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Being Sued

Started by KrystalA • 10 replies • 1828 views

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KrystalA (Iowa)
Posts: 60
Posted:
Well our association is being sued for non payment of management fees. Of course we have their money in an escrow account and more than willing to pay once we are given all of our property which they decided we won't get all of it. Some things they "just don't have" and other things they won't give us because "we could manipulate the data" and then sue them.

We tried to work out something, but some members of the board are "A personalities" and refuse to negotiate - same with the Association manager.

Anyone else ever been in this situation? Any suggestions? I just want to be rid of them, but at the same time, I don't think we should just pay and not get what we are entitled to.

SusanW1 (Michigan)
Posts: 5,202
Posted:
If you are being sued, I am assuming you have a lawyer - and the management company has a lawyer - and there will be a day in court.

I would not discuss this case with anyone. Let the lawyers handle it.

RogerB (Colorado)
Posts: 5,067
Posted:
Krystal,
What exactly is the management company not willing to provide? Going to court is not a viable solution. Have you read the management Agreement? The HOA owns the association's documents and has the right to receive them upon payment of all fees due to the management company. Manipulating any meaningful data would be extremely detrimental to the HOA as any competent management company could prove prove it in court. So the MC's is using that as an excuse - just as the Board's reason withholding payment is not justified. Work it out!
PaulM (Pennsylvania)
Posts: 1,347
Posted:
KrystalA: It is certainly not the best solution to be brought to court over non-payment of fees to them because you are not getting the info due you.
It sounds like there may be a difference of opinion on what data is to be rendered. What 'property' are they refusing to give you???

Are they not fulfilling their responsibilities to the assn? Are you each upholding the responsibilities as noted in the assn's contract with them?

Once both sides have decided to go to court you have set yourself up for a
no-win situation. You are going to ask residents for funds to defend yourself
(Board/Assn.) against the mgmt. company you are under contract with so they will give you "your own property". The lawyers are in anticipation of their fees as we 'speak'.

Why have you reached an impasse that would bring you to this point. Sad.
SusanW1 (Michigan)
Posts: 5,202
Posted:
Most likely this will go to mediation.

Next time, be sure the contract with MC is clear on how to break the contract AND what management records "belong" to whom!
CharlesW1 (Georgia)
Posts: 826
Posted:
KrystalA

I sympathize with you and the MEMBERS of your association. I feel (many will agree) that the board MUST determine whether they are or are not properly managing the associations money “IF” the BOD continues in the path of which you have described.

I can truthfully say that, I wouldn’t be pleased to hear that my MC (management Company) was being sued by the BOD or visa-versa. There are several questions the BOD should be asking at this point of the lawsuit. As a homeowner I wouldn’t want any portion of my money (assessments/dues) being spent, so in theory your BOD should feel the exact same way?!

I personally would thoroughly read the contract. Perhaps (time/money) can be better spent if an attorney’s interpretation of the contract was given to both parties. Revaluate your current situation and seriously consider “washing your hands” of this particular misfortune, now before putting the entire association in even greater risk. Why continue to “waste” association money, IF this can all be avoided with a legal interpretation of the contract. The answers to many of the questions you are confronted with, can be found here.

It’s not about your self pride. “IF” the MC is doing what is detailed in the contract then your association does have much of a leg to stand on IMHO. However, if the contract is silent of this particular matter and either party is considering resolution, then a law suit maybe the only way. Very sad situation, if that is the only way to resolve the issue.

Your BOD has already inappropriately spent money, to “defend” themselves. I think you should attempt to end this prior to it escalading any further.

Best of luck and certainly keep us posted. There are many knowledgeable people who continue to post to this discussion forum, to inform those of us less familiar with the DOs and Don’ts of community living.

Chuck W.
Charles E. Wafer Jr.
RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By KrystalA on 12/26/2007 5:27 PM
Well our association is being sued for non payment of management fees. Of course we have their money in an escrow account and more than willing to pay once we are given all of our property which they decided we won't get all of it. Some things they "just don't have" and other things they won't give us because "we could manipulate the data" and then sue them.

We tried to work out something, but some members of the board are "A personalities" and refuse to negotiate - same with the Association manager.

Anyone else ever been in this situation? Any suggestions? I just want to be rid of them, but at the same time, I don't think we should just pay and not get what we are entitled to.

Krystal, if the Board wants to save money they will:
1) terminate the management company in accordance with the management agreement;

2) pay all funds due to the management company (this may require paying whatever can be negotiated to terminate immediately if the agreement term does not expire until some time in the future); and

3) upon payment request the immediate return (or pickup while delivering final payment check) of all of the HOA's documents and other 'property' which are in their possession.

If necessary your board can have an attorney write this demand letter. We have had to reconstruct the records for an HOA we took over which was going through an advisarial termination. The Board chose to pay off for the rest of the yearly contract term and still did not get their records promptly. They used an attorney to accomplish the negotiation and return of documents.
PaulM (Pennsylvania)
Posts: 1,347
Posted:
KrystalA: I have read with much interest your previous post of some weeks back in which you stated concern over not receiving electronic records from your PM. You recd much good advice over that post.

You do not state your role in this situation, whether you are a Board member or not. However, the message is the same from the last post to this post: unless the contract w/PM, your state laws REQUIRE the mgmt. company to provide the assn. with ELECTRONIC records or whatever else it is that you think you are entitled to, then the Board will have to accept what the mgmt. company has given provided it is according to the agreement, and the Board needs to fulfill their responsibility with payment to them.

Your association has placed itself in a sensitive position over what appears to be a matter of 'interpretation to what is owed you'--especially if you are looking for a NEW management company and the 'grapevine' has begun its role in making other companies aware of your non-payment. Not a good scene. The
Board needs to rethink this one and apply a little common sense.

RickR3 (California)
Posts: 42
Posted:
Krystal

I have to agree with what PaulM has said about the grapvine. When I voluntered for the BOD and subsequently appointed to President our HOA had a very bad reputation. Hardly any service suppliers would work with us and those that would were not the best in any manner. When you withhold payments and move as far as getting lawyers involved the only people who benifit are the lawyers. Your BOD should work with the PM and come to an equitable solution. An HOA is a business, its customers are the Home Owners, the suppliers are those who do the actual work, like landscape maintenance, pool maintenance, Property Management. Like any other business if you treat your customers or suppliers poorly you end up going out of business because no one wants to do business with you.

Rick
GloriaM (North Carolina)
Posts: 829
Posted:
Krystal:

Upon the turn over of files to my knowledge; unless specified in the MC Contract that they will be of electronic format, then most MC's will turn over paper documentation to the HOA.
KrystalA (Iowa)
Posts: 60
Posted:
RickR3
Funny enough, since the termination, we have had vendors calling us again wanting to start submitting bids again. Most didn't want to work with the property manager. The manager treated homeowners and vendors very rudely and it was really hurting us to the point that people moved only because of the company.

I have no desire to keep the money from her, but an early email was sent to us heavily implying she didn't even keep any of our property.

As for lawyers, the one that supposedly represents us has failed to return calls for a month. We are under the belief that they work for the property manager as well. So we don't have any huge legal bills at all, and I want to keep it that way.

I tried to work with the PM and they agreed to give us electronic for an additional small sum of money, then the next day took back the offer saying they were told not to, because we could manipulate it. of course, she would still have a back up to protect herself, so that seems odd to me. Plus the new management company has nothing to gain by doing that. they seem to want the pi$$ing contest.

thanks a lot for the thoughts

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