probably wouldn't be reason for this HOATALK site to exist. OK, PM concerns need to be discussed in EXEC session. Easy! So the 3 of us BOD, or even 2 of us (quorum) can drive to various neighborhoods being represented by postential PM companies we are considering without alerting our HOA members? This information gathering doesn't violate anything? I am returning to the BOD after a decade+ hiatus in SoCal.Our next mtg is in 1 month, with officer determinations.

Here mgmt. companies are called "MCs" and individual property managers, "PMs."

I'm not sure what driving by various HOAs will tell you UNLESS you somehow know in advice what particular services the MC provides to each.

With your 3-members board, it sounds like your HOA is fairly small. What size is it? Y

our size might suggest, for example, that you need a portfolio mgr. who spends perhaps 12 hours a week offsite on your HOA's needs doing specific tasks. But how will you know what tasks are being done by relying on drive-bys? Some MCs only do billing, etc., & violations reports. Others might supervise vendors.

I'm a pretty rigid believe in the Open Meeting Act so am not comfortable with a quorum of the Board off together trying to see what MCs to invite for interviews with your Board. On the other hand, there's no way such a drive-around could be an "open meeting."

I just reread DS Exec mtgs: "If a nonemergency board mtg is held solely in exec session, the association shall give notice of time, place of mtg, at least 2 days prior mtg." If 2 members of the 3 member board drive in a car to view communities that potential management companies represent, is that an exec mtg? It is certainly nonemergent. Is is a quorum. Help????

Ok, a few more clarifications: we are a 140 home SoCal HOA that has had numerous property management(MC) companies support our CCR's, Bylaws, Rules and Regs, ARC, fines, etc. Each BOD leaned heavily upon their guidance, which included the MC's property manager(PM). In my 21 years living in this HOA, we have had 3 different MC's; the current MC of past 8 years has provided the BOD and community with 5 different managers;
I was recently elected to the BOD again, receiving more votes that the other 4 candidates totaled. I ran because I couldn't ignore the documented mismanagement that currently exists. I don't want to get caught in a spitting match with right vs wrong if/when BOD decides to consider other options for MC (property management company). In the potential interviewing process it's a simple question to ask for other local communities they(MC) represent; with most HOA's supporting the "integrity of the community", I see some benefit in a drive-through...maybe even chat with a few neighbors or their BOD?

In case you missed it, the topic was "Changing PM companies". Emphasis on companies.

Augustine, you are asking me to answer my original question. I am hoping for simple clarity but so far, nada!

Max,thanks for seeing the non-answers a few have submitted. I will move forward accordingly and have it on agenda for open session.

It wasn't clear that your Board would interview MCs first and THEN drive around. That makes sense. Is a quorum OK driving around? I'm still not entirely comfortable with that, but it kinda seems OK as I already noted above.

The drive-around director(s) would report to the Board in an executive session. the Board will discuss the firms, vote and make an offer to the MC it prefers.

But I don't get your meaning on this last quote: "I will move forward accordingly and have it on agenda for open session." What will you have on the agenda for an open meeting? The vote for an MC combat ring the different firms? ?

I certainly agree that 5 PMs in 8 years is terrible.

So, did Max express any opinion about the drive-aroudj b potentially being an unnoticed executive session meeting??

Technically if a majority of the board is together and discussing board business it is a meeting.

That being said there is some need for privacy on matters like this. In some cases MCs will up and quit on the HOA if they know they are going to lose the contract. This could make your board have to make a rushed decision on the next MC. Do you have a pending contract renewal you are up against in the near future?

Jackie, your talk --interviews--with potential MC reps should be in executive session because they a represent a "contract in formation."

I have two different scenarios about legislation in California. One is recent, just last week as a matter of fact. It is Civil Code §5380 and the misconception that HOA\'s must have their banks in California. The confusion was a three letter word, "trust fund account" For clarity, I went to the legislative bill's author and their legislative director couldn't tell me how a trust fund account is defined for HOA's. They suggested, seriously I might add, that I seek the advice of an attorney. They wrote the bill and haven't a clue of what it means. Neither did the senior partner of the law firm that everyone quotes here.

To the subject at hand. Jackie, you have a little bit of a dilemma. You could post an agenda, two days prior to visiting the associations, but you could be giving your PMC a heads up and that could be awkward. My suggestion would be letting the membership know what your process was and how you went about it when the vote and discussion comes up.

As I reiterated a few times, my company has to communicate with 67 different boards in between board meetings, some are monthly, every two months or quarterly. As I was uncertain about the 2012 Open Meeting Act, and having served on a CAI Legislative Committee, I went to the author of SB563 to get clarification. The sole purpose for SB563 was the abuse that boards, MC's and attorney were doing to Action Without a Meeting. He said as long as the association is being transparent, you will have satisfied the intent of the law. Since 2012, none of the Boards I represent have ever been called into question.

Jackie,
I am sure you at this point be overwhelmed by all of the opinion here.

Another angle you could take that would 100% above board and legal would be to your existing MC that you are doing the formality of getting 3 bids for PMCs. Tell them that this does not mean you are planning on changing MCs. Let them know that it would be way too much work to change, and you are just showing due diligence. Tell them that your board will find the other competitors and for them just to prepare their best offer. Many PMCs are all going to be asking for increases since CPI is up 8.7%.

Then you can notice and follow all the rules and select the best company. That is your job after all.

Dear Max, Kerry, Mark and John: Thanks for hanging with me on this sticky issue.
Max...I loved your example of bizareness (going to the actual author of the bill); I felt your pain along with a hearty LOL.
Kerry...I think we've both learned from this lengthy conversation. I appreciated your perserverance.
Mark and John...both of you simplified options which I am digesting. Sleep should come easier.
Kindly,
Jackie

Another excellent suggestion and much appreciated.

I would not expect many management companies to agree to meet with anyone other than board members.

Their need to change MC's should not be given to a Committee as a "learning experience". This is to important a decision and one that should be made by those elected to do so.

I think Max and Augustin covered this pretty well. I can see a decision being made at an open meeting after the board has done its due diligence in considering all candidates. If you want the homeowners to have a say, a better way to approach that might be to poll them to see what they like and don't like about the current property manager (if you have one) or what they'd like to see in the ideal candidate.

The finalists could then appear at a special homeowners meeting, where the homeowners could ask questions. The decision would still be the board's, of course, but I would hope they would take the opinions and suggestions from the homeowners' meeting into consideration.

The amount of time to develop the process to determine a new PM company is enormous. Researching potential companies, developing the correct interview questions, solicit the residents for their thoughts as to what the company should be responsible for, review company contracts, visit other HOA's that use the company and visit with their Boards is very time consuming.

Given the fact that the P.M took a restraining order out on you and the Board paid the P.M's lawyer fees do you really think they would even listen to you?

Exactly what do you mean by a "forum of 25 pcercent of the homeowners to get rid of [the directors]? Do you mean a meeting to recall the directors? Have you looked at the statutory requirements for this?

You want the board complying with state statutes, the bylaws and the covenants, right? Do you understand that this means you have to comply with these as well?