Property Manager Spending Guidelines

I'm on the board of a small (<25 units) HOA in CA. I recently read a copy of our HOA's contract with our property manager, and the HOA effectively gives the property manager arbitrary discretion over spending. In practice, the property manager consults with one or all the board members over certain issues, but this has led to disaster over the years. I want to establish clear guidelines as to when the entire board should be involved before the HOA's money is spent.

For example, a simple dollar amount threshold before requiring board approval is not ideal because that can significantly slow down the process for something that needs to be addressed quickly.

Can some of you tell me about how your property managers are contractually allowed to spend money in your HOAs? Or if you have any suggestions or lessons learned to share, I would appreciate those as well. Thank you.

$750. This was was for a 144 condo and 22 patio home community. We did this because there are always unexpected repairs needed for condos where the HOA is responsible for all exterior maintenance and lawn care. The property manager did send us a copy of the invoice and a description of why the work was needed.

Thank you for the replies! I like the contracted handyman idea. Our property manager tends to wait for issues to pile up before requesting a handyman, because in theory this saves money. In reality, things pile up and don't get fixed at all leading to more expensive issues.

I'll give a slightly more specific example of when our system failed. We once had an issue in the common area that was posing a health concern for multiple owners. The owner was in contact with the property manager, and the property manager, in his discretion, did not treat it as something that required urgency. And worse, his discretion was used in a way that significantly delayed solving the problem. At one point, he actually told the owner on behalf of the board that the HOA exhausted all possibilities to attempt to resolve the issue. This left the owner with the responsibility of solving the problem in the common area, and then when the owner found a solution, the property manager then requested bids for every resolution step, slowing down the process, even though the dollar amounts were less than other issues that were much less severe. The most critical failure after all that was that the property manager accepted a very expensive bid that downgraded the required scope of work. Not only would it not have solved the problem, but the work would have had to be undone to solve the root cause. The property manager unilaterally accepted the bid and told the vendor to avoid communications with the owner. Fortunately, the owner intervened with the board in time. And more fortunately, the owner has yet to sue the HOA for personal injury.

As awful as all that sounds, the property manager's contract has language that allows this kind of behavior, and redirects the ultimate responsibility to the HOA. While replacing our deeply-entrenched property manager is a long term solution, at this time it makes most sense to try to prevent this issue from occurring by establishing spending guidelines from the board, which the contract allows.

That's why I'm interested in a set of guidelines that would have prevented this issue. On paper, having more board involvement seems like it would slow down the process. But in this case, if the board could have immediately understood the severity of the issue from the owners themselves, they maybe could have instructed the property manager to prioritize a solution and be extremely transparent.

For example, for common area issues directly impacting resident safety and costing more than $1500, maybe there should be a requirement that the board and/or the resident/owner be cc'd on all communications.

I don't have a good catchall solution, so that's why I want to hear about the nature of other HOA-property manager relationships.