managment company employees Appointed to the Board of Directors

Started by RobertV3 • 1 replies • 989 views

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RobertV3 (Michigan)
Posts: 2

Posted:

I am currently a member of a HOA in Michigan that has mutiple employees of the Association Management company appointed to our Board of Directors by the Developer. The same company also manages the rental management program for the properties within the association. Is it 1) ethical and 2)leagal, for a paid employee of a management company to serve on a non-profit board when the board is responsible for hiring association and rental magement companies to manage the affairs of our association.

GlenL (Ohio)
Posts: 5,491

Posted:

Robert it is normal for the developer to place his own employees on a BOD to protect his investment until the development transitions to homeowner control. That is why most everyone here advises that a newly transitioned community change their management companies to one that doesn't have ties to the developer.

In fact Ohio has taken steps to prevent the homeowners from being saddled with any long term contracts signed by the developer prior to transition. Section 5311.25:

(D) Unless a contract or other agreement is renewed by a vote of the unit owners exercising a majority of the voting power of the unit owners association, neither the unit owners association nor the unit owners shall be subject to either of the following:

(1) For more than ninety days subsequent to the date that the unit owners other than the developer assume control of the unit owners association, any management contract executed prior to that assumption of control

(2) For more than one year subsequent to an assumption of control, any other contract executed prior to that assumption of control, except for contracts for necessary utility services.

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