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Subject: HOA property manager violates management contract, ehtics standards and governing documents
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Author Messages
VadimK1
(Georgia)

Posts:4


10/13/2019 4:03 PM  
Hi all, I am sure this has been asked to death, but I am new. I have been elected to our Condo BOD back in March, hoping to change something, but now, 6 months later, I am ready to just say "screw it" resign.

Long story short. I am a member of a five-person Board of Directors at a Condominium Association with about 230 units (located in Georgia).

The property manager together with three Board members engages in questionable activities that in my opinion constitute a violation of our Condo governing documents and property management contract. Examples of the violations I observe: property manager includes unauthorized people in the confidential Board communications (former Board President and Vice President) and pays vendor invoices that were not approved by the Board or approved solely by the Board President (even though both management contract and out governing documents state that everything needs to be approved by the whole Board). I presented the president of the management company with some of the violations but he does not seem to be too responsive. What is my best course of action in this situation? Removing three board members is pretty much out of the questions, but is there any way to force compliance on property manager's part? She is a licensed professional and should be governed by the management contract and ethical standards of the entities that issued her professional licenses.
SheliaH
(Indiana)

Posts:2984


10/13/2019 5:22 PM  
if these contracts were signed before you joined, there may not be much you can do.

KThe problem is that you will need at two homeowners on your side in order to get something done. Otherwise you won't be able to get rid of the.property manager of the president. In many HOAs, the documents say homeowners vote for the board and board members elect officers from among themselves. Right now, you're outnumbered in everything.

Normally, I'd suggest going to the agency that regulates property managers, which you can try, but I worry about how much information you can get from the board to prove your allegations. I think you're going to have to do this the long way - resign from the board and rally your neighbors together to vote out the president and the others who seem to be going along with this. Before you do, you may want to talk to a few neighbors in confidence to see what the think of the board. You won't be able to tell them everything yet, but perhaps you can encourage them to attend more meetings and listen to the proceedings. You can express your concerns about the former board members receiving confidential information that should only be seen by current members. It'll be harder to stone wall you when people are watching.

That may resolve some things, but ugly you'll need to resign so you can work with your neighbors to push for a recall. Check your documents to see how this is done. Be prepared for wild ride and they will to after you, so you need to figure out how long and how long you want to push.

Hopefully your drive will get angry enough to recall and from there, you can make plans to get rid of the management company.

MelissaP1
(Alabama)

Posts:9034


10/13/2019 7:50 PM  
Is the Property Manager responsible for enforcement of violations? Is it in their contract? The PM works for the board not the other way around. So have you read the PM's contract? Have you looked for other PM's in the area to get some replacement possibilities?

How exactly do you think violations get fixed? What options does your HOA have in correcting? Do you have a defined fining schedule? Are these violators renters or owners? The owner's feet have to be held to the ground for fixing violations not the renter. Is your HOA/COA have the ability to issue fines?

Our HOA we had this option instead of fines. (Which we could do but not defined). A member's violation if not corrected, the HOA could pay someone to fix/remove the violation. It would be at it's cost. The bill would be sent to the owner to pay. If they did not pay the bill, then we could lien them for that expense. Mind you this was the LAST resort. We would give them notice telling them fix it in this time period. If not, we would pick our own contractor to do it and send them the bill. Which left unpaid would be a lien against their home. Yes, understood the whole "trespassing" issue. However, in our HOA we owned the area outside of the house. Owners just owned the house and the lot is sits on.

Former HOA President
KerryL1
(California)

Posts:6920


10/14/2019 10:48 AM  
First, Melissa, the OP is not talking about Owner violations of the rules. Please re-read.

Sheila is right, Vadim, It's very difficult to change anything when you're so outnumbered. You might try another communication with your PM's boss by sending a copy of the "confidential" email that includes former directors. But the might put heat on you. But why are these emails "confidential?" Shouldn't they be items that are discussed in executive session and not by email?

Are you sure the the whole board must approve the invoices before the PM pays the bills (writes the checks)? Or is it that the Board must approve expenditures before the PM has the work (or whatever) done?
VadimK1
(Georgia)

Posts:4


10/14/2019 11:09 AM  
Our Bylaws state the following "Any action to be taken at a meeting of the Board of Directors, or any action that may be taken at a meeting of the Board of Directors, maybe taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors and any further requirements of law pertaining to such consents have been complied with." The management contract states that the PM cannot approve any work or pay any invoice over $1,000 "without the approval of the Board". It would then follow that any work performed or any invoice paid in a sum over $1,000 that were not approved by the whole Board are a violation of both governing docs and the management contract..?

As far as "confidential" emails, if former directors communicate with the attorney regarding Board business and PM is cc'd on every email, isn't everyone in violation here? Lawyer knows he is not supposed to discuss Board issues with former directors, and PM is aware communication is going on yet does nothing.
VadimK1
(Georgia)

Posts:4


10/14/2019 11:13 AM  
Posted By SheliaH on 10/13/2019 5:22 PM
Normally, I'd suggest going to the agency that regulates property managers, which you can try, but I worry about how much information you can get from the board to prove your allegations.




That's the problem: I did take this to the property management company's President with proofs, but he keeps babbling about "need to investigate" and that this is a "board issue", even though it is not, it is an issue woth his employee violating professional ethics and contract.
MarkW18
(Florida)

Posts:574


10/14/2019 11:22 AM  
Posted By VadimK1 on 10/14/2019 11:09 AM
Our Bylaws state the following "Any action to be taken at a meeting of the Board of Directors, or any action that may be taken at a meeting of the Board of Directors, maybe taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors and any further requirements of law pertaining to such consents have been complied with."


Do you have any idea what that means?
VadimK1
(Georgia)

Posts:4


10/14/2019 11:26 AM  
Mark, I take it at face value: any action in between Board meetings has to be approved by the full Board. PM instead pays invoices on approval of our President alone or with no approval at all. What am I missing here?
MarkW18
(Florida)

Posts:574


10/14/2019 11:36 AM  
I call this micros-managing. I think you're wasting your time with a PM. You should do everything yourselves.
JohnC46
(South Carolina)

Posts:9155


10/14/2019 11:36 AM  
Vadim

Not all expenditures have to be approved by the BOD. If they are in the budget, then they are automatically paid each billing period. Example:

1. We budget say $18,000.00 per year for our landscaper. We did this based on his contract saying $1,500.00 per month. The MC does not need approval each month to write him a check as we have budgeted for it, the MC automatically pays it.

Action without meeting varies from state to state with some states not allowing it at all. Your docs seem to allow it so what is your question?

No former BOD Members should be included in day to day BOD nor MC Emails unless specifically needed to be such as a question asked of them.

The MC works for the BOD. The BOD can change MC's.

Our MC is not allowed to directly communicate with our owners. Any owner communicating to the MC is referred to our BOD Email address.

I cannot speak to GA but in many states the MC does not have to be licensed so no one to report them to.

I would keep at my BOD about anything I felt they were doing wrong but be nice about it. Your other plan of action is to get people on the BOD that think like you. This is not easy. It cannot be wished for, it must be worked for but it can be done.
DouglasK1
(Florida)

Posts:1481


10/14/2019 12:53 PM  
Posted By JohnC46 on 10/14/2019 11:36 AM

Not all expenditures have to be approved by the BOD. If they are in the budget, then they are automatically paid each billing period. Example:

1. We budget say $18,000.00 per year for our landscaper. We did this based on his contract saying $1,500.00 per month. The MC does not need approval each month to write him a check as we have budgeted for it, the MC automatically pays it.



This is pretty much how we did it when I was on the board. The treasurer (me) just paid normal monthly expenses, the board did not vote to pay the electric bill every month. Some utilities were on auto pay from our bank account and required no action at all.

Escaped former treasurer and director of a self managed association.
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Forums > Homeowner Association > HOA Discussions > HOA property manager violates management contract, ehtics standards and governing documents



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