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Subject: Property Management Company acting as HOA owners
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LauraS8
(Florida)

Posts:3


12/30/2018 9:55 AM  
I’m an 8 year condo resident and 1 year owner in my community. My first board meeting was this month. I found it odd that the Prop Mgr had a seat at the table with the 3 member board and the president kept referring to him for answers. Every time I email the pres she copies the Mgr..
They have managed here since 2005
The last year end audit was in 2009. We had to vote for an audit, yes or no. I inquired and was promptly told we would have one Q1 2019 regardless of vote.
In Florida, it’s required every three years so I’m concerned.
The complex is 270 units, took a hit in the recession (foreclosed units were rented by brokers and not fullfiling HOA $ obligation) but now solvent with all units owned, mostly investors though and no reserves. Apparently it was voted every year by proxy to not fully fund the reserves.
Assessments are coming up for roof replacement and I’m Not confident in this mgmt company working for us, it’s if we are apartments, which is what folks are saying they want to convert to. Assessments are going to be $180 month for 5 years and bids are back. I suspect the mgmt company is associated with the bank lender since he told me we had a loan from them in 2007 to maintain the property. I’m running for the board, election by proxy and meeting is February 2019. Current president is out of state 6-8 months a year and flies in for year end meeting. I think that’s the only way to get ahold of docs, contracts, etc. but afraid I’ve made too much noise already and won’t win.
any insight? Afraid I’m going to lose my place eventually. I can afford the assessments but not sure all residents can.
RoyalP
(South Carolina)

Posts:307


12/30/2018 10:02 AM  
IMO:

move

now

stop the bleeding

---

y'all should NOT need special assessments to pay for foreseeable maintenance expenses

if YOU want to devote your time and effort in an 'probably' in vain effort to correct years of mismanagement, so be it, but, remember YOU will be but ONE vote on the BOD

---

next time: CAVEAT EMPTOR
RichardP13
(California)

Posts:3193


12/30/2018 10:25 AM  
The subject title is "Property Management Acting as HOA owners". Your comment is that the president is out 6-8 months of the year. You are a 270 unit complex. If you are a condo, god help you.

With that being said, if the Board ain't running the place, who else is. Don't mean to sound condescending, but this is your first board meeting in 8 years? You are not alone in that after the financial collapse in 2008, many of your type of complex were swallowed up by investors a dn guess what, they are just looking out for their bottom line. If things are going well for the investors (owners) change is not something you are going to be looking for.
RoyalP
(South Carolina)

Posts:307


12/30/2018 10:27 AM  
Nor bank loans for routine maintenance.

LauraS8
(Florida)

Posts:3


12/30/2018 10:52 AM  
Thanks for the insight. I was a renter for 7 year and now an owner for 1 year so not eligible to attend for 7 years.
LauraS8
(Florida)

Posts:3


12/30/2018 10:57 AM  
The three current board members are useless and there are 3 openings now. I have 20 years in project management and FM & construction contracts. I have very little money down on the place and pay less then a renter on my all in note and HOA. I need to know what happens when people and investors do not pay. Do I get bought out? I want to avoid losing my place with a mortgage balance. Can’t find a condo attorney to consult with. They won’t talk to me I guess a conflict with company model. Ugh
RoyalP
(South Carolina)

Posts:307


12/30/2018 12:08 PM  
You are not running quickly
KerryL1
(California)

Posts:6045


12/30/2018 4:40 PM  
First, Laura, you seem correct to be concerned, but you need to separate out different issues form one another.

1. It is very common for property managers to attend and speak a lot about the complex. Do you have onsite management--I'm guessing your do, and with so many absentee owners and a useless board, the PM will know more about your property than anyone.

2. Reserves. You say they'e not fully-funded, but that's not unusual. what % funded are they?Is it try as you say that there are NO reserves? Or just not enough? Of course funds should have been accumulated in reserves today for roofing. But since they're aren't enough, owners will have to s pay a special assessment. This is entirely the fault of the board as PMs, at least the 4 I know of in my HOA's past 12 years, always have recommended to the board that more be collected for reserves.

3. How many directors do your bylaws say you must have? Or is a range stated, e.g., 3-9? Sure run for the board. Apply to the existing board to fill a vacancy.

4. What do you mean you're running for the board by "proxy?"

I don't comprehend some of your other statements, Laura.
KerryL1
(California)

Posts:6045


12/30/2018 4:40 PM  
First, Laura, you seem correct to be concerned, but you need to separate out different issues form one another.

1. It is very common for property managers to attend and speak a lot about the complex. Do you have onsite management--I'm guessing your do, and with so many absentee owners and a useless board, the PM will know more about your property than anyone.

2. Reserves. You say they'e not fully-funded, but that's not unusual. what % funded are they?Is it try as you say that there are NO reserves? Or just not enough? Of course funds should have been accumulated in reserves today for roofing. But since they're aren't enough, owners will have to s pay a special assessment. This is entirely the fault of the board as PMs, at least the 4 I know of in my HOA's past 12 years, always have recommended to the board that more be collected for reserves.

3. How many directors do your bylaws say you must have? Or is a range stated, e.g., 3-9? Sure run for the board. Apply to the existing board to fill a vacancy.

4. What do you mean you're running for the board by "proxy?"

I don't comprehend some of your other statements, Laura.
AugustinD


Posts:1271


12/30/2018 4:59 PM  
Laura, what fraction of the condos are owned by absentee landlords? The internet has a site or two cautioning prospective buyers to avoid condos with high rental percentages. E.g. see https://www.marketwatch.com/story/too-many-renters-are-a-bad-sign-in-a-condo-complex-2015-04-27 . Where I am, about half the condos are rentals. To me, it is the cause of inept boards and yes, the place being run like an apartment complex instead of respecting the legal rights of owners.

Regarding conversion of the condo to an apartment complex, I found the following from this past July interesting: https://www.chicagobusiness.com/article/20180713/ISSUE01/180719926/condo-deconversions-hampered-by-holdouts-in-chicago
JohnC46
(South Carolina)

Posts:7927


12/30/2018 5:49 PM  
Laura

It is not uncommon for a BOD to acquiesce to a MC. Typically done for several reasons such as:

1. The BOD does not want to play the "heavy".

2. The BOD Members do not have the time nor inclinations to manage as they should.

3. The BOD relies on the MC's expertise.

4. The BOD is inept.

5. The BOD is scared to make decisions, especially the hard ones like raising dues.

My prior BOD fell into all of the above, except #3, so we replaced them.
LetA
(Nevada)

Posts:579


12/31/2018 10:26 AM  
Laura, I feel your pain We have lived in our place in the last 7 months of declarant control. When the owners were elected and stated, they have never conducted the quarterly meeting. All meeting have been opened and closed by the property manager, nearly all questions, suggestions etc were answered by the property manager. I am on the ballot for one of two seats up for grabs. Hopefully myself and my neighbor who is running is elected, because all that will immediately change, even if if forces the 3rd board member to resign. Six years is long enough for the owners to take back their community.
CathyA3
(Ohio)

Posts:124


12/31/2018 12:10 PM  
Posted By LetA on 12/31/2018 10:26 AM
Laura, I feel your pain We have lived in our place in the last 7 months of declarant control. When the owners were elected and stated, they have never conducted the quarterly meeting. All meeting have been opened and closed by the property manager, nearly all questions, suggestions etc were answered by the property manager. I am on the ballot for one of two seats up for grabs. Hopefully myself and my neighbor who is running is elected, because all that will immediately change, even if if forces the 3rd board member to resign. Six years is long enough for the owners to take back their community.




Having a property manager as an active player may or may not be a problem, depending on the manager. Ours understands that she works at the direction of the board and does not try to make decisions that rightfully are the board's responsibility. However, she brings skills and expertise to the table that we board members may lack. I think that a lot of the time boards don't do certain things because they feel uncomfortable and out of their depth. Delegating some of the tasks to a skilled property manager makes good sense, as long as the board members don't use that as excuse to evade their responsibilities and the manager doesn't overstep his or her authority.

For example, our bylaws define each director's area of responsibility, but nowhere does it say that the individual directors must perform the tasks themselves. I (the introverted board president) hate to run meetings, but I can take minutes like nobody's business - our property manager hates taking minutes but enjoys running meetings. So we swap duties, allowing the more capable person to handle each. To an outsider it may look as though the property manager is in charge, but that is absolutely not the case. And the result is more effective meetings and better quality minutes: win-win.
KerryL1
(California)

Posts:6045


12/31/2018 4:03 PM  
Cathy presents some reasons why PMs might be very active at board meetings. Ours sits at the table with directors often with her supervisor. They write the meeting minutes and answer many questions from directors and owners too during open forum.

It does not mean the board acquiesces to the PM. It can mean everything Cathy writes. It also can be the contract with the PM & the HOA delegates numerous duties to the PM. Our HOA, for instance, has an onsite PM, who has a full-time onsite assistant. Our HOA's bylaws give the board the authority to delegate many duties that officers would normally do to the Management company (MC) and onsite PM.

It's not that we're very big, 200+ condos, but we are very complex twin high rises with three sets of reserves, a three part operating budget and lotsa mechanical/plumbing equipment and a fair number of amenities. So, we have vendors who provide us with a building engineer; 5 custodians and 5 security officers. We have other vendors who provide bug control, hardscaping, water testing, pool maintenance, gym maintenance services. We're surrounded by several other HOAs like ours and all have staff such as ours--sometimes more, e.g. valets, concierges, etc. Volunteer condo owners do not have the expertise or the time or interest to manage the day-today operations of these places. Instead, boards focus on planning and policy-making. Ours normally meets monthly.

Boards themselves always are ultimately responsible for decisions that the Board makes. Whatever authority the Board assigns to the PM, say authorizing expenses up to a certain amount, the board is still is responsible. The PM has no vote and only advises the board.

You seem to be condos, Laura, but no matter, I feel certain that your own governing documents or FL statutes give you the ability to request a copy of the contract with your MC & Association so that you can read for yourself what work the MC is supposed to do. With a uninterested board, it's very possible the contract gives the MC a lot of authority.
JohnC46
(South Carolina)

Posts:7927


01/01/2019 8:01 AM  
Laura

Is your PM also handle rentals in any way?
GenoS
(Florida)

Posts:2580


01/02/2019 3:44 AM  
An audit every 3 years sounds odd. Do your governing documents call for such? I ask because if they don't, the Florida condo statute, FS 718, dictates the level of financial reporting every year and that level is strictly tied to the association's annual budget. None of the statutory budgetary thresholds includes an "every 3 years" provision. Unit owners can petition for and vote on a different level of reporting, but that would have to happen every year, not every 3 years. I recommend you find a copy of FS 718 and study it carefully.

Condo unit owners can vote to waive or underfund reserves (again, that needs to happen every year) with a proxy vote, but voting for board members by proxy is forbidden by FS 718. You seem to have a wealth of work experience in areas that require attention to detail. That's good. I think the Florida condo statute, FS 718, will be your friend, but you need to spend some time studying it.
LisaD6
(Connecticut)

Posts:19


01/02/2019 8:59 PM  
When I came on the board three years ago.As president. We had no reserves contractors very expensive and a manager who felt she didn't have to tell me why the insurance jumped up 8000 in a year. If you have the energy go balls to the wall clean house get a good manager in and do everything to research and change everything. Thats what I did. I lived here 25 years at the time. was on the board many moons ago, have a finance degree and was an auditor. My father had a construction company so I was raised around how much things should cost to fix. Made sidewalks and driveways and much more. through the whole process I worked my butt off. did much free projects with me and a few other association members. Yep as you notice the board members dont even want to do things for free. I figured it out. Example planted 30 bushes ourselves.. I know the property value was going up when the garbage guy goes you did a great job with this place. The banks spies to check out their foreclosed condos.. commented how the value of condos is going up with what we did.
Its a hard job. and its all for free. Reason why I did it. I saw our fees going up 20 dollars a year for three years. The third year I made a promise to myself to do cut backs and dig into the financials, instead of increasing the owners fees. noticed double insurance payments, 12,000 a year going out to just pump and jet out our sewer system. Took me one time of the sewer back up and seeing the sewer pump area always filled to know we shouldnt be pumping out an area that already has a pump four times a year. We now have a sewer system that I hear the water flow out the pump inlet.. very odd sound. becasue we never heard that area running correctly.
IT has taken me three years. I had a vision and got many people to help me get to where I saw our condos good get to.

If you are into challenges and see a vision and can go for it and have the trust of the Association and the board members with a management company behind to answer and steer you in the direction of where to go next. Yes it can be done. Many boards let the management company do it all. In my condos experience it does not work. I even run all the meetings.. Last unit owners meeting I had all the financials to answer the questions.

My dream is to now have my night in shining armor to show up and take me out of the condo life. I never want to be in a condo if I can escape it. But while Im here I will straighten out the mess. 28 years here now. And guess what. 19 proxies later I am on the board as the president again and just yesterday.

You wont conquer it all in one day. you will have the hater unit owners who just have to have everything and constantly complain. Ignore them all and go for it. Good Luck. If you have any questions feel free to ask..
LaverneB
(Florida)

Posts:70


01/04/2019 7:56 AM  
Our Hoa went to management this past year. Why? Lazy board members(most of them). Management is there to make money NOT help the owners. Yes a member of the management can sit in at meetings. But only answer if a board member asks him/her to. Management is not the answer to a great run community. Just ask another community about it.Good Luck
CathyA3
(Ohio)

Posts:124


01/04/2019 8:25 AM  
Posted By LaverneB on 01/04/2019 7:56 AM
Our Hoa went to management this past year. Why? Lazy board members(most of them). Management is there to make money NOT help the owners. Yes a member of the management can sit in at meetings. But only answer if a board member asks him/her to. Management is not the answer to a great run community. Just ask another community about it.Good Luck




I firmly disagree. Property management is a profession requires specific knowledge and skills, and the good managers (such as ours) may have licenses that require continuing education and other certifications. Serving on the Board, however, typically requires no special skills or qualifications other than being a homeowner, and given the level of complaining we hear from homeowners, it's clear that this doesn't work too well much of the time. Then you have the practical issues. One, many board members work full time and barely have enough time to devote to being a board member, let alone managing their communities effectively. Two, many communities have trouble getting enough volunteers to fill all board positions; there is no way they would find anyone to take on even more work.

Yes, there are communities that are self-managed, and they make it work for them. For the others, rather than blaming "lazy board members", we need to look at "lazy homeowners" who won't do their fair share of the work and who then place unreasonable expectations on the few volunteers they have. Our property manager makes sure the lights stay on, the water comes out of our faucets, the trash gets picked up, contractors are supervised, tax returns are filled, our corporate status is renewed, and a whole host of things that the average homeowner wouldn't even think of. As a homeowner, I'd rather pay to have a professional ensure that these things happen, rather than rely on fellow homeowners who take care of things whenever they have time.
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