Tag Archives: Property Management

Condo Developer Transition Turmoil

S.C. from Litchfield County writes:

Dear Mister Condo,

Our Board does nothing. No communication, they don’t respond to our questions very well, they are not transparent when they communicate among each other (which is not too often) and my biggest beef, they refuse to fix our crumbling infrastructure (roads, outside siding, fascia boards, etc.). It’s one delay, one excuse after another and this has been going on for almost 3 years. Money is tight, they do not properly fund our community yet they are raising the dues and still operating with a negative balance. No one on the board lives here full-time and the president and one other member work for the developer. Clearly, their priorities are not in sync with the homeowners. Most residents will not say a word for fear of being the bad one or simply a case of extreme apathy. I want to round up the troops and have all the board members (well, 3 out of 4) removed. Having been the president of the association and property manager, I have plenty of experience.  I do not know what kind of reaction I will get but I do know there will be some support. Any response from you would be great and I look forward to it. Thank you.

Mister Condo replies:

S.C., I am sorry that your condo Board is not performing to your expectations. However, from what you have told me, the association is still under developer control so the Board truly has limited power during this time period. Once control is handed over to the association, things will change because no one will be beholden to the developer. The association governs itself and many of the items you discuss can be addressed through democratic elections of interested and able volunteers. Now, if the developer has broken covenants with the owners and you think a lawsuit is in order, you might want to discuss your situation with an attorney. However, new owners like you describe may not go along with spending money to sue the developer so you may just need to wait until the developer transition period is complete. If I have misread your letter and the developer transition is already complete, you simply need to elect new leaders for your community. You will need volunteers ready, able, and willing to serve. They will need training and support. You should also consider hiring a community association attorney verse in developer transition, and accountant, and a property manager if needed. The developer’s team was there to support the developer, not the community association. Getting the right folks in place is vitally important to your association’s success. Your local CAI Chapter can help you find the resources you need. Visit http://caict.org to learn more. Good luck!

Condo Reserve Study Reveals Major Shortage

B.P. from outside of Connecticut writes:

Dear Mister Condo,

Our new condo management company did a projection study. Unit owners received a letter stating that each unit will be assessed $50,000 payable over a 30-year period unless we vote to take over inside and outside of our units. Is this legal?

Mister Condo replies:

B.P., I’ve never heard of such a thing but that doesn’t make it illegal. The whole idea of a condominium association is that the association is responsible for all common elements, which includes the exterior of the buildings. Individual unit owners do not own the building exteriors so they are not directly responsible for the care and upkeep of them. I say “not directly” because unit owners do have to do two things to make sure their properties are well maintained. The first is to pay their common fees on time. Common fees are the lifeblood of the association and include a contribution to the Reserve Fund, which is where the money to maintain the common elements should eventually come from. Second, and equally important is that unit owners need to elect responsible folks to govern their association. The Board is directly responsible for overseeing the upkeep of the association. They typically do so by hiring outside contractors and management companies to implement this duty but they are the ones representing the association in all matters regarding maintenance and preservation of the association’s common elements. Your governance documents clearly spell out the duties of the association with regards to common elements. If I had to guess, I would say that the communication you received is not properly communicating the message of a Reserve Fund contribution. $50K contribution over 30 years is a little less than $140 per month. Without knowing the amount of assets your association needs to maintain, I would say that is not an unreasonable number for monthly Reserve Fund contributions. I would hope that your association is already collecting these Reserves as part of your monthly common fees. If not, this letter may have been meant to serve as a warning that there is going to be an increase to your common fees to cover the necessary Reserve Fund contribution needed to maintain the community. The “projection study” conducted by the management company may have actually been a “Reserve Study” and they are simply conveying the results of the study. Either way, your association needs to build a healthy Reserve Fund so future repairs can be afforded. Every single common element is aging as we speak. Money needs to be collected today for those replacement projects tomorrow. All the best!

Condo Board Should Perform Property Manager Review

J.B. from Hartford County writes:

Dear Mister Condo,

I am new to our condominium board. The previous board never reviewed our property management company. I would like to do that on an annual basis – to assess their work and performance for the year. Do you have any suggestions as to how to do that (quantitative, qualitative) and who should do it (Board only, homeowners)? Thank you.

Mister Condo replies:

J.B., reviewing the work and services of every vendor employed by the association is a great idea. The Property Management Company is just that – another vendor. However, unlike other vendors who perform work and leave, the Property Manager is with the association 24/7, 365 days per year. Generally speaking, if the Board is unhappy with the work or the price paid for the service, it is known immediately. Also, Property Managers have contracts, usually for multiple years. These are not easily broken unless clauses have been violated. If you were to review a management company at Year 2 of a 5-year contract and determine you were unhappy, you couldn’t simply break the contract without consequences. That doesn’t mean you shouldn’t review the work, just understand that you have limited options to remedy any dissatisfaction until the contract is up for renewal. The best review I know of is to pull out the management contract and assign a grade system for each of the functions that the Property Management firm is responsible for. Typically, that would include accounting and bookkeeping, customer service, and service to the Board. Additionally, many property management firms also handle interactions with vendors and contractors, and may even provide certain other property management services such as landscaping, snow and trash removal, handyman work, etc. While you may seek feedback from homeowners, the Property Manager works for the Board. The Board would be the appropriate group to review the work. Good luck!

Last Resort at a Resort Condo

M.M. from Texas writes:

Dear Mister Condo,

I live in a resort condo in Texas. About 5 months ago board hired managers. The GM quit for some unknown reason after some questions a few of us asked. Now, the president of HOA has given the job to someone seemingly to be unqualified. A former member of the board asked to see her resume. I was shocked when president said he talked with an attorney and he didn’t have to show this person’s resume. OK, weird, and I sat in on board meetings. She reported to Board what was being done and gave credit to a favorite supervisor/friend she hired. Well he wasn’t the employee that deserved credit and I know there are things she hasn’t done. I live here. 96% of the owners use it as vacation home or do short-term rental. I know and see what goes on and what the GM isn’t doing.

There is no leadership anymore, barely a schedule, no time clock, no work logs, no evaluation of housekeeping after they have finished. There is no inventory of tools and nothing is being checked by anyone. She has filled the staff with good friends. The president of HOA seems like he is protecting her. How can we get rid of her before we are all bankrupt? What can I do as owner of condo and co-owner of the building.

Mister Condo replies:

M.M., I am sorry for your troubles. I am sure it is very disheartening to see all of this unfold under your very eyes. I am guessing you already know what I am going to tell you. Regardless of how you perceive the association is being run and governed, it is the duty of the Board to protect the association from financial ruin. In a resort community such as the one where you live, the owners rarely get together. Many cast their vote by proxy and simply look at the bottom line when making decisions on who will serve on the Board and as officers. Are the other unit owners content with the way things are? If yes, things aren’t likely to change. If you were to shed light on what you are seeing and experiencing, they may be inclined to vote some new blood on to the Board and leadership positions. Perhaps you would make a good candidate for the role? Other than that, unless you witness some criminal activity, the Board hires the manager and has a say in who the manager hires but that is about it. Unless you are in a leadership position within this association, there isn’t too much you can do. If your rights as a unit owner have been violated and you wish to take action against the association, you might want to speak with a locally qualified attorney. Based on what you have expressed here, I don’t see where that is necessary. The Board has been democratically elected by the unit owners. Unless those unit owners are prepared to remove the Board members, nothing is likely to change. Good luck!

Condo Management Company Influencing Board and Unit Owners

L.B. from Hartford County writes:

Dear Mister Condo,

Can a management company interfere with the board? Specifically, by asking to have a member resign or complain to only a few of the 5-member board about another member? And allow statements to be used and passed to unit owners in an effort to get the required signatures for special meeting to remove said board member?

Mister Condo replies:

L.B., the function of the management company is to assist the Board as outlined in the management company contract. This is typically handling all things financial and accounting such as collection of dues and assessments, payment of vendors, and collection efforts, budget preparation and so on. Governance of the association is strictly the duty of the Board. However, due to the nature of Boards being served by volunteers, it is not uncommon for a Board to rely upon the knowledge and expertise of a management company to help them make good decisions and keep the community association and Board on track. That being said, you have described a campaign to remove a Board member led by the management company. This is not a common practice although I am not sure it is illegal. You would need to review the laws for your state to see if that is the case. Other than that, the management company can only suggest things to the Board that the Board can either ignore or take action upon. In this case, it would appear that the Board is in agreement with the management company. The Board can always select another management company if the existing management company isn’t serving their best interests. If the Board is pleased with the performance, that isn’t likely to happen. Regardless of the source of information, if a Board member is recalled by the unit owners, there isn’t too much the Board Member can do. After all, this is an elected, volunteer position. It is not like they are being fired from a paying job. It is politics and being voted out is always a possibility. Good luck!

Condo Cleaning Contractor Petitions Unit Owners

B.B. from outside of Connecticut writes:

Dear Mister Condo,

Hello Mister Condo! Our Condo Board has a service contract with a cleaning contractor to provide cleaning services for our condo properties. The service contract has been uncontested for 15 years. One full-time on-site contract employee has been the same person for 15 years, the other part-time employee has not served as long. There has been an increase in complaints about the cleanliness of the properties, and after requesting a copy of the service agreement from the Property Manager, the Board realized the staff is not addressing all the tasks included on their contracted weekly schedule. The lead staff person is a nice person, and the President of the Board makes excuses for his not addressing his weekly schedule, by using snow, heavy rains, equipment breakdowns, unit owner issues, etc. as the reason. Complaints about housekeeping started to be mentioned at the monthly Board Meetings, and letters were written to the Property Management Office, which prompted a Housekeeping Committee to be created and a walk-through to be conducted of the properties. A revised cleaning schedule was recommended.

The President of the Board and Property Manager do not wish to change vendors as it would disrupt their schedules, and the Property Manager would be required to be on-site more often. The cleaning staff have become an extension of property management, and share responsibilities with the sole part-time maintenance employee, with maintenance tasks, plumbing, heating, issuance of parking passes, passing out flyers, etc. All the while, the properties are not being cleaned. Somehow, after much debate, we are now at a point where we are now entertaining new proposals from competitive cleaning contractors, of which the President of the Board is trying to diminish or do away with. The existing contractor has also been given the opportunity to revise their contract to put together a more realistic job description for their staff.

One week before the Board is to review the competitive bids for a revised or new cleaning service, the contract cleaning staff took it upon themselves to go door to door and camp out in the building lobbies, requesting signatures from unit owners to retain their services! What Unit Owner would feel comfortable not signing this petition? In the meantime, they are still not fulfilling their cleaning contract work schedule and their effort is minimal at best. Five Board Members have signed their petition, which means they are settling for mediocre services because they don’t want these employees to lose their jobs. In the meantime, the employees are stubbornly refusing to fulfill their work contract because they feel they have the support of the President of the Board and the Property Manager.

What does one do in this situation? What do you recommend? Some Board Members will not challenge the existing President, who is a bully. The cleaning staff are taking their lead from the President of the Board. They feel they have his support. This is more than frustrating. All we want is a clean building with staff that respect their positions and do their work. Property Management work is much more appealing than the actual cleaning that is required. Thank you for your time.

Mister Condo replies:

B.B., this is an unfortunate situation but not uncommon. Ultimately, the Property Manager and the cleaning service report to the Board. If the Board is unwilling to correct their behavior then nothing is going to change. Unit owners control who serves on the Board, including the President. If the Board is underperforming, it is time to vote in some fresh blood who will act in the best interest of the unit owners, and the unit owners only. A new Board may also wish to select a new Property Manager when the contract comes up for renewal, especially if the current Property Manager is underperforming as you have suggested. Of course, all this takes a willingness to serve from folks like yourself who are fed up with how thing s are being handled. If no new volunteers come forward, things are unlikely to change. Good luck!

Noisy Condo Neighbor Ruining Renter’s Peace and Quiet

P.M. from outside of Connecticut writes:

Dear Mister Condo,

I am dealing with a neighbor at condo. I am a renter; she is not. She is loud and noise every night until at least 1:00 a.m. The owner I’m renting from is lazy. I can’t wait until May to leave next year. I tried talking to this neighbor and had to call police twice. The manager of the association says they will send a letter but the problem still persists. Recently, a picture fell of my wall and broke. She stomps on her floor on purpose and intentionally drop loud objects. I am so angry I can’t sleep. What can I do?

Mister Condo replies:

C.J., lazy or not, your landlord has a responsibility to provide you with a rental unit as outlined in your rental agreement. Most likely, that agreement included a copy of the rules and regulation for the condo association where you reside. Inside those rules, there are the steps for complaining about another unit owner or resident that isn’t following the rules. Typically, a report is made to either a Property Manager or directly to the Board. There are usually rules about acceptable noise levels, quiet hours, and peaceable enjoyment for unit owners. As a renter, you may or may not have the ability to directly lodge such a complaint, meaning it may need to come through your landlord. If your landlord refuses to support you in this effort, he may be breaking terms of your lease which may leave you the opportunity to end the lease early. However, if you decide to break your lease early you may be out of your deposit or create a legal battle between you and your landlord. My practical advice is for you to motivate your landlord or have him give you the power to work directly with the Property Manager or Board to bring about a resolution. Understand that it may take time and as the months go by towards the end of your lease, the simplest solution may be to not renew your lease. If you decide to break your lease, speak with an attorney to see what legal and financial consequences you may be incurring. It is an unfortunate circumstance to say the least. However, in tight living spaces as many condos offer, an unruly neighbor can make living there unpleasant. Good luck!

Are All Condominium and HOA Documents the Same Regarding Common Elements?

J.J. from New Haven County writes:

Dear Mister Condo,

Hi Bob, I just listened to the podcast about the alligator in the condo fountain (http://askmistercondo.com/alligator-in-the-condo-fountain/)! I have a question that I am hoping you can answer. But, a little on me. I have been involved in the community association maintenance business since 1978, with the last 17 years as a general contractor specializing in condo buildings repair and capital improvements. I have worked for various management companies over the years. Some good and some not good. My question is I understand the laws have changed some years back in regards what the association is responsible for as far as maintenance. When I started, I learned the association covered to the drywall. Now. I am hearing the association covers a lot more inside the unit. I ask managers and no one either knows or won’t give me a straight answer. Can you help so I may service my associations with correct knowledge?

Mister Condo replies:

J.J., the answer literally varies from association to association so there isn’t a “one size fits all” answer. Additionally, I know of some associations that have modified their rules based on “how we’ve always done it” situations, regardless of what their governing documents say. Also, we have a few different types of common interest communities operating in our state and each has their own peculiarities. Condominiums are the most common and your explanation of from the walls in is quite common to describe what the unit owner is responsible for. Planned Unit Developments (PUDs) are also common in our state and often have the same type of rules. Cooperatives (coops) are also plentiful and have similar but not exactly the same rules. Homeowners or Property Owners Associations (HOAs and POAs) are also common but seldom get into the unit interiors. These groups are typically about architectural conformity and shared common amenities (a clubhouse, pool, beach, etc.) Within each of these groups are additional subsets (Adult Communities, 55 and over, Assisted Living, and so on). As you can imagine, each has their own set of governing documents and each has their own specifics on who owns and maintain which elements.

As a contractor to an association, you are going to handle the work assigned to you by the association. You should ask the association where the association responsibility ends and the unit owner responsibility begins. Short of you taking the time to read all of their governance documents, you would have to operate under the assumption that they know what they are talking about. If you complete their work order, and they pay you for your work, it is of no concern to you if they need to then bill an individual unit owner for work you did on their behalf. If they are asking you to bill a unit owner for work you performed at their request, I would ask them to change that arrangement for the sake of your business relationship with the association. You know the association will pay you for work you have contracted with them. You have no way of knowing if a unit owner is going to pay you for work done to their unit at the association’s request. After all, they didn’t hire you. I know haven’t given you a “cut and dry” answer here but that is the nature of the industry. Keep doing the great work you’ve been doing and I am sure the issues of responsibility for maintenance will work itself out, association by association. Good luck!

What to Look for in new Condo Property Manager

D.G. from New York writes:

Dear Mister Condo,

I saw you speak at a recent CAI Long Island chapter meeting. We are looking into a property Management company. What specific and important questions should we include in our Request for Proposal. Also, can you offer some suggestions on important questions to ask Property Manager company during the interview. Thank you for your assistance.

Mister Condo replies:

D.G., thank you for your question and I hoped you enjoyed my presentation. It was my pleasure to address the membership of the CAI Long Island Chapter. I hope to be invited to come back and speak with your group again. I have a new page on the website describing the program if you care to take a look – http://askmistercondo.com/mister-condo-live/

On to your questions. I am happy to learn you are seeking some advice BEFORE hiring a Property Management company. It is not like buying a T-Shirt, where One Size Fits All. There are many different types of Property Management companies and even Property Managers within the company. Obviously, reputation within the industry is important. You should certainly speak with other CAI Chapter members who have hired Property Managers and ask them how pleased they are with their choice. Referrals and reputation play a strong role in Property Manager selection.

Your request for Proposal should include all of the services you want the Property Manager to perform. Will they simply handle your bookkeeping needs? Will they perform on-site inspections? Will they provide Property Maintenance services like landscaping and snow removal? Will they need to provide on-site personnel? For smaller associations, the management needs can be fairly simple. For larger associations, the needs can be quite significant. You should work with your Board to answer the questions before you prepare your Request for Proposal (RFP). Additionally, I know of many community association attorneys who like to be hands-on in the RFP process as they would prefer to help in a pre-emptive manner rather than having to deal with a potential problem that could have been avoided. Something to think about.

During the interview, one of the questions I like to ask is if the Property Manager can describe a recent challenge and how they helped the community overcome it. While this may not be the same challenge your community will face, it may give you an idea of how this manager operates. If you are facing a current challenge, you might want to ask how they would solve the challenge. Again, this will give you an insight as to what to expect once you hire them. Of course, I am a big fan of hiring Property Managers that are active in CAI. That signal me that they are industry professionals and are keeping current on their training. As you know, laws change, technology changes, and the overall methodology changes as well. CAI Member Property Managers tend to be “in the know”, which is a tremendous benefit to their clients. Hope that helps. All the best!

Can the Condo Property Manager Sue Me?

M.Z. from outside of Connecticut writes:

Dear Mister Condo,

Has the property manager the right to fine me or sue in court?

Mister Condo replies:

M.Z., I am sorry you find yourself at odds with your Property Manager and now need to inquire if you can be fined or sued. The answer to both questions is yes, but with a few caveats. Property Managers work for the association and are granted their powers to enforce the covenants of the association by virtue of their contract with the Board to do so. They cannot make up offenses that you can be fined for. If you are in violation of your community’s rules and regulations, the Property Manager can issue you fines as outlined in the governance documents and in accordance with local and state law. In many states, unit owners who have been cited for violating rules must first be summoned to appear before the Board and state their case before the fine is issued.

Suing you is a different matter entirely. As an individual, almost anyone can sue anyone in this country. The Property Manager can follow the Board’s instruction to bring suit against a unit owner for a couple of reasons. The most common is that the unit owner is in arrears with the association. Delinquency of common fees or special assessments are the most common reasons an association would sue a unit owner. An ongoing dispute over architectural compliance issues is another. In both of these instances, the Property Manager is acting on behalf of the Board. If you and the Property Manager got into an altercation (I hope not!) and the Property Manager decided to sue you personally, that is certainly their right.

The bottom line is that you should speak with an attorney if you are being sued. Personally, and professionally, the Property Manager can bring suit against you. You will want to defend yourself. I hope it doesn’t come to that. Good luck!