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Community
Association Managers:
“…And
lead us not
into temptation…”
By Jan Bergemann
Published April 27, 2012
There
are good managers – and there are bad managers. And then there
are the honest managers – and the dishonest ones. Temptations
are huge, especially if the board allows the manager (or the
management firm) to run the whole show. Community association
managers (CAMs) are called MANAGERS
for a reason. They are not called CEOs nor are they called
attorneys. They are supposed to manage the community association
under the direct supervision of the board of directors.
Board
members have to understand that they are responsible for
anything that happens in the community, even if the board gives
the manager huge leeway. If under attack, managers always use
the so-called
Nuremberg
defense: “I acted on orders!”
It is of
outmost importance to choose the right manager (management firm)
for the specific needs of each association. Recent changes in
the DBPR policy have made it even more difficult for boards to
make the choice, since the DBPR is now protecting the “bad
apples” by hiding complaints from public view. Board members
are now forced to make public record requests in order to find
out where their future manager “stands.”
When
looking for a management firm, make sure you pick a management
firm, not a big corporation which under various names sells you
– often unknown to you – all kinds of services, which can
easily lead to conflicts of interests. These managers will
always push the services of other corporation-owned firms, not
always to the financial advantage of the association. These
multi-service firms often underbid competitors when quoting
prices for a management contract. They can afford it, because
they count on the higher profits from other companies under the
umbrella of the parent corporation whose services they
“push.”
When you
solicit a bid for a contract, please make sure that you start
with a list of services you want your future manager (or
management firm) to perform. Depending on size and amenities,
not all communities are equal. You have to create a management
contract depending on the specific “needs” of your
community.
No
matter what, the directives should always come from the board.
The board should directly contact the association attorneys and
spend money on legal fees. Board members should be signers on
the association checks – not the managers. The board is the
CEO – the manager is the hired hand. Never forget that!
You hire
a management company to manage, not to be in charge of the
community. The more “power” you give the manager, the more
trouble the association can get into.
Always
remember: The association hires a manager for his/her expertise
in managing a community – not for anything else.
The list
of complaints against managers is very long. I have seen many
associations getting into serious legal trouble caused by
mistakes of the manager. And the association pays for these
mistakes – not the manager!
Don’t
let a paid manager sit on the board of directors – that’s a
lawsuit waiting to happen. If one of the owners feels that
he/she is a knowledgeable
CAM
(with a license) and wants to get paid for his/her services,
please ask that person to resign from the board – before the
discussion even starts.
And
giving the CAMs signature power over your accounts is asking for
trouble.
v
CAMs are normally not bonded – as we have seen in many cases where CAMs
embezzled money. In many CAM contracts the
CAM
even requires the association to carry their insurance.
v
If you want to cancel the CAM contract, you may run into problems getting
your money back – or you are getting back what the CAM feels
is right after deducting any and all bills and a possible
penalty for “breach of contract.” Remember: Legal disputes
always favor the guys who have the money, not the ones who would
like to have the money back!
When
you are deciding to hire a CAM for your community, please
“research” the history of the
CAM
(or management firm) you are considering for the job – even if
you have to do a public record request with the DBPR to find out
the complaint history of a particular manager or management
firm.
A
good manager can be a real asset to your community -- a bad one
can really cost you big time. When in the process of hiring a
CAM
for your association, DUE
DILIGENCE should be the MAGIC WORDS!
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