What are the Pros & Cons of having a property manager?

How much power does the Board, Members or Property manage wield?  How much of the power is legal or in the owners – members best interest?

Is it worth the money to have a property manager?

See our page on ONLINE Banking, Quicken

Pro

Code of Ethics Property Manaagers  promise to follow if they belong to the various organizations.

CACM  CA Assoc of Community Managers

Management Firm Ethics CACM

Con

Hold Harmless Agreements

Do they Unlawfully  Practice of Law?

Worse yet, does the Board rely on bogus legal advice in violation of the Business Judgment Rule?

Does the Property Manager get the HOA in trouble with Wrongful Billing – Usury?

Links & Resources

CA Dept of Real Estate – Operating Cost Manual – Administration – Management

Business Judgment Rule, which requires that decisions by directors be:

  1. In good faith,
  2. In a manner which the director believes to be in the best interests of the corporation, and
  3. With such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (Corp. Code §7231(c).)

Code of Ethics CACM

Los Angeles Times 1.4.2015 – Manager should NOT interfere with meetings!    There is no requirement that managers even attend board meetings, and it is generally better if they do not.  There are many board directors’ duties that are non delegable, and as fiduciaries, board directors cannot delegate statutory duties to anyone.  managers  are not to interfere with the business of the board and the association.   Are the board members acting in good faith and in the best interests of the association and its titleholders?    If there is confusion about the rules and logistics of these meetings the board’s questions are better put to the association’s counsel than the manager.

Knolls Village doesn’t appear to have a property manager?

2 comments on “Property Managers? Pro – Con?

  1. Hi Steve,

    Happy New Year. Thank you for creating your informative website.

    We have around 100 units Condo Assoc. in California.

    We are recovering from:

    a board of directors that ignored needed repairs and didn’t raise monthly fees when needed, and a COA Condominium Owners Assoc.

    a Property Manager that liked to stir up legal issues, and everything else he could think of, to increase his hourly charges. The new management accepted a huge monthly fee for handling owner and property issues, and bookkeeping. Unfortunately, they use https://www.appfolio.com/ for the books, which never creates accurate results.

    We have done all we could to avoid the management fees associated with repairs by getting our own bids and overseeing the work. One of our bids done by a company who has successfully done work for a board member was $20,000 less than the management company’s recommended contractor. And we save the 5% property management would have tacked on. Who is going up on the roof to confirm an acceptable roof job anyway?

    So if we are already getting bids, overseeing work, and handling owner issues, do you recommend we hire our own accountant and do the things that property managers do, but without the various markup fees p.m.’s use because most associations do not watch the books?

    We keep track of CD’s coming due and the insurance policies. We use contracts that protect the COA against faulty work by contractors.

    We are up to date with the Stirling Davis CC & R and voting codes.

    I will not hold you liable for your opinion,

    Name redacted
    Board Member

    • I can’t really give you an opinion or recommendation. IMHO you’ve answered your own question. Property Management isn’t my day job. I certainly don’t want to be thought to be giving legal or tax advice.

      That said, do your board members really want to spend the time to learn the law and review the books?

      I created this website, as it seems that many Boards want to do the work and thinks that a Property Manager has to do everything. Boards may think that it’s a requirement to have a Property Manager. The members don’t seem to care. I also found that there are really no other websites to help Board or Members learn their rights & responsibilities.

      IMHO an accountant would be better for managing your books and finances than a Property Manager… Do you have enough people to oversee all the things that need to be watched?

      How is the old board doing? Are they going to sabotage the work the new board wants to do?

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