No self management

Park,

So how about amending the bylaws? Oftentimes the board can do this w/o a vote of the members. If the board does decide to pursue this course of action, IMO, the amended bylaws should be worded in such a way to give the BOD the authority to determine whether to self-manage or hire a mgmt co. This is the article in my bylaws. As you can see, this article gives my board the "express authorization, right and power" to hire a management co. but does not say they must, thus allowing my assn to be self-managed or not.

"Agreements. The BOD shall have the express authorization, right and power to enter into one or more management agreements in order to facilitate efficient operation of the facilities and property owned by or subject to the control and administration of the association, which management agrements may provide for, among other things, the administration, management, repair and maintenance of said facilities and property. The terms of said management agreements shall be determined by the BOD to be in the best interests of the assn and shall be subject to the articles of these bylaws and the master declaration."

As you can see, this article gives my board the "expression authorization, right and power" to hire a management co. but does not say they must, thus allowing my assn to be self-managed or not.

I've never mentioned this before, but some insurance companies give a discount on D&O insurance if the association is professionally managed. I've been told ours does. I realize this doesn't even come close to offsetting the cost of professional management, but the fact that a discount is offered at all must mean something. I take it to mean that statistically, some HOAs don't do a great job with self management and are more likely to find themselves in hot water. IMO, risk tends to be underestimated.

Whether you choose to be self managed or not, just make sure you consider all the factors: size of community, cost, amount of work involved, risk, etc.

Mary,

I think I have to agree with Gerald on this one. True, the paragraph you quoted doesn't specifically say the BOD "must" hire a management company, but it also doesn't specifically say they don't have to. In fact, IMO, the entire tone of the paragraph is in the affirmative; that is, it implies that there will be a management agreement. The paragraph says that the BOD can enter into "one or more" agreements. It doesn't say "zero or more." The words "one or more" implies that there must be at least one such agreement. It does confer that authority upon the board, so the agreement doesn't have to be approved by the members, and it leaves it up to the board to negotiate the terms of the agreement.

The paragraph does defer to other articles of the bylaws and the master declaration, so, is whether or not you can be self-managed stated somewhere else?

Mary is right on this one. The board has the authorization, right and power falls far short of obligation. Further, the board gets to decide what level of service is appropriate for the management contract other then that the management contract can not allow for something not in the association documents.

Having said that the board has the right to decide, I would say that it would be unwise for the board to decide to forgo a management contract without solid input from the membership.

I would agree if the paragraph said something like: "The BOD shall have the express authorization, right and power to enter into one or more management agreements AT ITS DISCRETION...." or something similar. It doesn't. I take every paragraph in the governing documents to be a requirement unless it is stated otherwise. You can't just pick any old paragraph and say, "well, that's an option." That makes the governing documents "just guidelines" and we've heard that one before in this forum.

The fact that we've seen two interpretations demonstrates the need to be more precise when writing these documents.

Excellent point! I don't either.

So, where shall we build it? :-)

Don't ever presume how a judge or a court will interpret anything. The world is full of surprises!

An aside:

Funny, but we're all yammering on about SOMEBODY ELSE'S ByLaws, not old Park's, who started this thread and hasn't posted since.

BTW - Our ByLaws have a separate paragraph that states the Board MAY employ a Managing Agent.

I agree, Michele, the exact wording of the bylaws would be very helpful. Most bylaws give the power and duty to manage the assn to the BOD. I, too, would be curious to read the exact language stating the assn cannot be self-managed.

MaryA1 - My declaration states that self-management must be approved by 2/3rd's vote of the association. Once again you, and others are linking the power to enter into an agreement with the power to decide to self-management.

And, just in case I'm not being clear, I can now understand Mary's interpretation. And, reading Gerald's last post, I can understand his.

It depends on the frame of reference (ie, the entire document).

These are all fine and excellent discussions over nothing.

As far as I can tell, we still don't know what the original poster is even asking.

Whether the board is trying to self manage and he doesn't want them to; whether they think the language is there that they can't, and they WANT to; whether they are still under developer control and HE has a management company. . .

Too many questions and the original poster has not returned to clarify exactly WHAT his problem is, and what it ISN'T. . .

Nor do we have any of the bylaws language of HIS HOA to help us out.

So.

Waiting. . . .

Mary,

Our bylaws cover management in this way:

"Section 2.5 - Manager. The Executive Board may employ for the Common Interest Community, a Manager at a compensation established by the Executive Board, to perform such duties as the Executive Board shall authorize. The Executive Board may delegate to the Manager all of the powers granted to the Executive Board by these Bylaws other than the powers set for in ...." and then goes on to list 17 subsections from Section 2.2 Powers and Duties (of the executive board) that can't be delegated. Remember, too, I had earlier posted one of the powers of the executive board was the power to "hire and discharge" managing agents.

Although this can probably be improved upon, I like this wording better because 1) the word "may" is quite clear that it is a permitted, but not required act, and 2) the words "may delegate to the Manager all of the powers granted to the Executive Board .... other than ..." to me, at least, makes it clear that the board has the right to self-manage, because it only delegates a subset of its own powers to a manger.

Mary, what I meant by that was that the discussion was an exercise, but not one that answered anyone's specific questions.

The comments and discussion were great.

And anytime one can stretch some intellectual muscle, it's worthwhile.

I just meant that the impetus is (was?) invisible.

I would still like to know what the original poster's problem was.

Did he want to self manage and is being told he can't pursue it?

Is the board self-managing and he doesn't think they can?

Is this really a developer situation where the developer still has "control" and, as many have, has a management company involved?

I hope he comes back because I'd really like to know. . .

Since we're posting what our documents say about hiring professional management, I thought I would add ours:

Section 5.1. Responsibility of the Association. Except as otherwise provided herein, the management, maintenance, repair, alteration and improvement of the Common Elements and any property leased to the Association shall be the responsibility of the Association. Each owner agrees to maintain, repair, and replace at his expense all portions of the Common Elements which may be damaged or destroyed by reason of the willful or uninsured negligent act or neglect of himself or any other member of his household, or by the willful or uninsured negli-gent act or neglect of any invitee, licensee or guest of such owner or member of his household.

Section 5.2. Professional Management Contracts. The Association may delegate all or any portion of its authority to discharge its responsibilities under Section 5.1 above, to a manager or managing agent. However, neither the Association nor the unit owners will be subject to any management contract nor agreement executed prior to the assumption of control by the unit owners, as provided in Article IV, Section 4.2, for more than one year subsequent to that assumption of control unless such contract or agreement is renewed by a vote of the unit owners pursuant to the By-Laws. Any such management agreement shall not exceed three (3) years and shall provide for termination by either party without cause and without payment of a termination fee on ninety (90) days or less written notice.

It reads prohibits self management by the association.
where i was going with topic, new management is only handling finances. Is the Bod,managing the violations? Would that be self managed?

How do you scan a document (jpeg format) and then convert it
to a text document. Chuck needs to know. Thanks

Park,

There is such a thing as being "semi-self-managed". What you describe is how my former assn is run. They have an accounting service who takes care of all the finances: collects and deposits the assessments, pays the bills, prepares the financials, etc. The board is resp. for all other aspects of managing the assn: solicits bids for landscaper, etc; takes care of violation notices and handles anything that isn't financially related. Self-managed means the board members perform ALL the functions previously mentioned.

John,

I say that for the same reason I would say (and I suppose you would too) they are not self managed if they hire a mgmt co to do all the work. IMO, self-managed means the board members do everything with regard to operating the assn, which includes anything financially related.

Mary,

I guess my attempted point was that if a PM is hired to run the whole melange, then the HOA has opted for an outside-managed HOA. Lacking that turnover, I'd say self-managed is what an HOA is. Or to put it another way, if somebody (a PM) is paid fees to manage, rather than a vendor paid for specific services not requiring a management fee...

Whatever.

I'll move on now :-)!

But John how do you differentiate the management fees from fees paid to say the pool company? They all come from the same checking account and are both fees paid for a specific service. At the end of the day a MC is a contractor just like any other vendor.

Charles,

Some scanners include Optical Character Reader (OCR) software that allows you to scan a text document just like you would a photo but it converts it to searchable and editable text. Some work better than others.

John,

Or, should I say Mr. Persistence? LOL

The difference in your scenario and mine is that my former assn hired a bookkeeping service to perform all the financial functions necessary to run the assn. This is not the same as hiring a landscaper; and you don't contract with a bank or an insurance agent. Someone else performing all the financial duties is taking a very big and important job away from the board, thus my impression that this now makes the assn "semi" self-managed. The board handles everything but the finances. I would think the same if they hired a mgmt co to only enforce the CCRs but took care of the finances and everything else themselves. When the BOD handles ALL the necessary functions required to operate the assn they are self-managed. But if they contract out one of the more critical functions, then they are "semi" self-managed.

These are my thoughts and I'm stickin' to it!

"You know, John, you can really be tedious at times."

John, is that your wife talking? LOL

Excellent comment.