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Subject: I find myself so angry
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LaskaS
(Texas)

Posts:89


11/21/2018 11:19 PM  
Our management company only provides accounting and bookkeeping. I.e. We have our own property manager and our own maintenance staff.

I am so disgusted with the management company. The owner only does things that are in his best interest. He knew gosh darn well that the previous board didn't have authority to spend money on the things that they were spending money on. Yet he refused to acknowledge owners who complained. He didn't confirm that the board president had board approval before she requested checks in strongroom. He was emailed and notified that the board president was acting outside of her authority.. And he did nothing. Now that the owners that were complaining are now on the board. He is trying to act like he had nothing to do with it.

I'm so sick and tired of people standing by when they know there are things going on that are wrong.. and then trying to claim they had nothing to do with it!... He may have not had the legal standing to stop the board.. but he sure as heck could have voiced his objection. HE DIDN"T!

I know we need to move forward,, and we are... But from the bottom of my bones,, I want to get rid of this management company,, if all they do is the books,..that seems to be pretty much a commodity service..


Does anyone know of any really ethical management companies, that don't just go along to get their check?? in houston..
LetA
(Nevada)

Posts:550


11/22/2018 12:26 AM  
On the other hand it sounds like you need a board of directors that don't rubber stamp everything the the MC does.
LaskaS
(Texas)

Posts:89


11/22/2018 2:32 AM  
actually,, our managment company does not dictate how to do things, they claim they just follow the board directives.. however, the managment company, given that they only do the books and accounting for us, should have some kind of obligation to make sure rules and approval requirements are being met before the management company just cuts checks because the president says so..!.. especially when they were given a heads up that there were serious questions as to whether or not the contracts that wre entered into were actually approved by the board, as required.
SteveM9
(Massachusetts)

Posts:3123


11/22/2018 6:53 AM  
the management company just cuts checks because the president says so.


Well, the mgmt company reports to the client. The client is the president. So if they want to keep the contract, they do what the presidents says.

Sounds to me like you need a new president, not mgmt company. The mgmt company is simply doing what they are told.
RichardP13
(California)

Posts:3130


11/22/2018 7:10 AM  
I will respond to what the OP stated, as that is the facts so far in hand.

He has a company that does their accounting and someone else who actually manages the association. There is a significant difference in the two relationships.

Your accounting firm won't have the contracts, the Board or the property manager will. How they cut checks is on the Board, not the accounting firm. The Board sets how the approval process goes. If the OP feels the president is overstepping their authority, the other Board members need to rectify the way things are done.

I have a process similar to Strongroom that the Board would approve invoices. All invoices are put onto a portal where all can view, but only two are required to authorize payment.

You should check contracts for HOA management and association bookkeeping. The president speaks on behalf of the association. If you don't like those arrangements, you need to make changes internally.
MelissaP1
(Alabama)

Posts:7762


11/22/2018 7:13 AM  
Our "MC" was just did our accounting. They processed the checks. We had a 2 signature system on each check written. 1 the Accountant (MC) and then 2 board members (account approved) had to sign EACH check. They wrote out checks for the regular bills like electric, insurance, and contractors. However, if we had a decision/expense the board had to have had it in the meeting notes it was voted/approved. The MC then asked us if it was approved and noted. (They aren't members of the HOA technically). They then wrote out the check and we went through the 2 signatures system.

We also then discussed it in the Expense reports at each meeting. That way everyone saw why the check was written and see it noted. Sometimes special conditions existed like emergencies or natural disasters. Those situations were sometime dealt with just the board members due to time restraints/needs. However, they were always announced openly and not hidden.

So it's time to change the culture of your HOA. This was NOT the way it was done before I took over. So it's up to you and your new owners to get on board on changing things.

Former HOA President
AugustinD


Posts:1208


11/22/2018 7:16 AM  
Laska, do you have a majority of the board that sees this as you do? If not, try to live within the facts that (a) this President is violating the covenants and likely state law; and (2) the management company will remain. You are not alone in your anger with incompetent managers and HOA presidents. For HOAs and even city councils, I think it is fairly common to be stuck with mediocrity or outright unlawful conduct. I try to imagine if things could be worse. Usually, things could be. It helps me to accept not-very-bright people for managers and board directors.

Regarding to whom the manager answers to: You are correct that the client is the HOA, legally represented by the Board, and so often a Board majority. But it is pretty common for volunteer Presidents to get sick of massive debate over every little thing; throw out the legal process required; and just give orders to the manager. Or in some cases, Board Presidents are clueless about their legal obligations. They let their ego overtake decision-making. They rationalize that they are doing all this labor for nothing so darn right they will do as they please. Then the competent Boards will get rid of the President, or a non-apathetic membership will vote him/her out.

Of three HOAs now, one was run as well as City Council. Not outstanding, but I could trust them for all the big decisions. The other two HOA boards were consistently mediocre, with the president making the bulk of the decisions and abusing HOA resources in his favor.
LaskaS
(Texas)

Posts:89


11/22/2018 9:47 PM  
yes,, we just took over the board,, i'm talking about how the previous board operated. what Melissa said would have been perfect... if the mc had verified with the board that the payment was approved.. however, in this case.. the president was actively trying to circumvent the checks and balances. the previous board didn't know the money had been paid out until it was gone. everyone was asleep at the wheel. or literally not paying attention..

It won't go on like this anymore.. however,, I know the MC knew that things were right.. and I personally as well as other owners contacted him and told him so.. he simply rebuffed us...
Now he is claiming that he wasn't required to make sure there was board approval.

well this is bs.. because a year earlier,, this very same thing happened.. and hbe refused to release a payment until he had unanimous board approval in an email. then,, it turns out,, he got board members responses,, but it wasn't unanimous, but he released the payment anyway, because he didn't bother to verify that unanimous consent was given.


The new board president is much more non confrontational than I am. However.. in this case. after all this money and fraud was happening,, I can't just put it all behind me.. I want those that knew or should have known .,that the previous board was violating their legal authority , not following the policies and procedures and internal controls , etc. , I want to fire them! I know that maybe right now, right after the transition when a new board took over, is not the right time.. But I do not want to let this slide..

yes this mc does a professional good job.. if nothing is out of the ordinary, they do fine.. however.. we need vendors that know how to handle out of the ordinary situations.. who know how to protect the hoa.. and not just cowtow to the board.
LaskaS
(Texas)

Posts:89


11/22/2018 10:06 PM  
I meant to say in the prevoius post,,

our current mc performs adequately and provides accounting and books managment.. but anymonkey could do that with the right software. They don't review anything, they don't catch errors.. They don't actually review the data.. they just regurgitate it. I want to call him out. I want to ask him, point blank, why didn't he follow his own policy and verify that all board members had approved payments. before he cut the checks!.
SteveM9
(Massachusetts)

Posts:3123


11/23/2018 7:04 AM  
I want to fire them! I know that maybe right now, right after the transition when a new board took over, is not the right time.. But I do not want to let this slide..


Might I suggest you go to board meetings to ensure everything is done right. And if its not, speak up. Its not going to happen by itself.
YoungP
(California)

Posts:11


11/23/2018 7:04 AM  
Dear LaskaS,

Unfortunately your situation sounds similar to mine. The former board president and former property manager were essentially running the HOA by themselves; the other board members were asleep at the wheel.

I suggest you do the following:

1. review your association's governing documents (ie CC&Rs, by-laws, etc); you'll want to pay particular attention to how the board is supposed to function (ie check approval process)
2. review your service agreement with the MC; again, pay attention to how the board is supposed to function (ie check approval process)
3. document any irregularities (dates, times, incidents; save supporting documentation)
4. usually a professional (realtor or accountant) will have some professional affiliation; review their professional standards
5. file a complaint with the appropriate credentialing agency (in your case, it would be breach of fiduciary duty).
6. hire a new MC
7. consult with your association's legal counsel

Generally speaking, I would say other board members would be reluctant to confront other board members (after all, everyone lives in the same neighborhood). And if money was spent on legitimate needs even if it didn't follow to correct process, some would argue there's no harm or foul.

unfortunately there might be a situation where a board president and/or property manager drunk on a power trip will expose the association to tremendous financial liability.

but just keep in mind one thing: no matter what you do, even if you're trying to remain faithful to the CC&Rs, you'll still get all the blame for rocking the boat.

good luck!

Park


SueW6
(Michigan)

Posts:354


11/23/2018 8:11 AM  
First part of your post;
"The owner only does things that are in his best interest."

WHOM are you talking about?

Do you have a turnover from the original owner/Builder?

LaskaS
(Texas)

Posts:89


11/23/2018 10:15 PM  
sue , I was referring to the owner of the management company.
SueW6
(Michigan)

Posts:354


11/24/2018 11:00 AM  
Where is your treasurer during all this? That is the person who directs the MC to pay bills that are not within a budger or that outside of the budget.
JohnC46
(South Carolina)

Posts:7865


11/24/2018 1:08 PM  
Posted By LaskaS on 11/22/2018 10:06 PM
I meant to say in the prevoius post,,

our current mc performs adequately and provides accounting and books managment.. but anymonkey could do that with the right software. They don't review anything, they don't catch errors.. They don't actually review the data.. they just regurgitate it. I want to call him out. I want to ask him, point blank, why didn't he follow his own policy and verify that all board members had approved payments. before he cut the checks!.




If an MC had to verify that all BOD Members approve each and every payment nothing would get done and were I the MC and you put this restriction on me, I would fire your association.
GenoS
(Florida)

Posts:2518


11/24/2018 2:57 PM  
Posted By LaskaS on 11/22/2018 2:32 AM
actually,, our managment company does not dictate how to do things, they claim they just follow the board directives.. however, the managment company, given that they only do the books and accounting for us, should have some kind of obligation to make sure rules and approval requirements are being met before the management company just cuts checks because the president says so..!.. especially when they were given a heads up that there were serious questions as to whether or not the contracts that wre entered into were actually approved by the board, as required.

If all they're doing is bookkeeping and financial reporting I think you're expecting too much. We have a "management company" but all they do is our books, accounting, financial reports, accts payable, accts receivable, and like that. Routine stuff. Expecting them to make judgment calls or to render advice on what's proper or not is way out of scope.
JohnC46
(South Carolina)

Posts:7865


11/24/2018 3:09 PM  
Posted By GenoS on 11/24/2018 2:57 PM
Posted By LaskaS on 11/22/2018 2:32 AM
actually,, our managment company does not dictate how to do things, they claim they just follow the board directives.. however, the managment company, given that they only do the books and accounting for us, should have some kind of obligation to make sure rules and approval requirements are being met before the management company just cuts checks because the president says so..!.. especially when they were given a heads up that there were serious questions as to whether or not the contracts that wre entered into were actually approved by the board, as required.

If all they're doing is bookkeeping and financial reporting I think you're expecting too much. We have a "management company" but all they do is our books, accounting, financial reports, accts payable, accts receivable, and like that. Routine stuff. Expecting them to make judgment calls or to render advice on what's proper or not is way out of scope.




Our MC does as yours does at about $400 per month for 112 standalone homes. I think Laska is expecting to much from their MC. Our MC will offer advice when asked but they make no judgement calls.

I also think Laska's association had tough, multi faceted problems that their BOD may not have able to properly handle and certainly not handle to Laksa's satisfaction.

We shall see what happens now that the shoe is on the other foot.
GenoS
(Florida)

Posts:2518


11/24/2018 3:51 PM  
Posted By JohnC46 on 11/24/2018 3:09 PM
Our MC does as yours does at about $400 per month for 112 standalone homes. I think Laska is expecting to much from their MC. Our MC will offer advice when asked but they make no judgement calls.

Compared to us, you've got a bargain. We pay $680 a month for 100 homes (some duplexes, some stand-alone). They routinely tack on other "copies, supplies and postage" charges that brings the total closer to $850 a month. We're going to have an actual bona fide full-service management company after the 1st of the year and we'll be transferring the bookkeeping over to them, too.
GeorgeS21
(Florida)

Posts:796


11/24/2018 5:07 PM  
Wow - I am surprised at the cost ... I would think 100 homes plus or minus would be easy to maintain data on with volunteer board and officers .... I am talking about single family houses - not experience with condos.
GeorgeS21
(Florida)

Posts:796


11/24/2018 5:07 PM  
Wow - I am surprised at the cost ... I would think 100 homes plus or minus would be easy to maintain data on with volunteer board and officers .... I am talking about single family houses - not experience with condos.
GenoS
(Florida)

Posts:2518


11/24/2018 5:50 PM  
When the board operates on the ADALAP principle ("Always Do As Little As Possible") I'm afraid even that much is too much for them. Currently 6 board members and only three of them own a computer. One is fluent with spreadsheets and word processing. They'd need a full semester's worth of training and coursework to learn QuickBooks. Until 5 years ago the treasurer, a CPA and retired controller for an airline, was keeping the books with pencil and paper.
JohnC46
(South Carolina)

Posts:7865


11/25/2018 9:28 AM  
Posted By GeorgeS21 on 11/24/2018 5:07 PM
Wow - I am surprised at the cost ... I would think 100 homes plus or minus would be easy to maintain data on with volunteer board and officers .... I am talking about single family houses - not experience with condos.




Yes when one is willing to step forward and do the work and therein is the problem.
RoyalP
(South Carolina)

Posts:203


11/25/2018 11:01 AM  
my HOA = 126 fee simple homes

we use quickbooks pro

we have BOD dedicated office room in clubhouse

treasurer job = 6-12 hours per week EVERY week

(data still must be INPUTTED manually)

ASSUMING

computer literate person willing to learn quickbooks

IMO:

less than 90 homes/units = easy

more than 170 homes/units = too much work, needs 'farming out'

90-170 homes = 'nightmare' scenario, enough homes to make a LOT of work, not enough to financially justify farming out
GeorgeS21
(Florida)

Posts:796


11/25/2018 2:10 PM  
Our simple 189 single family home neighborhood with almost no amenities has a treasurer who puts in about 2-3 hours a week - maybe less - and, this is doing multiple billings for our incredibly whacko governance structure - voluntary HOA membership, but mandatory covenants.

He uses Quickbooks.

He puts in more time when prepping for the Annual Meeting ...

I didn't include the time at the Board meetings.
RoyalP
(South Carolina)

Posts:203


11/25/2018 2:24 PM  
i will venture a guess as to your actual (voluntary) dues paying membership

? 70 ?
GeorgeS21
(Florida)

Posts:796


11/25/2018 7:39 PM  
Laska,

If you were to ask how many of the 189 actually paid dues - the answer is 115 - the other slugs are on our list to engage more fully.

Our treasurer is not overworked at all - he is about 75 yrs old and works full time, in addition to being the treasurer.
LaskaS
(Texas)

Posts:89


12/03/2018 11:34 PM  
john i'm not talking about each and every payment,, come on, give me a break..

I'm talking about payments totaling almost 300,000 that was for questionable contracts with no oversight and no checks and balances.
LaskaS
(Texas)

Posts:89


12/03/2018 11:40 PM  
stevem9,,

I'm now on the board. I'm absolutely at every single meeting... the new board are all very much involved. the problem is, the previous board mostly didn't do anything they were supposed to. and anytime they were questioned, they spent their time making sure we(the owners who recognized the incompetence and wrongdoing) were blamed for problems and delays.. .. Only have almost 800,000 was wasted, with little of the actual necessary hoa work having been done did the other owners finally realize that we were right all along ..
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