Please Explain Property Management

Started by DorothyO • 21 replies • 1279 views

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DorothyO (Washington)
Posts: 293

Posted:

Hello all,
In my reading through all the posts, I have decided that I have no idea what the role of the "PM" is. We do not have this, and from what I've read, Amen to that! Is a PM an individual in a PM firm? Is the PM always the same one? Can they vote? What's the role of a Board if there is a PM? From what I gleaned, the PM is not a homeowner. What is the benefit of having an outsider make decisions? From what I've read, they seem to have an awful lot of control.

Yesterday, I had a former, disgruntled President say he'd rather see us go to a PM scenario. We have 41 houses, all owners, with the normal amount of compliance, complacency, complaints, but over-all contentment. Knowing him as I do, his bad experience has as much to do with his, how shall we say, own social retardation, and I use the latter word in its original context, delayed development, as the aforementioned. I told him based on what I've heard, complements of this site, I would keep volunteering being President for life before I would support our wonderful community being run by an outside management company.

What say y'all?

Dorothy

JaniceM1 (Georgia)
Posts: 27

Posted:

I live in a neighborhood of 1673 single family homes. We have a master planned community with a Tennis Program, an Activities Director and Golf. We have a PM. I lived through the builder transition and replacement of the PM and attorney the Developer had here. The PM firm we have now, we have been doing too much of their job and they have fallen short too many times.
Aside from that, there are many Management Companies out there that perform great. You have to find the right one. Also, the PM, themself, is important to have the right fit. We had a nightmare here with our former PM who took over the Board's role and tried running the Association all on his own. The former BOD Pres. was very weak and most BOD members could careless what happend.
It was ashame. Once the Board losses control, it takes a very long time to over come something like that.
We have looked into "self management", but a property this size it's darn near impossible to run with out one.
The Board is made from the owners within that community and they are responsible to take care of their community. The Board should be the voice of the Homeowners.
The PM's role is to ASSIST the Board and carry out the day to day tasks (inspections, bills, reports, project manager...). The PM can be someone hired from the community (I DO NOT SUGGEST THIS!), but it should not be a Board member who is also someone who votes. The PM is not be allowed to vote.
You can check with PM companies, most offer onsite (which we have) PMs and offsite (those who drop in).
But hey, if your community can run with a Board alone, why chage because of one bad apple?!

RogerB (Colorado)
Posts: 5,067

Posted:

Dorothy, the association is run by their Board not a PM. The job of a PM is to kprovide the day to day duties and to provide guidance to Board members who are not experienced and/or knowledgable in HOA operations. It can work with either self management or professional management; the choice is up to the individual Boards.

DorothyO (Washington)
Posts: 293

Posted:

Roger & Janice,
Your explanation of "assistance" sounds quite simple in theory. From what I read on this site it seems in practice this assistance mutates into something less benign. I can see why a community of hundreds to several hundreds homeowners, like Janices' in Georgia, would have to go this route. I mean, how else can something that large and complex be managed?

Our community has run impressively well for the seventeen years of its life, with only two lawsuits, both of which were resolved in our favor. We are definitely not candidates for outside management. I was just curious because of the seemingly entangled positions the Boards and PM's find themselves in, as I read on this site. Thanks for the insight

Dorothy

EllenS1 (Florida)
Posts: 1,148

Posted:

Dorothy,

A PM cannot vote. They operate at the direction of the board. They serve as an employee of the association.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dorothy,

First of all there are PM's that are self employed and may have a contract with the assn or may be an employee of the assn. Then there are PM's who are employed by a property management company, usually one specializing in HOAs, that the BOD has signed a contract with to provide certain services. If the board is displeased with the PM assigned they can ask for another PM to be assigned to them.

The PM is an employee of the assn, whether self employed or the employee of a prop. mgmt. co. As an employee, the PM does NOT have voting rights and should be taking directions from the BOD. What happens all to often is that the BOD "allows" the PM much to much authority which results in the PM actually managing the assn and the board members are only figure heads. This is very stupid on the part of the BOD because they legally are responsible for the operation of the assn.

With only 41 homes in your assn, being self-managed should not be an impossibile task. However, no matter how small the assn, being self-managed means having enough willing members to step up to the plate and be willing to manage the assn. -- aka be board members. And with that comes the possiblity of making enemies of all your friends and neighbors, etc., etc. If you don't have that, then no matter how small the assn, hiring a mgmt co is the best route to take.

DorothyO (Washington)
Posts: 293

Posted:

Mary,
As always I knew I could depend on you to clarify, clarify, clarify!

Yes, it is that sense of PM control I kept getting reading these posts that made me ask the question, "Who actually runs things?" So, why do you think that all too often the Board "allows" the PM much too much authority, resulting in that uber-management I was talking about? Does it come back to the same old thing of people not wanting, or those who have been not wanting any longer, to do the job of running the HOA?

I'm sure that within our little community there will always be the few familiar faces of those willing to take on this responsibility. Luckily, I don't count any of my neighbors as "friends." Certainly we are all quite friendly, have lively conversations, watch over each others houses when away. But as dinner guests? Or floating a river? Not so much. Nor do I lose much sleep over who may not like me. Enemies are usually made as a result of immaturity, personal agendas, partiality and stupidity. As long as I know I am fair and honest with folks, and so far that seems to be the general consensus of my style of management, I don't worry too much about making enemies.

For its seventeen years, our HOA has always been managed with a Board of three officers, and a three-member Residential Committee (our name for the ARC or ACC.) I know, after participating in this site for just a few weeks now, how extremely lucky we are! If I step down or don't get re-elected, the next President could be a complete nitwit who would upset the apple cart. And you know how we feel about our apples here in Washington state!

Thanks for your knowledge, Mary.

Dorothy

RobertG12 (Arizona)
Posts: 160

Posted:

Mary,

You point out the importance to know if the PM is an employee of the HOA or an employee of the property management company. This is a huge differece. Unfortunately your statement "The PM is an employee of the assn, whether self employed or the employee of a prop. mgmt. co." This is incorrect. If a person is an employee of a vendor, then they are not an employee of the HOA. Thinking they are same will lead you into trouble.

No matter what the PM is, employee or vendor, they still can't vote. Since I have not been where a PM has been given such authority, I just can't image how BOD allow PMs to run everything.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

I noticed my error after I posted the msg and didn't have time to go back and make a correction. Thank you!

Yes, the PM who works for a mgmt co is an employee of a contractor not an employee although the OML lumps both into the same category as far as confidentiality of employments info goes.

Like you, I've not witnessed a PM with the authority of a board members. We have a wonderful PM (one of the best, IMO!) and a very hands-on BOD, all very dedicated and willing to do their jobs. My former assn would be a different story. Knowing the current officers as I do I know they allow the hired bookkeeper to handle the finances and they pay no attention to anything. In this case, as with so many HOA boards, it's a matter of not caring and not wanting to do their job. It's so much easier to let someone else do it for them. IMO, it's only a small minority of boards who let this happen simply because they don't know any better.

KirkW1 (Texas)
Posts: 1,665

Posted:

One thing I would add is that mostly you hear of the problems here and not the success stories. There are many cases where a PM does a wonderful job and takes regular direction from the Board. Much of it depends on the right relationship being established from the start.

Along those lines at a recent conference I spoke with a BOD president who mentioned that he told the management company that they wanted to interview the person before being assigned to the account. This set the right tone from the start. She could rely on the BOD for direction and they could rely on her to carry that direction.

But both sides need to know what their role is and keep to the role. And unfortunately, often the problem can rest with the president of the association. If that person isn't effective at leading and communicating you will have problems.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dorothy,

I'm glad I was able to clarify the issue for you.

It's good that you're able to separate neighbors from friends, not everyone can do that. In a small community it's sometimes very difficult for people to put themselves into a position that might cause others to think unkindly of them, through no fault of their own, of course - just by virtue of being on the board. I asked a neighbor and good friend why she didn't speak out at the board meeting as she just did to me privately. The answer: I want to get along with everyone; I don't want to make any enemies! She wasn't a board member and certainly wouldn't make a good one with that attitude.

You have a good attitude and I do believe your HOA is lucky to have you! Keep up the good work.

KariL (Virginia)
Posts: 7

Posted:

Robert and Mary,

As you've read in previous posts by both Grace & I, our PM has been given almost complete control of both our Associations. She even had proxies signed over the "the office" and she voted the proxies at the Annual Meeting. Of course, she is also a home owner, so I suppose that would be her defense. After our last Annual Meeting (Nov 08), the community made a big stink about the voting (proxy) process. The Association lawyer explained in a letter to the PM that our proxy system was not valid and that we had to make the proper changes for the next meeting.

So any of you that have not had the experience of having the PM run the show....you are lucky. It's been a nightmare here, but it's slowly turning around.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kari,

Yeah, everytime I read a post about a controlling PM, I'm thankful for the one my assn has!

I'm curious to know in what way your proxy system was invalid. IMO, as long as proxies are allowed any member of the assn can solicit as many proxies as he/she can get. Some assn BODs require proxies be given to the board sec. I don't know if this is legal, but it does happen in many assn's. You said the PM had proxies signed over to "the office", does mean they were signed over to her? If so, as PM, she did not have the authority to require the proxies be assigned to her. As a member of the HOA she can solicit the proxies, but it doesn't appear she did this as a member, but rather as the PM. She needs to know what hat she's wearing at what time!! Hopefully one hat will be taken away b/4 too long. :-)

NancyM2 (California)
Posts: 249

Posted:

Mary
We seem to have a proxy problem related to our coming election (may 5th) Apparently a paid vendor/homeowner is distributing, and collecting proxy's with the proxy holders name left blank. Once he recieves these he can throw his votes for the current board that supports his paid position. Which hat would he wear at the "general election"

IMO this is "conflict of interest"

NancyM2

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

He would be the proxy holder. I don't understand you saying the proxy holder's name is left blank.

As a member he is allowed to collect as many proxy's as he can, as long as the bylaws allow proxys, and vote them however he chooses. This is his right as a member of the assn. As a vendor he has no voting rights. Whether or not a conflict of interest is occuring because this member is a vendor is another issue. This is one of the pitfalls that occurs when a member becomes a vendor. Many members claim there's a conflict of interest w/o knowing whether or not the board has dealt with the issue.

BTW, any member of the assn can collect as many proxies as they wish. IMO, you shouldn't complain about something someone else is doing when you can do the same thing.

NancyM2 (California)
Posts: 249

Posted:

Hi Mary
IMHO the proxy holders name is left blank because he had several of his friends distributing these proxy's, then returning them to him. Many of our owners are not in favor of his paid position, therefore his name on the proxy would raise a "red flag"

NancyM2

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

Doing it that way is misleading and very dishonest. Frankly, no name on the proxy would raise a red flag for me! If someone comes to my door asking for my proxy, I'm going to put their name on the form and sign it. I'm not going to sign a blank form. Anyone that does, is stupid, to say the least. And I'm definitely not going to give my proxy to someone who can't even come to my door, but sends someone else in his place. Just my opinion, of course. I'm a suspicious person.

You may want to get the word out a blank proxy should not be signed over to anyone.

EllenS1 (Florida)
Posts: 1,148

Posted:

Dorothy,

No PMs cannot vote. The company is an employee of the association and acts at the direction of the board. While many complaints are heard about management companies this usually results from owners being disinterested and uniformed. We probably do not hear enough about good management companies. And nobody can volunteer to be president for life. Check out your bylaws.

DorothyO (Washington)
Posts: 293

Posted:

Ellen,
Our Bylaws were amended January 2009 to abolish concurrent term limits, and to just have annual elections for one-year terms. We figured if an officer or collective thereof, is doing a good job, why be forced to get rid of them after three years? As well, if an officer is doing a lousy job he/she can be booted out after one year.

Dorothy

EllenS1 (Florida)
Posts: 1,148

Posted:

Dorothy,

This sounds good to me. Perhaps developers put in concurrent term limits?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Dorothy,

If the term of office is only 1 year then you don't have staggered terms which are really great because it provides for always having at least one board member with some experience and knowledge of what's happened in the previous year(s). There's a wealth of info to pass on that never gets recorded in the minutes!

MicheleD (Kentucky)
Posts: 4,491

Posted:

I have to agree.

We have only one-year terms and there is no way to stagger the terms.

It would be great to have continuity.

(In reality, we do anyway, since we rarely get "new" people running for the board. We have one-year terms, but there is no limit to the number of terms one may have as a director. Only have three-year consecutive term limits on officer positions. So it's sort of like a musical chairs in three-year increments on officer positions.)

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