management contract

Hi, I am a new BD of a HOA in CA. I am learning to serve my HOA effectively and professionally. So may I ask you all seasoned BDs here to share your knowledge and experience on how to handle your management co and the contract with them?

In our HOA case, according to the state (CA) law and the HOA Bylaws/Decoration, "no management service contract can be allowed for a term more than 1 year except ..."

Since I am still a rather new BD, I don't have much knowledge about how the BOD handled the MC and the contract with them. But I do know that the HOA has been "under the control" of the same only MC for 30-40 years since the beginning of the HOA. I couldn't find anything recorded/mentioned about renewing/approving the management service contract every year (or sometime before). Is this a somewhat normal and usual practice for a HOA to acquire management service? Does your BOD change/renew/approve your management co every year? Or like our BOD that seemed to let the management contract automatically renewed every year?

BTW, I already requested the MC to provide a copy of the contract for review. Post new findings here if exist.

We renew our management company contract every 2 years. Our HOA is 10 years old. We changed management companies 4 years ago when we became unsatisifed with the management compnay we had a contract with at the time. While we aren't changing management companies we are renewing our contract with them which I feel is a good thing.

I agree with the other poster, if you're not having negative issues with the management company there may not be any reason to question anything.

I view management companies in a few ways...1)The professional services they provide...2)The cost of their services...3)The rapport the association board has with the contact person from the management company...4)The manner that our contact person deals with any and all homeowners who might contact the management company...

I would also add that #3 & 4 are very important. If the rapport and relationship is positive, your contact person can be a great source of knowledge and can also get things accomplished for the association.

Forgot to mention: you may read more of my our case in the thread: "Cost for financial review".

Hi Mary,

First I want to apologize to you and Richard for mixing up addressing your names in my post in another thread "Upcoming Board Election".

Now as I remembered from CA state law and HOA gov docs that the management contract is required to not exceed a one-year term and read your response, I went back to check the requirement and unfortunately I could only come up to this (in the Declaration): Section xx.yy "Management Agreements: Any agreement for professional management of the HOA, or any contract providing for services by ..., may not exceed a term of 1 year, renewable by the parties for successive 1 year period, and shall provide for termination by either party without cause ..."

And now I couldn't find the similar code in CA state law which I strongly remembered has a "unless ..." clause at the end. I have excluded the 'unless' clause for being inapplicable to our HOA and the MC at the time I read the code. I feel now it's critical to make sure the 'unless' clause is inapplicable. I would like to ask people here (especially or not, the Californian) for helping me find the state code under either Non-profit corporation law or Property law. Appreciate your help.

Contracts Limited to One Year

Virtually all CC&Rs have a one-year limitation on contracts entered into by the association. This limitation is required by the Department of Real Estate (Cal. Admin. Code, Title. 10, §2792.21) to prevent the developer from obligating the association to long-term contracts that may favor the developer but harm the association.

Once the developer has turned over control of the association to the membership, the CC&Rs may be amended to eliminate the restriction altogether or to change it to 3 or 5 year contract limitations depending on the type of vendor. This allows the association to negotiate more favorable contracts for elevator maintenance, cable TV service, etc.

Hi Julie,


My answers: 1) yes, 2) some, still searching, but keep contract as main issue, not approval of the contract, 3) ?, 4) ? (don't know have any audits), 5) association counsel??


My main and specific agenda for getting on board is on line with another new BD: to fundamentally improve HOA's finance -- of course it includes reviewing management.


Thank you for your suggestions. I already tried them, at least to some extent if not completely.

KW, there had to be some review unless the MC is still working for its 1984 fee. If you want a legal opinion you need to get the BOD to ask the HOA attorney or pony up the money yourself. If you want the MC gone, which is the impression I get then you need to make a motion to terminate the contract and get it passed in time to give the required notification. Just because the MC has been there since 1984 does not make them evil or controlling. If you have a specific complaint, quit dancing around and lets hear it.