Kickbacks to property manager

I do not see any kickbacks in what you stated. You can hire any business you want whether or not they did work for the HOA. The HOA is just another customer. Is it a kick back if you use your neighbors plumber? They are an HOA member...

Think your trying to find something to complain about.

Michael there are bigger Property Management companies whom have large HOA's that have their own contractors/vendors. Usually a large operation can have a set of "approved" contractors they use on a routine basis. That does not indicate "kickbacks". It just means they have contractors they can rely on for hiring without the whole bid route. You need to review this with your PM on how to handle contractors. Some HOA's appreciate not having the option of bidding. Myself we had a 3 bid process for jobs. It was completely open whom could bid as long as they were licensed, insured, and professionals in that field.

Using a vendor your HOA uses does not mean a "kickback". I've had several vendors offer cheaper services IF since they are in the area and other hire them. It helps the contractors out. They don't have to make special trips. I just bought a water softening system. If I recommend 2 or 3 other people and they use my name when signing up, I get a discount. They can also have the same thing if they do it too. It's not unusual but not anything "ethically" questionable.

Property managers do sometimes get kickbacks. It's not ethical, but in our society that doesn't stop a lot of people. However, the evidence you provide is not convincing evidence of kickbacks. And be careful who you say it to or what you put in writing about this - if not true, it's slander.

Are you on the board that oversees the contracts, contractors chosen and financial expenses? If you are on the board and suspicious of this activity, then you should investigate. Look at those personal credit card receipts to see what they purchased - that's pretty easy to do and will quickly tell you if the money is being spent on association business. If you aren't on the board, who is telling you that these things are happening? Every association has negative gossip and you may just be hearing from someone with bad feelings toward the board.

This happens all the time in my community. We have our landscaper offer special rates to all homeowners to have their trees trimmed. I had my trees trimmed and a big tree cut down by the landscaper. I paid my bill the same as everyone else. But I guarantee that someone will be saying that they did the work for free for me. I have used a contractor that the association used and paid them the going price. I do not expect any discounts or freebies because I'm on the board. But I'm sure that people will say I do.

We have discovered that our last PM, who we really liked at the time, was getting kickbacks for bringing on new vendors, like a finder's fee. It's disappointing.

If your suspicious about kickbacks then seek out different vendors. If there is work that requires more than $1,000 than it is completely reasonable to seek out 3 or more bids for the work. Then you can decide on the most inexpensive one. Opening up the vendor choice to determine the cheapest alternative is warranted.

This is an old thread.

Yup. And you find bad actors in every profession and in all walks of life.

The top management company in our area forbids their employees from accepting gifts from anyone - not even cheap plastic junk that's practically worthless. Their managers would be fired over this.

Which makes sense. You're going to damage the reputation of your company and lose clients over tickets to a ball game? Really??!

Our Tree vendor sends the Board a detailed bid listing what he recommends should be done with the trees within the association. The arborist has numbered each of our 1100 trees so that we know what is happening to each tree. Which trees are to be trimmed, which trees are to be removed, which stumps are to be ground out and which trees are to receive treatments to protect from various infestations. The Board looks over this bid and makes a decision, in which then our PM handles all of the paperwork.

To get this bid the tree arborist walks around all of the association with board members and the PM for about 3 hours looking at our trees and making his thoughts known to us as to why certain steps should be taken. This is an annual process.

Any time a manager arranges for vendors to perform work at an Association, the proposal must first be approved by the Board. In most cases invoices over $5K require board approval unless policy states otherwise. The Association will be invoiced for the work, manager codes invoice & sends to accounting for payment.

How do you know she's using her personal charge card? Any receipts for the Association to pay must be coded & sent to accounting for processing. I would not ever recommend a manager use a personal credit card for Association purchases.

Also, no manager wants to lose their license over kickbacks? Really?

Not the PM necessarily, but the manager's company may be getting something.

For example, we're currently managed by the largest management company in my area. They own a lot of rental properties in addition to managing community associations. This means they have a lot of employees on their books, including maintenance staff who deal with the rentals. The company likes to keep these folks busy, so the PM may accept bids from these employees for HOA jobs. In my experience, though, these employees are often the lower bids, not the higher ones. They also won't necessarily do the best quality work. (CathyA3's mantra: you get what you pay for.)

So... does the PM benefit? Yes. Does their company benefit? Yes. Does the association benefit? Often yes.

I have a hard time getting too upset over this. I can understand why people may think it looks a little hinky. But the board is always the ultimate decider on which bids they will accept. The board can decide to accept a higher bid rather than let the management company do a little double-dipping.

Sounds like a win-win to me, but with one caveat. It's theoretically possible that the manager could rig the bidding process by getting bids from companies that they know will quote a higher price than the one provided by their company's employees. This won't happen in our case since we brought the landscape contractor with us when we changed management companies. But for a new client community who isn't in the middle of current vendor contracts, this is something the board should be aware of. (CathyA3's other mantra: trust but verify. Or consider only hiring management companies who aren't conducting other for-profit businesses. This assumes that this is an option - in some areas, excellent management companies can be hard to find.)