Management Company education

Robert I can see no regulations about becoming a property manager in Alabama unlike other states which have more stringent requirements. Usually you would need a business license from the County and you can hang your shingle out as a PM -MC, then comes the hard part getting that first Association to trust you to manage them. P.S. there are online schools to teach property management.

Robert,

Some states have licensing requirements; others do not. Check out the local chapter of CAI; I know they offer courses in community management. Also check around to see if there is an organization of HOA property management companys. Unless you know something about managing a deed restricted community, you should think twice about just setting up shop. A property manager that knows nothing about HOAs is just as bad as a board of directors who know nothing. If you want to establish your company as being reputable, you'll educate yourself before taking on any clients.

Robert,

It differs from state to state. Florida may have stiffer requirements but I am unfamiliar with other states. I'm certain even though you say Alabama laws are vague they surely must have some sort of requirements.

Robert,

Definitely check out CAI.

Mary,

Then it is high time to change this. Let your elected representatives hear from you. Go to the press and let them know that you are not being represented, etc.

Robert unfortunately there are no HOA laws in Ohio (died without a vote) but the COA laws are quite clear on this. In addition to MC's Declarant's often leave Association's with long term contracts with other vendors like landscape, trash pickup, pool maintenance etc. usually with large penalties for cancelling them if they can be cancelled.

5311.25 Required provisions for condominium instruments.

(B)(3)(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.

Ellen,

We've tried to get a bill to require licensing for HOA prop mgmt co's and managers, but so far have been unable. I believe this will be an ongoing effort.

Glen,
Maybe this is a good place to ask this question: Personal views on whether a MC affiliation should be referenced in the documents?

Good idea or bad?

Just an observation, then a question.

First, I sense in implication of some kind that if the MC is somehow associated with the developer that after transition, somehow this is suspect.

Once the transition occurs, what benefit, if any, is or would the developer derive from a connection of any kind with the MC (I mean short of his actually owning it, which would then, of course, mean some of the profits would go to him).

I guess I'm not following the line of thinking that the developers MC would be bad for the HOA once transition occurs.

Second, I'm not sure in which documents, if any, an MC "affiliation" should be mentioned.

What is meant by "affiliation"?

Thanks, John.

I guess this is all coming from my perspective that, with the exception of one or two builders who have positioned themselves as "developers" when they are not, the majority of developers that I know have a vested interest in leaving behind a legacy of good developments.

Granted they aren't building neighborhoods and/or communities out of the goodness of their hearts, but, especially if they want to continue growing in the area, it seems it would be incumbent upon them to build . . . and leave behind . . . developments that will add value to their portfolio.

Most of these developers also don't want to be bogged down by the day-to-day minutiae of those developments. So it would seem to me that they would want a fairly decent MC to do that on their behalf, until transition.

That being the case, they probably do have one or two MCs with which they regularly do business.

The other exception to the above is probably the mass-market developers from out-of-state. I have seen a handful of those developments, and have seen some of the damage they have left behind. But that damage is mostly in the quality of their homes to begin with, and rarely does it get as far as having a bad board in place, since it's been my experience that they don't even bother with setting one up locally.

Okay, so we have a differing perspective, based on our respective life experiences.

I think.


I was wondering if you meant something more than just an "agreement" (which I'm assuming means "contract"?) Or whether they were, say, a subsidiary of the development company in some way. Either way, I'm still now sure why it would be something to rise to the level of including in the "documents" and I'm not sure which documents that info should go into, if a successful argument was made that they do (or should) go into "the documents."


Now, that particular comment I think I need to disagree with. I am of the strong belief that HOAs are not supposed to "govern" (If by HOAs you mean "boards"). It is my belief that the only expectation of the board of directors is that they "administrate." HOAs themselves (the actual organization or association body as a whole) to me, is the membership. The governing documents of the organization are what "govern" the membership (the entire body), individually and collectively. The board simply administrates day-to-day functioning of the association's business matters (which does include covenant enforcement).

Now, why is that an important distinction to me? Because the real power (not the perceived or "stolen" power that happens in some HOAs) actually lies in the governing documents. So it's really a matter of how effectively the membership uses those documents. Which does lead to your final point.


Now for this part:

As I said, I'm really not sure that developers want or even do get into the business of dictating how an association should be run.

I think some try to exert various control over the associations that might still be under their ownership more out of a desire to maximize their profit and minimize their costs or expenses, as opposed to any desire to bog themselves down with controlling groups of people they don't even live with.

I'd even go so far as to say a good deal of them don't really have any particular preference on some of the specific covenants they create. Many are poorly written, or simply mashed together boilerplates. Lots of times the covenants are more a requirement of the local municipality on what a developer needs to have to get his permits. Lots of times they use sections that made some developments successful and get rid of others that caused problems, which can lead to an odd Frankenstein sort of end document!

As I said, it's been my experience that a lot of developers do have a vested interest in leaving behind decent neighborhoods in order to maintain a decent portfolio.

No, Robert, actually I think we are closer in conceptualization that it appears on paper.

I'm just trying to figure out what you mean in terms of the MC being listed in the "documents."

I suppose you are not speaking about the actual governing documents, like the CC&Rs or the by-laws or the articles of inc (not that anyone would put something like that in the article of inc).

So, then, what is it you are trying to say?

I'm just trying to get a picture of what it would look like if it were deemed something that "should" be done.

It would seem to me that the Management Company would already be referenced somewhere, or else how would the board know to work with them.

I know you are just asking a Blue Sky question, but I'm trying to wrap my brain around it.

We have a sort of board member's manual. It lists all the policies and procedures and the R&Rs, and a few other things, like the phone numbers for the people who supply the mailboxes and the contact person for reserving a meeting room at our local government center.

Do you mean something like that?

Robert - I see this as a misplaced use of guidance. The CCRs are fundamentally deed restrictions on individual properties that establish the governing rules of each property as it contributes to the overall community. The idea of "managing" the deeded restrictions through guidance related to hiring management companies - if it belongs at all in a set of governing documents - belongs in associations by-laws, NOT in CCRs.

I fully understand your view of the importance of the association - management company interaction and relationship, but it's not deed restrictions that should control that, it's the logistical operation of the associaton entity that should be affected.

I agree with John, this is not something that should be contained in the CCRs, but rather the bylaws -- if any place at all. However, IMO, the reason you don't see this anywhere is because the BOD has been appointed to manage the assn. If the board feels a management co or property manager is needed to assist them with managing the assn, it's their duty to hire one. And, because the BOD is charged with this duty, (to manage) the drafters of the bylaws see no need to outline all the managerial aspects. The drafters place a certain amount of trust in the board members to know how to properly manage the assn, whether it be with the assistance of a mgmt co and/or PM or alone. I guess you could say this is one of the basic problems with HOA governance. Not all board members are capable of carrying out the duties that have been entrusted to them. But, IMO, no amount of state laws nor bylaws provisions can provide that capability. So, even if the specific duties were all outlined there would still be some board members who wouldn't get it right. IMO, there is only so much that can be legislated or written in the gov. docs.

Robert our Covenants specifically gives the BOD the power to hire a MC and to pay them; also OH condo law grants BOD's that right. (5311.081(B)(1)

Just to put it in some perspective, our lawn maintenance contract is the bulk of our annual budget. It's quite significant. It's not mentioned specifically in the governing documents either.

Roger,
Thank you for the post,
I am envious that our documents are not as concise as the things from your documents that you post here. I make sure our Board receives a copy. They may not acknowledge them but I bet they read them.