Reasons for fireing a Mgmt Co.

Started by NancyM2 • 10 replies • 1150 views

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NancyM2 (California)
Posts: 249

Posted:

"yep" Kirk, It's me again with a new question. Several years ago our board fired our Mgmt Co. ~~ Apparently without a "material breach" as we had to pay off the remainder of the Mgmt contract.
Again this was under the advise and direction of Counsel. She disliked then intensely as she said they were rude to her. When I was on the board back then in 2003 she would come up with all kinds of reasons why we should get rid of them. However when I looked into her charges they were either completely bogus or exaggerated. I spent the whole year putting out fires. When I left the board (for health reasons) just a month later they fired this Mgmt Co. I asked for the reason. We were told at a board meeting it was to terrible to discuss (it was a secret) When I checked with the previous Mgmt Co, they said they didn't know why either.

I suspect the reason was ~ This Mgmt Co had once told us that our counsel didn't know what she was doing as a HOA attorney. I think she found this out and was anxious to get rid of them. She had help from our then "board president" as this Mgmt Co was not our board president's first choice when we hired them. They then hired a new Mgmt co at zero hour without any RFB's put out. Low and behold the new Mgmt CO were friends of our counsel. We are now paying about double for Mgmt Co services. I'm not saying they are bad, but they certainly have our attorneys back ~"She is the goose that laid the golden egg"

My question would be ~~
Do the owners have the right to know why ~ when they fire a Mgmt CO.??

NancyM2

KirkW1 (Texas)
Posts: 1,665

Posted:

Well, my take is that they do if they have enough fortitude to demand an accounting at the annual meeting. If an issue gets under the skin enough, then you could either get an accounting or a new board. Personally, I would recommend the later.

I feel good because last night we saved $1100 a year on landscape maintenance. Of course that only works out to be about $4 a house. You association has the chance to cut hundreds of dollars per unit. Just have to fire the fat.

In fact, I don't think I would even bother going after an explanation. I would simply look to replace the BOD with people who have not drunk of the wine. Elect people with a mandate to fire the attorney and the ombudsman to bring costs under control. They might get to feeling good and find a lower cost management company while they are at it.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Your board needs to justify hiring one company at "about double" from its previous company.

In your discussions, don't mention names or the attorney. Just talk figures. Keep it objective.

The numbers don't lie.

They need to give a reason for approving the big jump in fees to a particular company. Also, be sure that the contract is gone over with a fine tooth comb.

RogerB (Colorado)
Posts: 5,067

Posted:

Nancy, from what you say the Association appears to be run by the attorney rather than the Board. If that is the case I would first get rid of those Board members and the new Board can get rid of that attorney.

RichardB10 (New York)
Posts: 20

Posted:

Interesting! Our problem is that the mgt. co is running the BOD because we have the village idiot for a president. In fact the mgt. co just controlled our annual mtg by getting dying person to sign resignation fron BOD and the nominated one of the OLD BOYS CLUB" to the board. What a discrace.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Richard,

IMO, this is one of the biggest problems with assn's that hire a mgmt co. to perform the day-to-day operations of the assn. Too many board members do not understand that they are in control and they should be giving orders to the P.M. not the other way around. I attended an HOA Training Academy a number of years ago and was shocked to hear the number of board members present say, "I didn't know that!" when this very topic was discussed. It all goes back to the problem of lack of education. Far too many board members just don't know how to perform their duties; don't know what's expected of them -- they just don't know how to run a corp and most have no where to go to get the much needed info.

DwightT (Idaho)
Posts: 664

Posted:

Mary - It's not just Board members who don't understand that. Often homeowners also think that the Board works for the PM. I've had several homeowners threaten to "report" me to the management company because they didn't like the way I talked to them or something. My usual response is to just give them the contact info for the management company.

DwightT (Idaho)
Posts: 664

Posted:

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dwight,

Very true!! It's understandable when the members aren't informed; but really uncalled for when the board isn't.

NancyM2 (California)
Posts: 249

Posted:

I agree with Dwight & Mary, many board members don't understand proper protocol. However some Mgmt Co's do offer classes. It is refreshing to read some of the responses from HOATalk ~ Makes me realize their are some pretty sharp board members out there. (wished they were on our board)

My original question was~~

Is the board obligated to tell the membersip their reason for discharging the Mgmt Co. ???

NancyM2

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By NancyM2 on 10/15/2008 8:55 AM
I agree with Dwight & Mary, many board members don't understand proper protocol. However some Mgmt Co's do offer classes. It is refreshing to read some of the responses from HOATalk ~ Makes me realize their are some pretty sharp board members out there. (wished they were on our board)

My original question was~~

Is the board obligated to tell the membersip their reason for discharging the Mgmt Co. ??? NancyM2

The answer is no; the Board is not obligated to advise the members on any decision they make. The members elected the members of the Board to make the decisions. However, if the Board is asked, I believe they should (not obligated to) provide an answer. If their reasoning does not justify the action the association members can get rid of those Board members who are not making sound business decisions. And if the decision(s) are based on poor advice from an attorney then get a new attorney.

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