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Subject: Management company resignation
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ChrisM33


Posts:0


09/23/2021 5:45 AM  
Our management company has resigned effective October 31st. We have signed a contract with a new company and they just backed out with no reason given. We cannot find a company who is willing to take over. What are we supposed to do?
We suspect that the current company said something to make the other back out, as they would not release any checks or other info to us directly. Our community is a complete mess which is the understatement of the year.
SheliaH
(Indiana)

Posts:4220


09/23/2021 6:39 AM  
If your association wanted out of your contract with management company #1, why didn't you READ the damned thing to see what the procedure was and follow it? I'm sure there was probably something in there about a written advanced notice at least 30 days in advance, and the association should work with them in setting up a transition plan to ensure all records were turned over to the new company, final payments for services made, etc. If

I don't know how many HOA property management companies are in your area, but I would think they probably know if the other, so if you just threw company #1 under the bus, company #2 may have become concerned about what they got themselves into and backed out. There may also be a clause in the new contract that allowed them to back out under certain conditions. Maybe you should pull out THAT contract and read it too.

Then again, do what you should have done from the start - have a sit down with the association attorney and have him/her review both of them so you can see what your options are. If you're done with company #1, you need to get your records as soon as possible and perhaps persuade them to work out a transition plan with you to have everything wrapped up by the end of the year. Meanwhile, have your attorney talk to the almost new company and see if they'll change their mind - at least provide services for 6 months, and if it doesn't work out, and the contract.

The association still has to run regardless, so it appears the board will either have to hire a set of bookkeepers to maintain the records and someone else will have to work with the contractors you do have (e.g. Landscaping) to see that work is done and they get paid. And you'll need an account to ensure the nation the financials records works out properly.

Until you get a management company to do the day to day, you may have to go the self manage route, and that means EVERY board will need to oversee an area, and you'll probably have meet a few times a month to keep up with everything. You may want to ask around the community and see if There are homeowners with the skill set you need to help out.

Yes, your community is all screwed up for now, but it can turn around if all of you are willing to do the work. I suggest you also go to the CAI website and invest in some of their educational materials son you can learn about best practices when it comes to working with property management companies, as well as contractors, getting reserve studies and a lot more. All board members should review those materials doorbell know what to do. You can also review the older conversations on this website for stories on how working with property management can zig or zag and learn from them.

I imagine some of the property managers who lost here regularly will also chime in - it's up to you to take some, none or all of their tips, but I suggest you read and consider it carefully. Bill, Max, Barbara, etc., take it away!

Oh, and good luck!

PatJ1
(North Carolina)

Posts:246


09/23/2021 6:49 AM  
Posted By ChrisM33 on 09/23/2021 5:45 AM
Our management company has resigned effective October 31st. We have signed a contract with a new company and they just backed out with no reason given. We cannot find a company who is willing to take over. What are we supposed to do?
We suspect that the current company said something to make the other back out, as they would not release any checks or other info to us directly. Our community is a complete mess which is the understatement of the year.




HOA communities, just like people, get bad reputations . People talk and remember. From collecting multiple quotes, lots of work for a vendor to prepare a quote and not get the work, to difficult Board members. These issues could reflect badly on the HOA. We have difficulty gathering quotes just because we are an HOA.

Set priorities. The most important issues of an HOA are collecting dues and paying bills timely. Start there. If your governing documents do not require you to have an MC, perhaps you can find an accounting office to assist.

You say you are a complete mess. Are you in an accounting mess or a maintenance issue mess?



Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
ChrisM33


Posts:0


09/23/2021 7:08 AM  
I never said we wanted out, the management company currently in charge has resigned as of October 31st. We were told this approx mid August and went and found a new company and after signing the contract, backed out. Which leaves us with nobody and very little options.
ChrisM33


Posts:0


09/23/2021 7:15 AM  
We are in an overall mess. It would be too long to explain but since the beginning of our community we have had issues with every board member and most board members do not last longer than 3 months. The company in control now is worthless and they voluntarily backed out without us prodding them. It was a surprise. The next company who was supposed to take charge on 11/1/21 backed out of their newly signed contract. It stems from original board members going on power trips and getting in fights with residents, basically the whole neighborhood has turned against eachother with little cliques. It is very childish but this is how it is. We don't even have a full board at this time. 2 members resigned within the past 30 days because of a threat of an unjustifiable lawsuit which never even happened. We are in upheaval.
SheliaH
(Indiana)

Posts:4220


09/23/2021 8:12 AM  
You didn't say if you are a board member - if so, it's time for a come to Jesus meeting with the entire community and discuss the sorry state of affairs. You say the last company was worthless and it may be true they didn't do some things right, but it's also possible they got tired of dealing with the previous board and frankly, I wouldn't blame them.

The property manager may have even dropped hints or said out loud the company would leave, but no one listened or took him/her seriously. I would understand you being surprised by all this if you're not on the board member and/or didnt attend meetings regularly, but for some reason I think you had an inkling all of this would come to pass. I'm not blaming you - Your neighbors are just as responsible for not insisting on professional conduct from the board and the manager.

What should homeowners be told at this meeting? If there is no functioning board, last board member left standing will work with the association attorney and go to court and request that the community be placed in receivership. That means the judge will appoint a receiver to run the association and the homeowners will have NO SAY whatsoever in what's done and how.

The receiver's primary job is to ensure the bills get osid, so things like building community of enforcing the CCRs may not be a priority. And who pays the court costs , attorney fees and the receiver? That's right, the homeowners. Yes that means a HUGE spike in assess and all of you will have no choice but to pay it. Think you can just sell your house to avoid all that? You can put it up for sale, but good luck finding someone who will buy a house located in a shitstorm neighborhood where the homeowners don't have a say in how it's run.

Hopefully that will get everyone 's attention, so job one will be to get some volunteers to fill the vacant spots. If no one steps up, the one board member could appoint them, and if the answer is still no, call the attorney and pursue the receivership. Non fact, when You have this meeting, ask the attorney to attend and elaborate on how bad receivership is. The homeowners may not listen to you, but heading it from the attorney may result in some volunteers.

From there, you can start working on a plan to manage the association while this management company business is being resolved. Have your attorney take the lead on the contract issue while the rest of you consider how the management tasks will be done. As I said earlier, together find another company from where, or pay a bunch of contractors or those residents with the appropriate skills and time will have to take it on.

Once you find a property manager, he sure to talk to him/her about what the manager can and wants do. This also goes for the board - the property manager ISN'T a board member, so decisions that are the board's responsibility should be made by the board. Your documents should dictate what the board is empowered to do - all board members (and the homeowners, for that matter) need to review them, so everyone will understand how this is supposed to work.If

By the way, I suspect all of this may lead to increased assessments anyway, so homeowners may as well get used to it. How much more they may have to pay depends on part on the new property manager and what you want done. If things need doing,but you don't want to pay for it, you'll have to do yourself or learn to live with it. That's not always a good thing either - remember what happened with Surfside when homeowners weren't willing to pay for repairs to its building.
BillD16
(Texas)

Posts:37


09/23/2021 1:40 PM  
Call me naive, but I think you - “you” as in some sane group of residents who want to get things back on track - should see if you can find out why the two PMCs decided to dump you. Maybe you’ll need a lawyer to talk to them. My point is: they had reason(s) for ending the relationship - it would be very helpful to know what those reasons were, from their POV. Once you know the reason(s), you’ll know what needs fixing.

BillD
PatJ1
(North Carolina)

Posts:246


09/23/2021 1:52 PM  
OP has left the building.

Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
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