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ParkP
(Maryland)

Posts:31

07/17/2008 8:03 PM
need help with this it is in our bylaws, that we are not to be self managed.

MaryA1
(Arizona)

Posts:2248

07/17/2008 8:53 PM
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.

KirkW1
(Texas)

Posts:1145

07/17/2008 9:50 PM
Nobody on this board will have a magic formula on how to get your way on management. Yes, self management is cheaper. But the savings come at the expense of the BOD's time. Your best bet in influencing the direction of your association is to run for the Board next year.

BruceF1
(Connecticut)

Posts:590

07/18/2008 6:25 AM
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.

GeraldT4

Posts:932

07/18/2008 6:35 AM
MaryA1 - I do not concur with your interpretation of your documents that permitting the BOD the ability to enter into a management agreement thus allowing the BOD the ability to decide to be self-managed. That's quite a leap in thought on your part. Self-management is a monumental task for most associations and IMO a power that the association at large should decide to undertake.

BruceF1
(Connecticut)

Posts:590

07/18/2008 7:06 AM
Posted By MaryA1 on 07/17/2008 8:53 PM 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. 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?

MicheleD
(Kentucky)

Posts:1711

07/18/2008 7:11 AM
I have to give strong props to you guys for even understanding what the original poster said. "need help with this it is in our bylaws, that we are not to be self managed." Excuse me, but WHAT exactly does that even mean? And exactly how is it written in the bylaws? I'd be curious to see the language. I believe in brevity but not to the point of being unclear. Please expand a bit.

KirkW1
(Texas)

Posts:1145

07/18/2008 7:22 AM
"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." 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.

JohnK3
(Pennsylvania)

Posts:463

07/18/2008 9:03 AM
Agree, Kirk. And nice try. Bruce, on that One Or More language. The cited provision presents a defined option to act, not a duty to act re: hiring a PM.

BruceF1
(Connecticut)

Posts:590

07/18/2008 9:14 AM
Posted By KirkW1 on 07/18/2008 7:22 AM "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." 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.

JohnK3
(Pennsylvania)

Posts:463

07/18/2008 9:25 AM
Try this: "Agreements. The BOD shall have the express authorization, right and power to build one or more helicopter landing pads on the Common Areas...." I don't see that as requiring at least one pad to be built.

BruceF1
(Connecticut)

Posts:590

07/18/2008 9:35 AM
Posted By JohnK3 on 07/18/2008 9:25 AM Try this: "Agreements. The BOD shall have the express authorization, right and power to build one or more helicopter landing pads on the Common Areas...." I don't see that as requiring at least one pad to be built. Excellent point! I don't either. So, where shall we build it? :-)

KirkW1
(Texas)

Posts:1145

07/18/2008 9:49 AM
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...." Sorry, but you are reading into the documents and that is not the way a court will see it. While perhaps the meaning could be made clearer, as written the board has the following items: authorization right power None of these words ever convey an obligation. Consider the following: You are authorized to buy me dinner. Yet so far you have chosen not to. You have a right to buy me dinner. Yet again, you have not exercised this option. You also have the power to buy me dinner. And yet one more time... Notice at no time did you incur any obligation to buy me dinner. The wording as written leaves it as an option regardless of the feelings of the owners at large. But again, I would say that making a decision like this one should be done with some level of input from the owners. As an owner I prefer the idea of a management company. A disinterested part doing inspections seems a lot more likely to remain fair.

BruceF1
(Connecticut)

Posts:590

07/18/2008 10:13 AM
Posted By KirkW1 on 07/18/2008 9:49 AM 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...." Sorry, but you are reading into the documents and that is not the way a court will see it. While perhaps the meaning could be made clearer, as written the board has the following items: authorization right power None of these words ever convey an obligation. Consider the following: You are authorized to buy me dinner. Yet so far you have chosen not to. You have a right to buy me dinner. Yet again, you have not exercised this option. You also have the power to buy me dinner. And yet one more time... Notice at no time did you incur any obligation to buy me dinner. The wording as written leaves it as an option regardless of the feelings of the owners at large. But again, I would say that making a decision like this one should be done with some level of input from the owners. As an owner I prefer the idea of a management company. A disinterested part doing inspections seems a lot more likely to remain fair. Don't ever presume how a judge or a court will interpret anything. The world is full of surprises!

GeraldT4

Posts:932

07/18/2008 10:44 AM
Ladies and Gentlemen - The article permits the board the power to enter into agreements, specifically a management agreement to efficiently run the association, that's it. It neither obligates nor relieves the board of the duty, merely permits the power. The article is an excerpt taken out of context with all the rest of the obligations of the board/association that the governing documents outline. A few of you are making assumptions based upon an article that can't provide a definitive. I don't mean to be controversial or disrespectful but you really must look at the letter of what is written, the board must (shall) have the power to enter into agreements. The article may imply there is a perceived obligation to hire a management company because it specifically states "management agreements". Why so specific? It could have been written including but not limited to management agreements. Be that as it may, I would be very annoyed with a board member that interpreted the article to be one that grants the power to self manage.

JohnK3
(Pennsylvania)

Posts:463

07/18/2008 11:00 AM
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.

MaryA1
(Arizona)

Posts:2248

07/18/2008 11:37 AM
Kirk said: "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. Then John said: "Agree, Kirk. And nice try. Bruce, on that One Or More language. The cited provision presents a defined option to act, not a duty to act re: hiring a PM. Thank you both for wisely () agreeing with me! I think the bylaws article I posted is quite clear in authorizing the BOD to enter into a management agreement. It says "the BOD shall have the express authorization, right and power. . .". Notice it doesn't say they "must" do this, only that they are "authorized" to do it. The bylaws also give the power and duty of managing the assn to the BOD. Here's the direct quote: "The business, property and affairs of the assn shall be managed, controlled and conducted by the BOD". An article of the CCRs goes on to say the "board may also appoint committees and managers or other employees and agents who shall, subject to the general direction of the board, be responsible for the day-to-day operation of the association. All these articles of the assn's bylaws and CCRs, IMO, give the BOD the authorization to either be self-managed or to contract with a management company. I think it's quite clear.

MaryA1
(Arizona)

Posts:2248

07/18/2008 11:41 AM
Posted By MicheleD on 07/18/2008 7:11 AM I have to give strong props to you guys for even understanding what the original poster said. "need help with this it is in our bylaws, that we are not to be self managed." Excuse me, but WHAT exactly does that even mean? And exactly how is it written in the bylaws? I'd be curious to see the language. I believe in brevity but not to the point of being unclear. Please expand a bit. 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
(Arizona)

Posts:2248

07/18/2008 12:13 PM
Gerald, You said: "Be that as it may, I would be very annoyed with a board member that interpreted the article to be one that grants the power to self manage." I would be very surprised to learn that your bylaws don't have an article which says "The business, property and affairs of the assn shall be managed, controlled and conducted by the BOD" -- or something to that effect. (The quote is from my bylaws.) That statement, in effect, allows the boad to self-manage the assn. I wouldn't be surprised to learn that this is stated Iin some form) in the bylaws of all assn's. However, some assn's may also have an article stating the board "shall have the express authorization, right and power to enter into one or more management agreements. . .", which would mean the BOD could choose to either self-manage or contract with a management company.

GeraldT4

Posts:932

07/18/2008 1:01 PM
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.

BruceF1
(Connecticut)

Posts:590

07/18/2008 1:20 PM
Posted By MaryA1 on 07/18/2008 12:13 PM Gerald, You said: "Be that as it may, I would be very annoyed with a board member that interpreted the article to be one that grants the power to self manage." I would be very surprised to learn that your bylaws don't have an article which says "The business, property and affairs of the assn shall be managed, controlled and conducted by the BOD" -- or something to that effect. (The quote is from my bylaws.) That statement, in effect, allows the boad to self-manage the assn. I wouldn't be surprised to learn that this is stated Iin some form) in the bylaws of all assn's. However, some assn's may also have an article stating the board "shall have the express authorization, right and power to enter into one or more management agreements. . .", which would mean the BOD could choose to either self-manage or contract with a management company. Mary, I already mentioned that I thought John made an excellent point with his helicopter landing pad example. You have done the same by referring to another section in your bylaws. This is the danger of quoting a paragraph by itself from the bylaws; you don't see it in the context of the entire document. When taken out of context, it's very easy to apply an interpretation to a paragraph that wasn't intended. I've said that before. Our bylaws, Section 2.2, Powers and Duties, includes a rather sweeping list of powers that are granted to the board. "The Executive Board shall have all the powers and duties necessary for the administration of the affairs of the Association and of the Common Interest Community which shall include, but not be limited to, the following:" and then there is a list (almost 2 pages) of all the things the board can do. These include, "hire and discharge managing agents," and "make contracts and incur liabilities," and you just gotta love these: "exercise any other powers conferred by the Declaration or Bylaws," "exercise all other powers necessary and proper for the governance and operation of the Association," and "exercise all other powers that may be exercised in this state by legal entities of the same type as the Association." I guess the last one is in just case they forgot to include something. Actually, there are a few things that the board cannot do, and those are spelled out separately, and are also spelled out in the law.

BruceF1
(Connecticut)

Posts:590

07/18/2008 1:26 PM
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).

BruceF1
(Connecticut)

Posts:590

07/18/2008 1:33 PM
Posted By MicheleD on 07/18/2008 7:11 AM I have to give strong props to you guys for even understanding what the original poster said. "need help with this it is in our bylaws, that we are not to be self managed." Excuse me, but WHAT exactly does that even mean? And exactly how is it written in the bylaws? I'd be curious to see the language. I believe in brevity but not to the point of being unclear. Please expand a bit. Good point Michele! Here we go. We certainly added a lot of posts to this thread and haven't helped Park one bit. In fact, all we have is Park's interpretation that the documents say they can't be self managed. WE DON'T KNOW what the documents say. How about it, Park. Quote the section you are referring to where you think it says you can't be self managed.

MicheleD
(Kentucky)

Posts:1711

07/18/2008 1:39 PM
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. . . .

MaryA1
(Arizona)

Posts:2248

07/18/2008 7:03 PM
Posted By MicheleD on 07/18/2008 1:39 PM 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. . . . If you really think about it, this is what happens with a good number of the messages posted. And, in many instances the original poster is never heard from again. I wonder sometimes if we scare him/her off with all our questions. And, I sometimes think people post their problems (or their interpretation of the "problem") and really only want commiseration. The more info they give us the more the possibility of us finding out they're wrong and, I'm sure that's the last thing they want to be told. I'm not saying this applies to everyone who posts a message here -- but I really think it applies to some. Having said that, I must say I disagree somewhat with Michele's assertion that this has been a "fine and excellent discussions over nothing." Even though we didn't get enough info from Park and perhaps didn't do him much good because of it, I think there is a lot to be learned from reading how others interpret these CCRs & bylaws. And I really think you all will agree with this. After all don't we all from time to time post a portion of our own docs when, in fact, what our docs or state law says really has no meaning to someone who doesn't live in our assn or in our state. I hope I'm getting my point across.

BruceF1
(Connecticut)

Posts:590

07/18/2008 7:40 PM
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.

MaryA1
(Arizona)

Posts:2248

07/18/2008 8:03 PM
Bruce, Sounds good to me. Actually, I think my CCRs could have been written and organized much better. Everytime I want to look something up I have to dig and dig! But, that is the problem with so many sets of CCRs. The developer picks and chooses what he wants to put in and the board and members go crazy trying to understand it all. I've always thought the CCRs should be uniform with only extra clauses that would apply specifically to the amenities contained in a particular assn. Some states have chosen to adopt the UCIOA (Uniform Common Interest Ownership Act), but of course that only applies to the state laws. We need to develop the Uniform Common Interest CCRs (UCICCR)! Just think, any time you move the CCRs will be the same. In your lifetime you would only have to worry about learning one set of CCRs. Just think how much extra free time you'd have. LOL

MicheleD
(Kentucky)

Posts:1711

07/18/2008 8:03 PM
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. . .

MaryA1
(Arizona)

Posts:2248

07/18/2008 8:08 PM
Michele, Glad you responded. I really didn't think you thought it was a wasted discussion. I do get the impression that you enjoy these discussions and you always have great input. I agree, too much was left hanging. I hope Park does come back to clear up some of the grey areas. I hope we didn't scare him off. :-(

GlenL
(Ohio)

Posts:1377

07/18/2008 8:31 PM
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.

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