Change MC before or after transition?

Hello everyone!

We are a 262 unit townhouse-style condo development that is roughly 95% built but is fully sold. Naturally we're beginning to think about the transition process from the developer.

Our current management company came as a "package deal" from our developer, and the community is not happy with them. As a board member, I am constantly amazed at how poorly they do their job. Because of all this, we've also begun looking for new management.

My question is this - should we wait for the transition process to complete before replacing our MC? I'd like to hear from people who have replaced theirs before their developer transition or were in a similar situation as us and decided to wait until after transition to replace their MC, and the pros and cons of each approach.

Our attorney has advised us that it's usually better to stick with the original management company during transition, since they're familiar with the developer and all of the existing issues. My theory is that the current MC is beholden to the developer, and wouldn't want to jeopardize their business relationship with the developer by pressing on certain issues, and that it would be best to have new eyes looking at everything.

Does anyone have any experience or advice they can share?

Thanks,
-JF

Do you have the option OR responsiblity for assuming the contract? For the MC or ANY contract the developer has?

You may be "stuck" for longer than you think. Make sure this a discussed transition item!

Jim,
I suggest the Board start the process of selecting a management company immediately. I suggest you do it before the transition is completed. Attached is information to consider during the transition from the developer.

JimF2 - North NJ HOA/COA guy here. As such, there is a wealth of experience, and information I can provide you in addition to Transitional related matters. Information you may or may not be aware of. For example, have you heard of the NJ Municipal Services Reimbursement Act? If you provide HOATalk your email address to send to me we can begin a dialog if you wish.

It's wonderful that you are thinking about Transition. The MC was originally employed by the Developer. Until the Developer is off the Board I don't believe the Board can do anything without the support of the Developer to hire a new MC.

Please explain the role of the Developer on the Board, if any? Does the Developer retain a seat, since the association is only 95% built? If so, who exactly does the attorney work for?

Has your attorney advised you that Transition is a long process that can take years to resolve? My HOA/COA (single-family, and townhouses) was completed in 2004 and we have the Developer making good on work, we are still negotiating Transition matters. This is normal.

I appreciate the spirit of what your attorney is recommending. Change is the only thing that is constant, so it's wise to try to have consistency. However, if your Board is unhappy with the present MC, the attorney's advice means everyone should stick with the MC, perhaps for years?? That's questionable, and leads me to believe, dare I say, that the attorney may need to be switched as well.

Gerald,

I think I've seen your posts on the CAI-NJ web forum... thanks for your reply here. I am aware of the Kelly Bill, and my email address is available in my profile.

The developer retains 1 of the 5 seats on the board. I've consulted with our attorney on whether the developer has veto power on this, and he says that they don't.

I've also reviewed the necessary documents as pertains to the employ of the management company and indeed we are able to terminate the relationship, as the agreement expires at the end of August. Prior to that we can terminate w/ 60-days advance notice. The Management Contract didn't seem particularly binding....

The attorney came 'by default', just like the Management Company, and he is retained by our Association.

Roger - thanks for the info. I look forward to reading the document.

-Jim F

Jim, Gerald sounds Golden with his advice, don't fall in love with a developers lawyer.

On the other hand, you seem to have a good sense about what is going on and are watching closely, so I might suggest you get a Board ready and prepped so the day the big change comes you can move in and move on.