How to get rid of a BAD management firm?

Started by ChristyC1 • 11 replies • 2722 views

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ChristyC1 (California)
Posts: 6

Posted:

The condo I am living in do not have a homeowners-operate HOA (I am in California). It was because some units were owned by this management company.

A few years ago, the management company sold some of the units and I believe (not 100% sure) they do not own any at this point. The service it provides is always inadequate and the monthly charge is fairly high. Now the homeowners would like to get rid of this management and form our own HOA.

In fact, in the past few years, we all had some bad experience with this management company when we encountered dispute. The homeowners always lost and sometimes even need to be responsible for the legal fee for BOTH parties. We are worry if we try to get rid of its service, it might try to back-stab us and cause financial lost.

Hope members here can provide me professional experience. Do any of you have similar experience in the past?

Thank you so much!

JackieB (California)
Posts: 198

Posted:

You need good legal advice. What part of CA are you in?

ChristyC1 (California)
Posts: 6

Posted:

I am in Alhambra, CA

DonnaS (Tennessee)
Posts: 5,671

Posted:

Christy,
Do you have a contract with the M.C? If you do, then you will have a difficult time removing them. If you do not have a current contract, get rid of them asap. What could they possibly do to harm you after they are removed? They are accountable under California law. It does not matter if they own any units or not. They are unit owners just like the rest of you and have 1 vote for 1 unit, no more or no less. Do not let them hold you hostage. If they don't perform, then they go out the door.

ChristyC1 (California)
Posts: 6

Posted:

Thank you for your encouragement, Donna.

I don't think our unit have a contract with the MC (since we bought it more than 10 yrs ago). In fact, what if those who just moved in have a contract with the MC?

Once again, thank you for your respond and support.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Christy,
Do you have a Board of Directors? Individual owners would not hire a management company for individual purposes as the M.C is hired to assist and work for your Board of Directors. Sometimes absentee owners or owners with multiple units will hire a Property manager to take care of their individual units but they do not have anything to do with the association.

ChristyC1 (California)
Posts: 6

Posted:

Donna,

I do not have a Board of Directors.

My case is fairly complicate. In the very beginning back in the mid 80s, all the units were owned by ONE owner and he resides overseas. He rented all the units out and hired a MC to manage it. He sold the units slowly over the past 20 years, so the MC is/was always acting on this overseas owner's behalf. That's why we can't really form our own HOA in the past, the MC always claim they are acting on behalf of more than 50% of the units.

Lately we realized most of the units were sold to new owners, so we would like to set up our own homeowners operate HOA. That's why we have a lot of concerns since this MC is pretty tough. Here's one of the examples:

A former renter now an owner, tried to call the MC and told them to fix a screen door. The MC didn't respond in a timely manner, so the tenant called and told the MC if there's a burglary, she will sue them. A few weeks later, she received a legal bill from the MC. The MC claimed because of her threat of suing them, they went for legal advise and she's responsible for the bill (since she did not end up suing them).

Thats why we're concern about what can the MC do to us? We feel nervous and helpless.

Thanks a lot, Donna, for your advise and timely respond, you're SUPRA!!

Christy

DonnaS (Tennessee)
Posts: 5,671

Posted:

Christy,
Does your neighbor have the address of the owner? He would recieve the bill for the legal opinion back , in an envelope, in a thousand pieces. She does not owe him a single dime.

I would start to get all of the information that you can to set up your own "not for profit corp" in the great State of California. If you now have more owners than this guy, you have the power in numbers. Y

Is this a condo? I ask because the former renter, now owner, asked to have a screen door fixed. Usually that says condo to me. What I cannot grasp is what are you paying your dues for? I mean what kind of services? How are they figuring the dues, based on the total number of units or just the sold ones? This is going to be quite a chore to accomplish but you need to get from under this no win situation.

KrystaT (Florida)
Posts: 58

Posted:

I'm not sure in Cali, but here in FL if you want to know the owner of a property you can look on the property appraisers website for your county. That would help you find out what % of condos are sold.
If available, run an owner lookup for your street/block, cross reference the addresses for a common name. That way you would know how many properties are still owned by the over seas gentleman.

That make sense? I think I explained my idea correctly.

ChristyC1 (California)
Posts: 6

Posted:

Donna,

We do not know the owner who resides overseas. According to what we've been told, this gentleman is also one of the owners of the MC.

Yes, this is a condo with 12 units. Now each unit pay $200 per month and it covers trash, water, very minimal lawn maintenance and the public areas utilities. So far we know that at least 7 units are now privately own.

How they figure out the dues? We have no idea since we haven't received any financial statement or budget for years. I remember I saw some before the year 2000 but since then, I haven't seen one.

Thank you very much for your help and advise.

Christy

DonnaS (Tennessee)
Posts: 5,671

Posted:

Christy,
Do you know if the condo is Incorporated as a "Not for Profit Corp? This guy might just be doing something major ilegal . You need to find out how he has you classified the condo for tax purposes. You have no bylaws or covenants, correct? Just his rules? If you are incorporated, then your Cal. Sterling / Davis Act will have lots of information as to how he is supposed to be running this place. Because he is collecting dues for the common area, he has to abide by the State rules--if indeed you are a Corp.

PatrickH (California)
Posts: 204

Posted:

Hi Christy,

I hate to raise this question, but are you sure that the owner really did convert the building from apartments to condos legally? If you're in Alhambra, you may read about the apartment buildings in Huntington Beach that were illegally marketed as condos. Several people went to prison for that scam.

It sounds like your building, I'm assuming it's one building with 12 units, was once an apartment building that the owner converted to condos. You should do your own investigating to make sure everything was done properly. It sounds like you have no C,C & Rs or Articles of Incorporation, so all that should be investigated.

Usually, when a developer or owner builds or converts a property to condos, they want to sell them off and turn over the operation of the Homeowners Association to the members as soon as possible. If your owner has been selling the units in dribs and drabs for the past 10+ years, then he may have something to hide and not want to turn the operation of the HOA over to the owners. If the original documents state that transfer of the operations for the association goes to the members after 75% of the units are sold, he may never want to reach that threshold so he and his management company can always control the operations.

I may be a little paranoid, but something just doesn't sound right here.

Keep us all informed.

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