Why Isn't The Management Company Controlling The Board??

The second most popular complaint I receive (aside from the rogue board president) is that of the management company NOT doing their job. When tempers flare and political drama goes into a frenzy, one of the common misconceptions is the management company is supposed to keep the board members in line and make sure they act properly. Many homeowners feel that the Management Company has the authority to fire the board. One recent call I entertained advised me that the management company was allowing illegal things to be done by the board. Many also claim that the management “should seek out law enforcement so the board does their job”.

Let’s look at the management company’s role. A management company is a business entity. They are there to provide a service. That service is spelled out in the management contract. I have yet to see a management contract that states the management company will press charges on behalf of the homeowners if they suspect criminal activity. The management company is there to “guide” the board. Management companies are there to help the board achieve specific goals. Management companies are not hired to be confrontational and bully the board. Believe me, I have seen it dozens of times where the management company provides guidance, and the board does not heed that guidance. Management companies have duties to perform, such as maintenance oversight, financial processes, vendor relations, bid analysis, etc. Have you read the management contract for your association? That contract will spell out the duties owed to the association. Prosecution of illegal activities is not on the list of duties.

What do you think would happen if a Management Company tried to force the board to perform a certain way? They would be fired. That management company would no longer be in the “management business” for your association. If you have a board in place that is consistently behaving improperly, that is the type of board that will terminate a management company’s contract. The management company and the manger do have a duty to be truthful during audits and other legal processes. This applies to everyone (or there are consequences). Chances are that most management companies and managers have plenty of proof that they have provided proper guidance to the board.

Well, what about that “terrible manager” we have that “does nothing”? This is another case altogether. I cannot count how many great managers I have known that have lost their jobs because they were “doing the right thing” by telling a board that “THEY were doing the wrong thing”. Crazy board members do not like to be told they are doing something wrong. Many of those board don’t have a clue that they are not acting properly. The manager for your association has their specific duties owed to the association. If you don’t feel they are performing well, look back to the management contract. One main concern homeowners should have about their manager and management company is ongoing continuing education and personal development. Is your manager seeking out the industry designations such as CMCA or PCAM? If not, your manager may be missing out on valuable information and procedures that can help your property. If you like your manager but feel they can improve, look into the professional designations offered at www.caionline.org .

But what if we know the manager is in bad dealings and short-changing our association? Have you discussed this with the management company that employs your manager? Is there a Regional Director that should be making rounds and checking that contractual obligations are being adhered to??If you have a good management company, this process can quickly resolve the issue. Many times, the manager can be replaced, and you still have the same management company on hand. Turnover of a management company that has been there for years can be confusing and time consuming. A lot of information can be lost during a transition.

Are there bad management companies? Sure, of course. Can you switch them out? Of course. I only urge you to investigate the duties owed to your association per the contract first. Most management companies are busy with dozens or hundreds of clients. If you make an effort to reach out to their corporate leadership first, you may receive better service and long-term better management.

If you have feedback on this article or would like to know more about an investigative evaluation of your association, please reach out to me at www.HomeownerAssociationConsulting.com

Karel Costa-Armas, LCAM, CMCA, AMS, PCAM

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