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Subject: Management Contract Ammendments
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AnnT3


Posts:0


03/18/2011 7:34 PM  
I am on the board of an association with over 400 condos. Recently, I requested a copy of the management contract because we are unhappy with our current company. The contract has not been renewed since 2005. We have been month to month. In the contract, it states that there shall be no ammendments unless both parties agree and sign an ammendment. In our contract, the management fee is $5500 per month and postage, envelopes, copies, etc for all correspondence are included in this fee. We are being charged $6900 per month and $1500 each month for postage on the monthly ledger.

I emailed our management company and asked if there are any signed ammendments. Our management company stated that it was agreed to in a board meeting (around 3 or 4 years ago) that the fee would increase and it was put in the minutes. Would this be considered an official ammendment? It seems strange that it wasn't done formally.

Is it unreasonable for me to assume that the mgmt company should have included all ammendments when they provided me with a copy of the original contract? Or at least a copy of the minutes showing the rate increase?

I'm uneasy about the management company thinking the minutes are as sufficient as a signed ammendment. I'm still waiting for a copy of the minutes. Any feedback or suggestions?
MelissaP1
(Alabama)

Posts:9136


03/18/2011 10:09 PM  
Our lawyer told us that this would suffice if it is agreed by the board and put into the official notes. This applied to other general rules as well if wanted a new rule. I had to do something similar with our lawncare company when I had to fire them. Had to distinquish when the actual contract was signed to decide when the last check was to be written. Had a month's discrepency as the new contract started a month before the other ended.

Former HOA President
AnnT3


Posts:0


03/18/2011 10:24 PM  
In this case, if it was approved and in the minutes, shouldn't a new contract be drawn because the other is invalid?
MelissaP1
(Alabama)

Posts:9136


03/18/2011 10:38 PM  
Why? Once a new terms of a contract is agreed upon by both parties, a new contract doesn't have to be drawn up. (Saw that on Judge Joe Brown LOL). The BOD agreed to the new terms of the MC and just didn't want to modify the existing document to reflect that. Instead, they used the option of putting it in the official meeting notes.

It's not quite an ammendment as much as a modification of agreed upon terms...

Former HOA President
TimB4
(Virginia)

Posts:16706


03/19/2011 1:05 AM  
Posted By AnnT3 on 03/18/2011 10:24 PM
In this case, if it was approved and in the minutes, shouldn't a new contract be drawn because the other is invalid?




I'm glad you took the time and looked into the actual contract.

Remember that technically a handshake is a contract if there was a meeting of the minds. Therefore, as long as the agreement was documented, and the minutes are the official record of the Association, then the terms were changed.

Yes, I agree that the MC should have included a copy of the minutes on that change when you requested a copy. Question, who keeps those records, the Board or the management company? Personally, I think that the Board should hold and maintain all official records like this and not the MC. Similar to a disgruntled employee, if you have a disgruntled MC, the Association can end up losing a lot of items.

Have you gotten a copy of those minutes yet? You might want to contact past board members and see if they remember anything. I suspect that the change is legitimate, otherwise, your past treasurers would have been screaming at the increase on the first bill.


Tim
RogerB
(Colorado)

Posts:5067


03/19/2011 7:42 AM  
AnnT3, starting now your Board should establish a policy of having two original Agreements, and two copies of any amendments to that Agreement, signed by their authorized representative and provided to each party. Begin now with your current management company to move on from the sloppy procedures used in the past.
SteveM9
(Massachusetts)

Posts:3599


03/19/2011 8:02 AM  
Whatever the fees are..... its time you put the contract out to bid again. Now.

Let them compete with other management companies and submit a bid. Only then will you get a better idea of what fair market value cost should be for their services.
AnnT3


Posts:0


03/23/2011 12:22 PM  
Thank you to everyone who responded. The management company has not been able to produce the minutes from the meetings in which these "amendments" were made. Any suggestions on what to do next?
MelissaP1
(Alabama)

Posts:9136


03/23/2011 3:35 PM  
My suggestion: Put them on notice that you are considering putting the MC job up for bidding. You would like to consider them in the process and would like for them to submit a bid. You also would like to know what services they are providing now and when their contract ends.

Follow through with seeking bids from other sources. You may surprise yourself at what you have or you may find something new.

Former HOA President
CarolR11


Posts:0


03/23/2011 6:02 PM  
Since, according to your first post, Ann, both parties need to sign amendments, I don't think that a notation in the (mysteriously missing) minutes is sufficient.

Roger is right, all directors, or at least the board secretary, should have signed, dated copies of all contracts and amendments or addenda--starting now!
(n our 200+ high rise, we have 16 annual contracts. Each director has a Contracts Binder. Our Asst. Mgr. emails us new and renewed executed contracts and/or amendments)

I also agree with others that you need to look at other mgmt. cos. There is NO excuse for missing minutes and, because of the economy, there are some pretty good bargains out there.
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