HanhN1
Posts: 63
Posts: 63
Posted:
My homeowners association has about 140 units located in California. I wonder if we need an accounting office to hold records instead of a property management company. Your feedback and input are valuable.
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Is a Property Management needed by law?
Started by HanhN1 • 9 replies • 1467 views
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PaulM
Posts: 1,325
Posts: 1,325
Posted:
HahN1: It is usual for accounting records to be handled by the Prop.Mgr., as well as assisting with the budget and other financial needs.
I do not believe a Prop.Mgr. is needed by law, however, but there are many concerns on which a Mgmt. company can advise you. The accounting office has expertise only in one area. Check your docs to learn if it is recommended that you enlist services of a mgmt. company.
I do not believe a Prop.Mgr. is needed by law, however, but there are many concerns on which a Mgmt. company can advise you. The accounting office has expertise only in one area. Check your docs to learn if it is recommended that you enlist services of a mgmt. company.
GeraldT4
Posts: 1,011
Posts: 1,011
Posted:
Quote:
Posted By HanhN1 on 01/24/2008 6:13 PM
My homeowners association has about 140 units located in California. I wonder if we need an accounting office to hold records instead of a property management company. Your feedback and input are valuable.
My homeowners association has about 140 units located in California. I wonder if we need an accounting office to hold records instead of a property management company. Your feedback and input are valuable.
HanhN1 - Regarding California law (Davis Stirling) that pertains to associations, go to http://davis-stirling.com/index.html in the upper left side click on Index of Laws, and then click on Davis Stirling. My read is there is nothing that requires a property manager.
RaymondC
Posts: 63
Posts: 63
Posted:
I would also suggest that an organization so unsophisticated as to have to ask this question, is a pretty poor candidate for self-management. I don't mean anything personal by this, but one of the things a self-managed association must have is full knowledge of applicable law at Federal, State, and local levels. Or at least have ready access to such information. You can't self-manage by asking questions in a forum like this. There is just too much at stake.
I would encourage you and your board to review all applicable laws, and your own documents in an orderly fashion, make a list of the present functions of your property manager, and see how you can fill them while maintaining compliance.
Good luck.
I would encourage you and your board to review all applicable laws, and your own documents in an orderly fashion, make a list of the present functions of your property manager, and see how you can fill them while maintaining compliance.
Good luck.
KevinH
Posts: 52
Posts: 52
Posted:
One thing to keep in mind if you decide to self-manage, your treasurer most likely will need to be bonded (to help protect the HOA in the case he/she runs off with all the money).
Personally, small HOAs could probably handle self-management. It's something I have looked at in the past, because the cost of management companies can seem so extreme, in comparison to the money coming into the HOA.
However, once you have had a management company in place, there may be a requirement in your bylaws, etc that states that in order to switch to self management would require a >50% vote of members (2/3 or 75% in many cases).
This mainly helps to ensure such a big decision is OK with the majority of the stakeholders, before they discover otherwise. Especially if the board turns out not to be very good at self-management.
But if you feel you are stuck with a bad management company, you can fire them and get another. Never feel that you are stuck with them (unless somehow they actually have a seat on the board - yuck).
It seems an MC borders on one side or another: They are unscruplous, and suck the HOA dry with hidden fees and costs not clearly mentioned in the contract. Or they are taking on too many HOAs and other properties to try to make ends meet for themselves financially, to truly give your HOA the service quality you seek. That has been my experience so far. The fault probably lies in the system that encourages developers to create HOAs, which saves the city lots of money and headaches, but is poorly regulated, which generally means the homeowners are the real losers here. In some ways it is getting better, but it has a long way to go yet I think.
Personally, small HOAs could probably handle self-management. It's something I have looked at in the past, because the cost of management companies can seem so extreme, in comparison to the money coming into the HOA.
However, once you have had a management company in place, there may be a requirement in your bylaws, etc that states that in order to switch to self management would require a >50% vote of members (2/3 or 75% in many cases).
This mainly helps to ensure such a big decision is OK with the majority of the stakeholders, before they discover otherwise. Especially if the board turns out not to be very good at self-management.
But if you feel you are stuck with a bad management company, you can fire them and get another. Never feel that you are stuck with them (unless somehow they actually have a seat on the board - yuck).
It seems an MC borders on one side or another: They are unscruplous, and suck the HOA dry with hidden fees and costs not clearly mentioned in the contract. Or they are taking on too many HOAs and other properties to try to make ends meet for themselves financially, to truly give your HOA the service quality you seek. That has been my experience so far. The fault probably lies in the system that encourages developers to create HOAs, which saves the city lots of money and headaches, but is poorly regulated, which generally means the homeowners are the real losers here. In some ways it is getting better, but it has a long way to go yet I think.
JaneK
Posts: 162
Posts: 162
Posted:
A Property Management company is not required by law in CA.
Jane
Jane
JoeK1
Posts: 37
Posts: 37
Posted:
A property management company is not needed by law, as that is a decision by your Association's Board of Directors (BoD). A BoD is needed to manage the affairs of the Association. While management companies can simplify things for a condo Board, they do not replace the condo Board. The Board still must meet to set priorities, review the budget, vote on major expenditures, evaluate management companies, etc.
Management companies can greatly help a BoD and should strongly be considered for larger associations, such as yours. They are absolutely essential if your BoD members do not have if the required skills, desire, or time needed to properly conduct Board functions. The level of service provided by a management company varies and you can do as much or as little as you want. However, you should recognize that there are many things that your BoD must do to properly manage the "business" of your association.
Shown at www.*********.com under the Contents section is a summary list of all the tasks that your BoD should consider doing -- either themselves or with the aid of a management company.
Good luck
JoeK
Management companies can greatly help a BoD and should strongly be considered for larger associations, such as yours. They are absolutely essential if your BoD members do not have if the required skills, desire, or time needed to properly conduct Board functions. The level of service provided by a management company varies and you can do as much or as little as you want. However, you should recognize that there are many things that your BoD must do to properly manage the "business" of your association.
Shown at www.*********.com under the Contents section is a summary list of all the tasks that your BoD should consider doing -- either themselves or with the aid of a management company.
Good luck
JoeK
HaroldS
Posts: 902
Posts: 902
Posted:
While not required whatsoever, you should realize that all the work done by a MC will have to be done by someone - your board members. Including inspections, violation notices and follow up. The MC as a supposed impartial third party makes that part of the job less stressful for the volunteer board.
Frankly why would anyone want to volunteer to take on all that work just to save the non volunteering members money? Burn out is quicker too, and you'll find others are not willing to take on the job. A good MC earns their fee, but the key word is GOOD. You need to interview carefully to get and pay for just what you want done.
Frankly why would anyone want to volunteer to take on all that work just to save the non volunteering members money? Burn out is quicker too, and you'll find others are not willing to take on the job. A good MC earns their fee, but the key word is GOOD. You need to interview carefully to get and pay for just what you want done.
JaneK
Posts: 162
Posts: 162
Posted:
BTW our association is relatively small, but the management company is 25% of our budget. Quite a bit of $
Jane
Jane
BrianB
Posts: 2,787
Posts: 2,787
Posted:
property management is not required by law.
property management will not solve the problems of a bad HOA, a bad HOA board, or bad CC&R's.
Property management can help some HOA's be better, but they are not a magic pill, nor will they solve all the associations problems.
property management will not solve the problems of a bad HOA, a bad HOA board, or bad CC&R's.
Property management can help some HOA's be better, but they are not a magic pill, nor will they solve all the associations problems.
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