Property Manager board member

Joe, I’m no expert but that sure seems a conflict of interest to me. The BOD is supposed to be directing the hired management company. He is, in this situation, essentially directing himself. There is at the minimum here an appearance of a conflict of interest and that is sufficient for some action to cause him to change his ways.

All board members have a fiduciary responsibility to the homeowners they serve. The boards’ directions to the MC must always be with that in mind. Who, therefore, is this gentleman actually serving?

Another of the BOD’s important charges is to enforce the CCR’s. They can not be ‘selectively’ enforced! This chap must be well liked to have served for 30 years and it sounds like he has not changed much with the times.

Good luck!

I miscommunicated earlier. As far as I know, the PM is not, in fact a board member. He does, however attend all board meetings and runs all meetings and is the Chairman. I don't believe he votes on any issues. If he were actually a board member, then that definitely be a conflict of interest. Nevertheless, I don't believe that the PM should be involved in board meetings unless he has business to discuss that concerns him directly. It seems that that could be a conflict of interest. Our bylaws state that the board may appoint anyone they wish to be chairman. Still seems wrong to me that the pm is also the chair.

Joe,

Same guy has been your PM for 30 years? That's a long stretch of service! Or do you mean the same Company has been your PM for 30 years?

Either way, is your HOA satisfied with the services provided, fees, etc.? If so, if the guy or company simply chairs the meetings, doesn't vote, and things have worked well for 3 decades, what's the underlying issue here?

Technicalities aside (yeah, I understand there're reasons for technicalities), if FUNCTIONALLY the wheels keep turning, and all of your Boards are/have been comfortable with the expertise provided, why rock the boat?

Perhaps all of your Boards do/have needed a leader who knows the ropes. Nothing wrong with that. As long as the Board retains the rights on all decisions, tossing a spannard into the works might hurt more than it helps.

Joe,
The reason that he might seem like a Board member is because the real Board members don't seem to take charge of the meetings, they are lazy, perhap unknowing how to be BODs, don't care or are overwhelmed. If he is doing a good job, some of the items that you mentioned that he takes care of, are perfectly right and okay for him to do.

My former Assoc, our P.M. sat at every meeting, gave reports, read letters from residents and took the minutes. It is the P.Ms job to send out or at least generate letters to the membership. The P.M. is the go to person for the membership. I see NO conflict of interest here. I see a guy who is doing a pretty darn good job and probably your association is getting a good deal for what you might be paying him. From many previous posts, many associations would love to have him as an employee.

Susan:

Thanks for your reply. He does, in fact do all the budgeting, handles all funds and keeps the books. He does everything on a "cash" basis. The budgets that he submits are not per GAAP (generally accepted accounting practices). They aren't very specific, merely reflect general line items, i.e. maintenance fees, gas, electric, etc. He never presents any receipts and never breaks down what is included in maintenance, for instance.

The secretary is also the treasurer and she does nothing r.e. the budget. He does it all. Also, she merely takes minutes at meetings and very poor ones at that. She frequently injects her personal opinion or that of one of the other board members r.e. certain issues.

One of the owners is a recently retired CPA and she has analyzed the annual budget reports from the last few years and she has detected some irregularities. It appears that, and I'm not accusing him....yet.....the pm may have had his hand in the cookie jar over the years. We are having a certified audit done, first time in the history of the association and it should be completed within the next couple of weeks. Until fairly recently, Michigan law required an annual audit by a CPA. The law has been changed to require only an annual review which will do little, in my opinion to ensure that our books are clean.

Thanks Susan!

Getting a Finance Committee set up is a great idea! However, that may be easier said than done. The board is lazy, they trust this guy implicitly and they have a "we've always done it that way" attitude. I'm newly elected to the board; I'm going to push for this.

Can you give me some reasons why we should have a finance committee so that I can respond to them? I'm sure they'll interpret the suggestion as me saying I don't trust the pm and most of them are on board with him completely.

One of the reasons would be accountability. Also, I may approach it by saying something to the effect that it isn't good for the pm to be totally responsible, too much opportunity for the wrong perception on the part of the owners, etc.

Joe

Two things strike me.

1 - You and all other property owners should DEMAND that there be an independent audit every year. So should the board members since they can be held personally liable. Yes, they probably carry insurance, but there may be limits if they are grossly negligent. And not getting an audit could well be considered grossly negligent.

2 - Are you really upset that a person parks their RV overnight getting ready for a trip? If so, I am glad you are not my neighbor. Our board is working hard to overcome such a legacy of being overly zealous on enforcement. While I understand your not wanting an RV parked, an overnight park just before or after vacation seems somewhat reasonable to me.

Kirk

Joe - you also need to "define" this PM's role. Has he been elected or appointed to the Board - or is it just "assumed" that he is "on" the Board?

Your Board is open to liability if a non-board member is making board decisons and setting policy without a board vote.

Fixing this is going to be difficult. You are bucking history and tradition here, and so - tread slowly and carefully in getting this PM back into that role.

Good luck!!