I’m on the board of my Home-Owner’s-Association. We recently decided to start using a Management Company and that’s where the trouble began.
Late last year, we had to have many meetings (more than usual) because a few board members were not satisfied with the money we were planning on spending on some repairs around the complex. Even though they were voted down, we wanted to make sure everyone was happy so we never started the work. We decided to use a Management Company to help us make decisions about which companies were reliable.
We would have one faction saying contractor A was good, while another faction would say contractor A was bad, and we should use contractor B, but the first faction disagreed on both counts, so we thought a management company could help us decide. (As well as provide many other benefits to us.)
Our last meeting was to weigh 2 different management companies that came in and pitched us on their styles and procedures. We agreed that one was better and decided that we should bring it to the entire Association. After the meeting, and this is where things get sticky, it was decided that the entire associations approval was not necessary and the president signed the contract with the company the Board liked.
Now a minority of the Board say that it was not in the President’s right to sign that contract and they want to have a major upheaval at the Association meeting.
Since New Year’s Day there are secret meetings going on, battle lines being drawn and a countdown to a major bombshell going off.
Now I’m unsure about how this will all turn out. The Management Company representative will be at our meeting to introduce themselves/describe how best they can be used, but since some board members and a few association members don’t want them there it will probably start the meeting off poorly, and only go downhill from there.
The only thing I’m sure about is that after the big meeting, there will be one group of people who I live with(near) who will be upset.
Heh. I’m confident that there are a number of posts I’ve made about the insanity that was my HOA. I moved out about two years ago because (a) I was stupid and thought the good times in the real estate market would continue forever and (b) my HOA was making me insane. Ultimately, even though my new place has lost about a quarter of its value since I bought it, I’d still do the same thing to get away from the HOA.
We had 14 units, and a five member board. Which meant that as a practical matter we pretty much had to get everyone’s buy-in to do anything. And there were some real disagreements among members. It got to the point where I was spending between 20 and 40 hours a month on HOA business, and I realized that because I was one of the few people who were actually committed to caring for our homes, I was carrying a number of other members.
It made me pretty insane, and kind of unhappy to live there. Whereas, in my new home, lacking an HOA and outside city limits (thus no city rules), I am truly in charge of what goes on. Sure, my neighbors sometimes do crazy stuff, but nowhere near as crazy as the HOA.
So I hear you, but I got out, and I urge you to do the same if you can.
Oooohhh… The ever popular Votie Hairy Poopie Thing. (A name given to a particularly contentious issue that ultimately led to the unhappy dissolution of a non-profit group I was with about 10 years ago.)
What do your HOA’s bylaws have to say on the execution of contracts? If the president is entitled to sign contracts, then that minority faction needs to shut up. Of course, we all know that they won’t, so feelings will be hurt and this is going to stick in people’s craws until all members of the board have either died or resigned and moved out of state.
It sounds like your board doesn’t have a good handle on governance issues; i.e., when and how the Board has authority to act and when the association’s vote is needed (typically the budget and certain unbudgeted expenditures, pledging future revenue, etc.).
The other thing to understand is that you can’t please everyone, and it’s more important to comply with the relevant statutes and bylaws, otherwise you may be creating bad precedent for future Boards; i.e., bringing things to an Association vote that don’t require an Association vote.
I was so glad to resign from my condo board, except the new board has run the train off the tracks in less than eight months…
Our builder went bankrupt before they built enough homes to open board seats to residents. Trying to find out what is going on with the HOA is impossible. The management company tells us to contact the builder since they hold all the board seats. The builder is in the process of winding down operations so no one will answer the phone. And no one can tell us what will happen to the HOA after the bank forecloses on the remaining lots (the builder has stopped making payments and cannot find a buyer).
I would love to have the HOA problems you’re having now.
This should be VERY easy to figure out.
How big is your HOA? How long has the board been self-managing?
File under “there’s always something worse:”
My HOA’s problems involve a previous management company not collecting unpaid dues, not paying bills, and continued with the revelation that the guy was also stealing money. Then he disappeared after being fired by a hostile new board; any and all records of any actions during the years he was there were also gone (if they existed).
Well, as to whether the Board had the right to sign the contract: what do your CC&Rs say? Ours are pretty specific about what sort of things need approval by the entire building (well, a quorum, anyway) and what the Board can do on their own.
Now, even if the CC&Rs say the Board had the right to do that, that doesn’t mean it was the smart thing to do, politically – as you’re finding out. I mean, you do still have to live with these people and stuff.
That said, I think a management company is probably a good idea. We have one, and our building is only 8 units. It means that the bills are likely to get paid, someone is probably keeping records, etc.
Just keep your head down, and it will probably blow over eventually – maybe someone will move out and you’ll get some nice new neighbors who don’t have a dog in this fight!
garygnu, The board has been self managing for over 30 years. (2 of our current board members took over 30 years ago) There are 7 Board members for 25 owners. Our CCRs only mandate 5, but somehow it grew to 7. A few of us keep arguing over who were members 6 and 7.(trying to say: “boot me! I was last!” “No I was last, boot me!”)
KSO, Our CCRs are horribly out of date, and will be the first priority of the Management Company. Especially in terms of number of board members, term limits and the next set of elections. Second priority is figuring out how to run the board meetings in an official forum.
I’m glad to hear we aren’t the worst off. I hope the rest of the Association can agree to that. We’ll see.
Since you’re on the board, be sure that a real (and experienced) lawyer is writing up the new CC&R’s. Your new management company probably has lawyers they work with for this sort of thing. One big advantage of a reputable management company is that they act as a buffer between an association and fraudulent contractors, lawyers and other agents.
In this case it may be decided a new set of by-laws governing the above issues may be better than a completely new set of CC&R’s. It may be cheaper and faster. Good luck in any case.
FTR, my wife works for an HOA management company, so if you have any questions, I may be able to get unbiased, but completely casual and unofficial answers.
Agreed. There were a number of changes to the condo law a few years ago that rendered many old CC&Rs unenforceable (things like dispute resolution, etc.). So what mostly happens now is that instead of “rewriting” your CC&Rs, you can buy a new standard set of CC&Rs. Not that expensive, as I recall (I mean, yeah, it was a couple thousand dollars that of course no HOA budgets for because who thinks of their CC&Rs as expiring?).
We found a local law firm in Pasadena that specializes in condo law; we didn’t have to rewrite our CC&Rs but needed to amend them on one issue, and they were very helpful in doing that, including coming to a meeting (to which no one but the board showed up anyway) to explain the amendment.
