Landscaping overpayments

So I'm an board in SC and I'm digging into our landscaping spending. Our contract with the landscaper is about $18000 year for mowing our common areas. The contract also states 5 times a year for retention-detention maintenance (5 ponds) at $3375 each month. I looked at the landscaper payments over the last 5 years and saw for 2021-2023 the landscaper was paid $3375 every month of the year. I asked the previous two presidents (back to 2021) and they stated they never authorized more than the contracted 5 times. The management company stated the landscaper submitted invoices monthly and they were authorized by the board. I still waiting on the landscaper and management company to answer me with who authorized that every month.

So who is at fault? The management company should have noted the extra $30k yearly spent on retention pond maintenance and noted the monthly authorizations over the contracted 5 times. A $3375 monthly service shouldn't be authorized by a single board member if it was authorized. Also the pay dates for the landscaping and the detention pond maintenance are always the same dates, like they were on automatic payments. The board additionally told the management company to stop any payments in Dec 2023 and the management company still continued payments to May 2024.

I feel the management company owes the community and then they can go after the landscaper for submitting unapproved invoices. I will have a CPA do an audit and I already found an interested lawyer. Any advice would be appreciated.

Fiduciary responsibility is one of the most important duties for the Board of Directors. Using a Managment company is to "help" the Board with this responsibility. The MC works for the Board. Monthly budget updates are to be available for the Board to review and ensure that expenditures are correct. In my opinion, it is the Board who has the most responsibility if there are landscaping over payments.

May be putting toothpaste back into a tube at this point. Make sure everyone reads the lawncare contract. Make sure it reads what it does.

I contacted a lawyer just to have one available if it comes to that, nothing paid to him. Yes, the MC manages community funds. With our MC they are very involved in the landscaping contract. Myself and a MC representative just redid the contract for this year and I removed any retention pond maintenance unless requested by BOD. I have been on the board since Jan and never heard of any board member needing to sign something.

Our PM company requires two signatures from board members for EVERY expenditure. There is no way these expenses would have gotten by our PM without signatures from board members, so the overpayment would be the fault of the board for not checking the payables. That's poor oversight from your treasurer AND your PM if they can't read a contract and understand the terms. They shouldn't just blindly be paying invoices.

Unless the contract was amended at some point, I would have your attorney send a letter to the landscaping company asking for a refund. Unless they can prove they actually performed the work, you have every right to recover those funds.

I agree with Tim: everyone is at fault.

We also have no way of proving whether this was a deliberate choice or miscommunication.

Along with others, I strongly encourage you to slow your roll with the lawyer and attempt to resolve this through accurate communication.

* Hiring a lawyer is the best way to spend much more than the amount of dollars in dispute.

* You'll lose what may have been a competent and reliable vendor.

* If your insurer gets involved, your community may be labeled "high risk" - and you'll see premiums shoot through the roof or you'll be dumped as a client. (See recent threads about other communities that are having insurance woes.)

* Your community may get a reputation - vendors do talk - and it may be hard to get other reputable companies to work with you.

A lawsuit is the gift that keeps on giving. A lawyer should be a last resort for a problem that can't be resolved any other way and for which the economics make sense (ie, the cost of going the lawyer route is justified by the nature and size of the problem).

Unfortunately, the board is ultimately responsible for payments and contracts. It sounds like this was an oversight that no one noticed.

While you may pursue legal action to recover the extra money paid to the landscaping company, make sure you get all the facts first.