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The problem with this, is that the property management companies are in a very good position to rip off HOAs. Not saying they all will, but if you look at their position, it's easy for them to be able to really run the show and hand out sweetheart deals to their associates in, say, the pool maintenance business or driveway pavers or landscaping - you name it.
Because most of the board members are only qualified to help run a HOA, simply because the only requirement is that they be an owner. They do not have to have any knowledge of real estate or property management or fiscal management or maintenance, or landscaping, etc.
So, what I saw happen when I got on the board at my HOA, was that the board members, most of whom have no idea what they're doing and only got on the board because of some pet peeve or agenda, like wanting to get rid of the cat lady or to get people to stop growing tomatoes on their balconies or to penalize people who don't pick up their dog's poop --- is that they pretty much just end up doing whatever the manager tells them to do.
And the manager will bring to the board meetings suggestions, like the pool needs maintenance or the driveways need to be repaved, etc., etc., and they will have someone they know who can get the job done.
The year I was on my board, the pool needed an insane amount of maintenance, to the point where I started saying, what the heck? And the other board members didn't want to deal with any kind of potential problem, so just voted to do whatever the manager suggested.
I felt sure the manager was either financially involved in these maintenance businesses or was getting some kind of kickback.
If you think about a HOA logically, and put it into a different scenario, it's really insane. Just imagine investing in something to the tune of a quarter of a million dollars or more or less -- and allowing total strangers the ability to make financial decisions that could destroy your investment. And not only strangers, but strangers with absolutely no experience or knowledge in managing your investment. But, majority vote rules on all decisions that affect your investment. And if they destroy your investment, they are not liable.
It's really nuts. I think they're a really poor investment. Right up there with "buying" a mobile home on land you don't own and with rent and HOA rules that can change and go up and up and up, with no future security whatsoever.
Plus, they're really hard to sell! And sometimes the board can also prevent you from selling to anyone you want to sell to.
I always advise people to not buy anything if you don't own it free and clear (fee simple) without any HOAs involved. That's the only way you have total control over your investment.
Whether they are really hard to sell depends on the area. In FL, HOAs are pretty normal and it is pretty hard to find a newer home without even a master HOA (for $500-700 a year). There are people who are happy to go into master planned communities with rigid HOAs.
I will ask again. How often are your charged the condo fee? Who sends the bills out? Who receives and deposits them? Who gets the monthly report of disbursements and receipts?
The reserve study is simply that. We just finished our study recently and are waiting for the corrected copy as there are some mistakes in the report in terms of ownership of infrastructure.. Now we are different, as we are not a condo. Several things on it, are items for discussion in terms of replacement. Much like your mailboxes there are items that need discussion. For example, we have an indoor pool and clubhouse. Our clubhouse is carpeted and "due for replacement" according to the reserve study. The board looked at the carpeting and decided that "in their opinion" the carpet was really not in bad shape overall and have put off replacing it and decided to simply have it cleaned. We have meetings 11 months of the year and a Spring informational meeting and an annual meeting. Every resident can speak up about the concerns they have, if any, and I anticipate that at the spring meeting, a board member will say that they reviewed the reserve study and while these items have been identified as "due for replacement" the board has decided to put replacement on hold and will review it again in the future. It goes on a review list and they will consider it again.
Now, if a mailman reports that opening your boxes to sort mail into them is problematic, then the condo needs to repair/replace them, if necessary even if you "think" they look fine. Again, just because you don't believe they need replacement does not necessary mean they don't or that they do for that matter.
I made a suggestion that you contact a realtor or Attorney General to see if you have a department that handles common ownership dwellings. IF your state does and you truly believe that there is gross mismanagement, you owe it to yourself and the community to seek help, instead of just asking here. Based upon your description of the board, a reserve study would just be a license to spend, which is sounds like you are against.
I strongly suggest you ask for a copy of an audit and if you don't have one, you should.
On this note.. a few years back we did an extensive search. It was beyond depressing. First, for a small condo, you just aren't going to get a quality company that will do very much. The price would be prohibitive.
Several good companies wouldn't even respond to our requests because of our size. We looked at small condo companies and they were all poor and ethically challenged. Meaning that they promise the world and then do none of it. A simple look on google found plenty of complaints. In the end we chose a medium company that I want to keep because it has tech facilities which mean that the board doesn't have to wait for the property manager to do it. We don't have the property manager there for meetings -- they don't do the minutes. But I didn't mind that because the last property management company did minutes but they did them inaccurately that wasn't a help either. (and after tons of nagging)
But what really annoyed me what that when I got off the board there was NO continuity by the management company. They view themselves as our employee and they don't run or manage anything. They report. The board decides. So they aren't going to so much as mention anything to the new board without being specifically asked. They pay our bills and they produce financials and tend to maintenance requests but that is just about it. There will be no continuity with them.. or.. they aren't in charge of that. The give advice that will CYA them and that is all.
Not sure where you are but snow removal expense is the big one for condos in the north. We pay about 10K per year for snow removal. There can also be expense for ice dams and removing snow off roofs. Knock on wood but this year it looks like we might luck out and get some money saved.
Yes, snow removal can be a big expense. In the seven years I have lived here, we have had one special assessment of $150 when we went over our snow removal budget because of a lot of storms with high accumulations one winter. (Owners had the option to pay $50 a month for three months.)
Fortunately, in the past couple of years we haven't maxed out our snow budget. Hoping to get through this winter the same way.
I am not sure how "small" your complex is. I thought we were small compared to some others in the area, but we have 122 units here. That would explain why a decent PM company is hard for you to find. I know when I was looking, there was a cute condo for sale in a place that only had about two dozen units. The unit I liked sold before I got to make an offer. Maybe I dodged a bullet.
The problem with this, is that the property management companies are in a very good position to rip off HOAs. Not saying they all will, but if you look at their position, it's easy for them to be able to really run the show and hand out sweetheart deals to their associates in, say, the pool maintenance business or driveway pavers or landscaping - you name it.
Because most of the board members are only qualified to help run a HOA, simply because the only requirement is that they be an owner. They do not have to have any knowledge of real estate or property management or fiscal management or maintenance, or landscaping, etc.
So, what I saw happen when I got on the board at my HOA, was that the board members, most of whom have no idea what they're doing and only got on the board because of some pet peeve or agenda, like wanting to get rid of the cat lady or to get people to stop growing tomatoes on their balconies or to penalize people who don't pick up their dog's poop --- is that they pretty much just end up doing whatever the manager tells them to do.
And the manager will bring to the board meetings suggestions, like the pool needs maintenance or the driveways need to be repaved, etc., etc., and they will have someone they know who can get the job done.
The year I was on my board, the pool needed an insane amount of maintenance, to the point where I started saying, what the heck? And the other board members didn't want to deal with any kind of potential problem, so just voted to do whatever the manager suggested.
I felt sure the manager was either financially involved in these maintenance businesses or was getting some kind of kickback.
.
I don't get this. Why on earth would the board let the property manager come up with the company to do maintenance or landscaping or whatever? YES, that's opening the door for an unscrupulous PM to do exactly what you said--but then that's the board's fault for letting it happen.
We get at least three bids for everything. Landscaper/snow removal company, insurance, seal-coating, tree pruning--and the Property Management company itself, the last being an request for proposal (RFP) and not a bid. For those who don't know the difference, in a bid everyone gives a price on the exact same scope of work. In an RFP, you say we want PM services--tell us what you will provide and how much it will cost us. That way you can go with someone who is a little higher, but gives you extra services that the other companies don't.
And of course, you do a reference check, RIGHT?
It's a risk. Last time we went with a new company to seal coat the parking lots and paint the space numbers because they were a lower price than the one we had used before, and they sucked. They sent a schedule out of what days they would do which courts, and then their workers didn't follow the schedule so people had their cars still in the lots when they showed up to work. They had to come back and redo an area that wasn't done right, and they actually CREATED a big pothole in one of the parking lots and it took a month to get them to come back and fix it. We won't ask them to bid next time.
Not sure where you are but snow removal expense is the big one for condos in the north. We pay about 10K per year for snow removal. There can also be expense for ice dams and removing snow off roofs. Knock on wood but this year it looks like we might luck out and get some money saved.
We're in Park City UT -- a ski resort town. Last year I measured 400 inches of snowfall on my driveway (thankfully not all at once!).
The HOA I referred to does not do any snow removal. Plowing the streets is handled by the country, and everyone is on their own for their own driveways & walkways. There are no sidewalks in the community.
Yes, just like the many other people who have gotten on the board in the past and ruined things. Why are you so sure that the condo isn't over maintained?
I just found out in addition to a trustee paying for someone to get their condo fixed after it was in a non conforming condition... he locked us into a 3 year contract that isn't clear as to what they will do and doesn't save us money. But it was easier for the lazy trustee to do. And frankly, I am starting to wonder if this guy isn't getting a kick back.
One bad trustee can really mess things up.
Who are you calling a trustee? A fellow board member?
If so, that was wrong. all board members should have voted on it, but that doesn't mean it's ok for you on your own to get a report (reserve study?) (inspection?) and then hide the results if you don't like them.
I don't get this. Why on earth would the board let the property manager come up with the company to do maintenance or landscaping or whatever? YES, that's opening the door for an unscrupulous PM to do exactly what you said--but then that's the board's fault for letting it happen.
We get at least three bids for everything. Landscaper/snow removal company, insurance, seal-coating, tree pruning--and the Property Management company itself, the last being an request for proposal (RFP) and not a bid. For those who don't know the difference, in a bid everyone gives a price on the exact same scope of work. In an RFP, you say we want PM services--tell us what you will provide and how much it will cost us. That way you can go with someone who is a little higher, but gives you extra services that the other companies don't.
And of course, you do a reference check, RIGHT?
It's a risk. Last time we went with a new company to seal coat the parking lots and paint the space numbers because they were a lower price than the one we had used before, and they sucked. They sent a schedule out of what days they would do which courts, and then their workers didn't follow the schedule so people had their cars still in the lots when they showed up to work. They had to come back and redo an area that wasn't done right, and they actually CREATED a big pothole in one of the parking lots and it took a month to get them to come back and fix it. We won't ask them to bid next time.
Yes all of our boards have made all of those decisions. Board Members are supposed to be or become competent in such. Ideally when there is turn-over one doesn't end up with a board like OP's - where no one knows how to do anything as it should be.
I will ask again. How often are your charged the condo fee? Who sends the bills out? Who receives and deposits them? Who gets the monthly report of disbursements and receipts?
But if told you that how could I maintain the mystery? Condo fee is monthly. Condo management company does it.
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Based upon your description of the board, a reserve study would just be a license to spend, which is sounds like you are against.
It is a risk but it also could be a mandate to stop spending. And for instance, if they came out and said our roofs don't need replacement for 8 years we should save money as we are planning on doing them now in 4 years.
I think any audit would be fruitless. They would simply claim all they have is what they got from the last management company and if I have questions I should talk to them. If I talked to them they would say.. we gave the other company all we had.
I don't know where these people are that can get three quotes... and oh btw the quotes come from the management company. Every single time we ask for quotes we have a hard time getting them. No only because the condo is small and not worth it to them, but they are simply slow and unprofessional with the quotes... lacking specifics or never getting them to us. I do suspect the PM puts some of them into the circular file but how do you prove that?
The last time we looked for a PM company we called the references for several companies that were glowing but we had numerous bad reviews on line and we asked other condos they weren't putting up as references and it was NOT good.
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Plowing the streets is handled by the country, and everyone is on their own for their own driveways & walkways
Boy that would save us a TON of money. But I think everyone would move. That is the big draw of a condo around here.
But if told you that how could I maintain the mystery? Condo fee is monthly. Condo management company does it.
It is a risk but it also could be a mandate to stop spending. And for instance, if they came out and said our roofs don't need replacement for 8 years we should save money as we are planning on doing them now in 4 years.
I think any audit would be fruitless. They would simply claim all they have is what they got from the last management company and if I have questions I should talk to them. If I talked to them they would say.. we gave the other company all we had.
I don't know where these people are that can get three quotes... and oh btw the quotes come from the management company. Every single time we ask for quotes we have a hard time getting them. No only because the condo is small and not worth it to them, but they are simply slow and unprofessional with the quotes... lacking specifics or never getting them to us. I do suspect the PM puts some of them into the circular file but how do you prove that?
The last time we looked for a PM company we called the references for several companies that were glowing but we had numerous bad reviews on line and we asked other condos they weren't putting up as references and it was NOT good.
Boy that would save us a TON of money. But I think everyone would move. That is the big draw of a condo around here.
I apologize, I thought I understood that you did not have a management company. An audit and a reserve study I believe would be an excellent investment in your case. It would be up to the auditors to ask the entire board to fill in the blanks if there were any it would be a start in getting your condo in good financial condition.
Regarding the management company getting quotes. YourMgmt. Company puts out an RFP that states the scope of the work to be done and then the board makes the decision, not the management company. The board should write the scope of the job, that way you are limiting how you are serviced. For example, our HOA has a cleaning company that cleans the bathrooms and clubhouse. When we put the RFP out, we stated the number of times per week the garbage needed to be emptied and toilets and sinks cleaned, how often the windows were washed and carpets vacuumed etc. A boilerplate contract had things missing and things we did not feel necessary, so we were able to not only control costs but also it enabled us to only pay for what we wanted. In some cases the mgmt company had suggestion in others we did a combination of companies known to them and suggestions from the board.
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Condo fee is monthly. Condo management company does it. 
