Problems with Condo Associations

I am new to the site; I am searching for information, direction and advice. I will attempt to be as brief and concise as possible. I live in a community of less than 300 condos. I just recieved notice in the mail that the board unanimously vote to self manage. Apparently, this has been a goal for the council for than a year, but it has never been address in any minutes from meetings. need less to say, many of us home owners were floored. I am deeply concerned.
Here are my concerns presently, all with a management company at present: the property manager (who is also a homeowner) instructed the management company to charge the late fee of $25 for any condo fee received after the 11th; our bylaws state in several places it is the 15th. Several homeowners contacted the management company with documentation. Management company went back to the PM and the response was well, it has alway been the 11th!! Which would be against bylaws, correct? So, the PM has been assessing late fees that go against of bylaws and incorrectly charging her neighbors. Next item: property manager(home owner PM) told several of us that a special one time assessment of 37 dollars if not paid by the 11th(!!) would be charged a late of 25 dollars. According to condo docs it is 5% late fee, the 25 dollars is for month condo fee, the original late fee amount was a percentage of the monthly fee , but this was codified a few years ago to a 25 dollar flat fee which is close to the original percentage. I told the PM this was usury. to charge $25 on a $37 bill is 74%. Our condo docs are pursuant to the state code which indicate a fee of no more than 18%. I have other incidences where this PM's integrity has been called into question. If one takes the current situation and then adds into it a self managed council, I am afraid the result will be disastrous.
there is no absolutely no transparency. I think many homeowners feel they are being dictated to; that we are held accountable to the bylaws but the association is not. I do not feel that any of the council are corrupt but over zealous. The PM has me extremely concerned for she violating our docs and imposing financial penalties are her very own neighbors.
Please any insight would be most appreciated.

Hi Megan,

Welcome aboard! My thoughts are that an asociation as large as yours should never be self managed. It's way too much work for a handful of volunteers to accomplish with any degree of success, no matter how dedicated they are. A professional management company, (not an owner/manager as you have, another bad idea), would be much better for an HOA as large as yours.

Most management companies will handle the billing and receipts, have customer service people to receive calls from the members, prepare the Board booklets and financial statemenst for the Board meetings, handle documentation required by various government agencies, obtain bids and supervise repair projects and generally work as the facilitor between the membership and the Board of Directors.

In your situation questioning the date when the dues are considered late, a professional manager would take one look at your documents and agree with you, if your statement is correct about the dues being late after the 15th of the month. If the current property manager can't figure that out, then you're working with a poorly trained or inexperienced manager.

To get changes made, you and the other owners will have to speak up and press the Board to abide by the rules of your HOA. It's often not easy to change things that "have always been that way", but if you know you're right and have the documents to back you up. it can be accomplished.

Good luck and let us know how things work out.

Megan, If you are in an area where there are multiple Property managements companies, visit each and get some written information on what each offers. I really suspect your Board has already done that and should be prepared to recomend to the "Council", the council is usually considered to be the owners and the total of all members is the Council of Co-owners, the Board is the Board not the council.

Your appraisal is, by law of averages likely to be pretty close to accurate and what you point out are repeated time after time in HOA's.
Not uncommon for the relationship between council and board to be strained, and of course, you want to avoid this as it is counter productive. Give this some thought.

The obligation of all the owners, board and council is to the Real Property. The Board has no mandate to insure you have a democratic society. It does have a Fiduciary responsibility to insure the health and welfare of the Property and so does every other member agree to protect the Real Property. Looked at this way the natural action to be democratic and all things to all people fade. All decisions are then made clincally and not emotionally. This is hard for people to accept because they don't like to hear it, but it is true, and much more reasponsible than majority rules. Majority doesn't rule, especially in a condo where the vote is apportioned and nearly all condos should have apportioning. So from the get go, democratic rule is in trouble and impossible. In a Condo, you own the right to live in and buy a designated area, and sell this right. All else is owned jointly and each is responsible, but not equally. The decisions of whether you are going to have a self managed or property management is not a decision made on what who thinks what. It has to be a decisions on what is good for the Real Property and no way with this many members is the real property going to be served by self management. Most folks will agree with most of what I am saying, I think I am right.

Anyway if, at the meeting, if things deterirate to the Board playing dictator, make them aware of what they are doing and try to insert some of your objections into the written minutes, you will probably need them in the near futrure if you are going to turn the place around. Certainly don't get off on the wrong foot with the Board, it will take time and effort to get to where you want to go and the more folks on your side the quicker chance takes place.

The elected members of your council are your Board of Directors.

answers:
1: yes we have governing docs. there is a specific law called the unit property act; this is referenced in our docs.
B to my knowledge, the association is NOT an inc. at least not yet. The self managing was just announced. The council has legal counsel and I am confident that they have been advised about the importance of non profit status and becoming inc'd.
C: yes to the master deed, declaration and charter.
D: yes to the bylaws and rules and regs.
e; currently, we are sending our fees to a management company. As a third party they have informed the bard that the board can not access late fees until the date specified in the docs. The board told then MC to do it anyway and the MC refused.
However, the contract with the MC ends next month. After that a resident will be collecting the fees. Apparently, she has been hired. This information was divulged in the letter the homeowners received informing us of the self-management. Even though this service the resident is providing is limited, fidelity insurance is required??? What about anything else?
F: financial reports are included in the minutes, however, I have not seen a budget in over a year.
G: There are minutes, but I have not been getting them. I had to contact the MC to have them send them out. The Property manager is responsible for this. It seems that many in the community are not getting them either.

I agree with you that I have no idea. I have enough information to get my self into trouble!! While I am not a lawyer, I think my understanding of the condo docs is pretty good, that written, it is certainly possible that another interpretation on some points may differ.

I am a little hesitant to call the president, but I see that it is a must. The Property manager and i have had a row regarding her interpretations of these docs. Specifically the late fees that are being assessed. i want to make this clear. I am not delinquent on any dues, however if the condo docs stipulate a certain procedure than lets follow that. If it is not liked then lets amend it.

I can not stress enough my reservations. The new part time accounts receivable position has been filled by a board member. In one portion of this letter it says "volunteers; another portion says "hired". Is this splitting hairs? Perhaps, but this all goes back to " where is the communication"?

i appreciate all of your insights. I am cramming as much information in, as I possibly can. There are most definatly gaps in my education. When I attend the meeting to speak up, I want to have as much information as possible. I am not looking for a witch hunt. I am looking to what is best for this community and its property values.
Also, I have this foreboding feeling from the way that things have been handled in the past that have not been discussed that this sentiment may apply: " power corrupts and absolute power corrupts absolutely. I am open to being wrong on this account and would fully embrace it.

As always, thank you!!

robert, i agree with you and sympathize with Megan. her board is out of the loop, out of control, out of their minds. they need a reality adjustment, one can only hope it comes sooner, and cheaper, than later.

On the other hand, it should be of some comfort to know that the HOA is improving the resale value of her property. that's what HOA's do, right? So if nothing else good comes from this, megan can at least hold on to that thought as all else around her crumbles.

the condos around here suffer from the conceptions pepole have of the condo association. Good, bad or indifferent, when you buy a condo you get the whole enchilada. That written, ours is a great community, but the bad management companies have taken their toll. So much repair has gone on since I moved in it is unbelievable. I don;t know really what else is left. So, from that stand point the association has done well. But there is not nor has there ever been communication. You write of committees. ha ha ha hah what are those? We don't have those.
here is a question: the closed meetings: are those minutes or agenda or even topics made public?
I am just really concerned about the future. With such a high condo fee for what you get, I think a lot needs to be reined in.
I mean how do we as a community know if our council has bitten off more than they can chew? Aren't they reading the same material as I am??

Megan, Minutes are to reflect what actions were taken by the Board (Council). Regards closed meetings: It is possible that you have a state law that states all meetings in association will be open meeting. In my state (SC), there is no clear reference to open meetings. That will be addressed formally this April and with luck our present custom will be changed by vote of the council (members here), It probably will require an amendment but maybe not, we'll see.

The action of your Board (Council) to switch to self managememt is reckless, IMHO. It should be aired throughly by a members, not just at a meeting or an e-mail announcement, but individual contact with each owner. If you are incorporated in the state, I doubt it is legal to do. I am sure a good read of your documents and anything the state requires would prove to be fruitful. It is absolutely the wrong thing to do to hire any owner to handle money, especially a former Board member.

If you know the name of their attorney, you might contact him and ask if he has sent a written opinion of this self management. Also ask the Board to see the copy of the Lawyers letter. They probably will fight you on this but you have a right to see this correspondence or any other Regime records. Are you dues and fees apportioned? Are you located in a city limits. The city and county may have some juridiction over your Association.

A great community (your description) would not allow the Board to act in this manner. Maybe there are others interested in what is going on and you don't know about it. All Boards have to make an effort to communicate. Lot of times the reason they give for not informing the owners is the apathy of the members. That is not a valid explanation as it is their mandate to extablish effective communication, but this apathjy is common and a heavy weight on the association that costs everyone money day to day and big money in the long run.

Have you been to the court house to look up your initial documents, copy them and see how they compare with the ones you operate under and check your state on line services to look for your regimes name under business list or corporations. Also check you Court record of the county to see if there are past court cases or active one and see how many entry have been made with your Regimes name on them. Check your developers name and see if he has any ties with the Regime.

If you can contact ten neighbors that are interested, pool some money and pay some other lawyer to give you an assessment of what is going on. Your local BBB may be able to help there and also check your Regime name withe the BBB for information. In formation is power, the more information the more power.

MeganM1 - Just want to comment on your statements about the minutes. Mailing them to each owner may not be a requirement. If your governing documents require it, than you should be provided. Or if your state law requires it, than you should be provided. However, typically minutes from previous meetings are to approved at an open meeting, filed in the association minute book/binder, and then, and here's the important part, made available to unit owners. Available means posted in a prominent location. Typically owners can provide requests to the MC or Board to have access to the minute book for their review.

Given your post, and what I believe to be the broad violation on a top down, bottoms up level, I strongly suggest the non-board member owners gather, mail a written petition request from more than a quorum of the community to each Board member's home address certified mail return receipt requested. Include a comprehensive outline of what you want to occu, and the volunteers that are willing to form the committees necessary to accomplish that end. AND make clear that failure to accomplish your requests will be considered a breach of fiduciary duty and will result in the removal of all Board members, all at the same time. Time to organize, take control, volunteer, step up to the plate by all owners. Otherwise, it's one or two leading the brigade and that will eventually and logically peter out.

MeganM1: Apparently, your Condo Board is trying to trim the fat from outgoing expenses and have made the decision to eliminate one large expense by managing association issues themselves, rather than paying a management company.

Rather than belaboring this issue, why not try to support the Board in their decision? It does sound like they want to be wise in their spending efforts and have chosen this as one way to do it. Granted, it may not be the best and most efficient way, but the Board will have to find that out themselves. Without benefit of a management company and a property mgr. the Board will learn quickly of the many pitfalls which can occur. But, sometimes experience is the best teacher.

Wish them well, hope for the best, and just maybe, within a few months time the association will learn that the Board is doing a good job, and it was a wise decision to save money by not having a manager. Time will tell the tale.

MeganM1 - I do believe the members need to support the Board in their decisions. However, given the details of your post, I think the members would be doing themselves a disservice if did not communicate their wishes to the board, en mas. I too am a bit conservative when it comes to my #1 investment. In my association self-management is a decision that must be voted approved by 70% in favor of the community.

That was some response Robert! I have no other personal agenda other than this is my home. So you all know, I am the pain neighbor who reads her docs and doesn't get involved. I stay out of the politics of all of it. But I don't think I can do that anymore. I have a bad feeling about what is happening, all I am looking for are answers. That is it.
I will bring up the information I have found and asked the board to answer them. I will not be accusatory, surely there is no harm in asking, and if everything is above board, which I hope they are, there should be no problems.
I apreciate all of the information. you all have helped about immensely.
Thank you!!

Paul,
this is an excellent idea. A newsletter would be the perfect answer. I will offer this up as a suggestion.
I want to thank you and everyone else who responded. The information that you all have is incredible. every reply has provided me with information and perspective.