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JamesC
(Maryland)

Posts:282

01/21/2010 2:24 PM
167 Townhome Community on Private Property in Maryland. Nine board members. Homes are modest in price range from $220K to around 250K. When the housing boom comes back, because we are close to both Baltimore, and Washington D.C. I am hoping our market value will increase. Now the problem::::We (I am on the board)received the budget proposal for 2010 which showed a %5 increase in the fees for our management company. Going from $24,297.00 per year to $25,512.00. The increase would change our monthly assesement fees from $65.00 per month to $71.00 per month. At a time when I know very few people are getting a %5 raise I strongly questioned the increase. I began looking for proposals from other management companies, and was told by one company, if we did not pick them to represent us, we should look very hard, because of the size of our community, and where we are located, we are being milked by our current company. One company I checked with would represent our community for $9,018.00 per year, and who represents 429 single family homes in the area. The single family homes only pay $11.00 per month in assesements. We have seperate contracts for water, snow removal, landscaping, and everything else, so the fees paid to the management company is only for property management paper work. Every company I solicited has given prices under $20,000, but the board of directors are non responsive to getting anything done. I presented them the information last December, and were supposed to discuss the issue at the monthly meeting this past Tuesday. Due to not enough memebers to have a quorum the meeting had to be cancelled. Each month that goes by is costing our communty over a thousand dollars. The meetings are held every third Tuesday, of each month at the same time, which anyone caring about where the monies are going should have made arrangements to be at such a crucial meeting. The next meeting will not be held until February. In brief, should I be ticked????? (Really just wanted to vent my frustration, and where better to do so then on this post?) Thanks Jim

TimB4
(Virginia)

Posts:3229

01/21/2010 2:41 PM
Jim, First and foremost, yes I do believe that you should be ticked. It's very frustrating when someone who cares enough to look into a topic gets the perception that the work was for nothing. I'm glad to hear of any Board member who looks for possible cuts in expenses prior to forwarding costs onto the membership. Suggestions: 1. Have the President call a special Board meeting to discuss this topic. 2. Contact all members of the Board prior to the meeting yourself in order to remind them of it. Questions? Why, for such a small developement do you have nine board members? I live in a development of 130 town homes and we only have 5 Directors. Was there a reason for the nine? Do you need to keep the management company? We own the streets, sidewalks, etc. and are able to manage the Association ourselves with the assistance of a paid interdependent contractor to maintain the books. The cost is not anywhere near the amount you are paying a company. Other then the collection of Assessments, the paperwork is really minimal. Tim

DanielH1
(California)

Posts:481

01/21/2010 3:16 PM
You should try to get it changed. But I suggest that you not be ticked. Getting 5 people out of 9 to agree and then take action on anything is pretty hard, no matter how obvious it is. With regard to prices and whatnot, I couldn't say. Value for price is kind of spongy when it comes to HOAs. For comparison, we pay about $12K/year to be managed for 45 detached homes. (My previous HOA was self-managed but I'm very content to pay not to be in my new HOA!)

JamesC
(Maryland)

Posts:282

01/21/2010 4:43 PM
Thanks to both of you. Since the other board members are homeowners like myself, I am dumbfounded they would not have jumped at the opportunity to switch companies. I contacted three different companies who in return gave me a large number of communities to contact for references. The one who I would like to represent our community handles 142 other ones. Their price is $15,079.00 less then our current MC. Plus they agree to take over two line items, and incoporate them into the contract. $1300.00 for office supplies, and $1100.00 for postage. (another savings of $2400.00) We have been with the current MC for over ten years, and no one ever thought to look around until I decided their request for an increase was too much. Our covenants state we should have nine board members, supposedly if there were a tie on issues the President could be the tie breaker. Otherwise he does not vote. The reason I am ticked is because, I feel since we are a corporation all the homeowners who are shareholders have a right to all information regarding the Association, but telling them the board is not performing their fudiciary responsibilities would cause a huge uproar. Having been with the current MC, and being told how much we are now, and have been charged in the past means we have paid out tens of thousands of dollars we could have put into our reserves, or better yet we could lower our monthly assesement fees, and still have some for the reserves. By the way, I did send every one of the board members a copy of the MC's I contacted, as well as the communities they suggested we contact. I advised all of them to contact as many as they wanted. They have made no contacts as yet?????????????????? Thanks again for the read:::::

SusanW1
(Michigan)

Posts:5028

01/21/2010 4:56 PM
Is this MC under contract?

EverettC
(Maryland)

Posts:90

01/21/2010 7:16 PM
Jim, The increase of 5% ($1,224) only justifies an increase in the monthly assessment of 61 or 62 cents [$1224 divided by (167 x 12)= 61.08 cents]. What else is happening to justify the $6 increase? Do you have adequate reserves and are using the difference to increase your reserves? How long has it been since the management fees were increased? If the fees haven't been changed for several years, maybe the increase would be justified. But you still have the competitive bids of the other companies you have contacted. If they are competent and if they are bidding on the same services, you have a right to be ticked, and need to keep working on the other board members to find out why they are reluctant to change. Everett

MaryA1

Posts:0

01/22/2010 8:03 AM
James, The management co cannot just raise their fees w/o the board voting to accept the terms of the new contract. Has this been done yet? If not, then you still have time to get the board to agree to accepting bids from other mgmt co's. However, if the new contract has already been accepted then changing co's may not be possible w/o paying a penalty. You should check into this ASAP. Just because the BOD does not want to change mgmt co's doesn't necessarily mean they are violating their fiduciary duty to the assn. It's just your opinion the present mgmt co is charging too much. Until you see bids from other companies for the exact same services your current mgmt co is providing can you determine if you have been overcharged. But, even if the assn has been overcharged that in itself does not mean the board has violated their fiduciary duty. Be careful what you tell the homeowners. Remember, you are a member of the board also and are resp. for whatever actions the board takes unless you have actually voted against a particular action. But, even if the latter has occurred you should never bad-mouth your fellow board members.

JeanneK3
(Maryland)

Posts:348

01/22/2010 10:03 AM
JamesC: I live in a condominium community of 84 townhouses and our management fee is $10,440 per year plus mailing and postage expenses. You are right to get other bids. Most homeowners are interested in saving money so instead of just speaking to the board, get that information out your neighbors. Your right to distribute and mail information is protected by Maryland law. Jeanne

RobertR1
(South Carolina)

Posts:5164

01/22/2010 10:41 AM
James, I consider Maryland to be my home state, and now SC is my home, so I have have some Maryland experiences, not that this is relevant. After reading all the advice here I can not help but endorse damn near everything you have been told. Good job by all the responders. I personally, when I go to the trouble to read the complete thread and can't add anything I look for something that maybe was not presented and yet flashes as MAY BE a problem. I am speaking of your message content and what I ee as a glitch waiting to happen, but, hey, I could be wrong. James, you seem to be somewhat of a right fighter and are letting your desires to be proven right get in the way of solving the problem. The problem, as defined and as suggested here by those posting is to find a way to change and not prove how right you are. You may be right as rain but it puts no money in the back. The change will have to come through the Board, not through the membership, they also don't much care if you are right, or you wouldn't have the issue. The Board hires the M/C, bookkeeper (and you might consider this option) or whatever and the board will hire the new whatever. You have a problem on how to change the board, which will be harder that hiring a new company. How, do you, as sort of the new kid on the block, effect change? Start a little by little program of demonstrating your smarts, your concerns, your depth of resources, your ability to lead. Don't dwell on some figure you assume you are losing each month and be happy if six months from now you have a new management arrangement, but let it come from the Board and that's a tough job. I will personally assure you in six months time this management issue will be a little bump in the road if you are effective and there will be ten huge much more important issues loaming on the horizon or staring you in the face. All boards need to have new life pumped into them, you fit the ticket..............you are a prime candidate to contribute.

GeraldT4

Posts:1022

01/22/2010 11:42 AM
James - Side note, you wrote "Our covenants state we should have nine board members, supposedly if there were a tie on issues the President could be the tie breaker. Otherwise he does not vote." The President should vote on all matters, not just to break a tie. All members are entitled to almost all information about the association, except probably matters pertaining to pending litigation. However it is not your sole responsibility to tell them, nor is it to withhold information if asked. It's good you realize the uproar it would cause. You should be contacting the MC"s as a Board, not individually. It's fine your doing some research but interviews should be conducted as a Board.

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