By Robert Meisner
Picking a management company for a community or condominium association is one of the most important decisions that the board, in behalf of the membership, will make. Remember, the board still has a fiduciary duty to use good care and judgment in establishing effective management. Not all management companies are created equal and not all management companies can provide the service which the association desires or deserves.
As practicing attorneys for over thirty-five (35) years, concentrating in condominium and community association law, our firm has the insight and experience to assist your association in picking the right type of management company and the right form of management.
Often times, the board of directors of the association will be given a management company chosen by the developer during the time the developer is in control. Many times that management company will recommend contractors, accountants and attorneys to the association because of an affiliation between those service related persons and the management company. Many times, the management company will be a source of referral to the newly elected board of directors of the association for attorneys, accountants, contractors, and insurance consultants, among others. The association should maintain independence from the management company in the sense that it should choose its own personnel to assist it in the operation of the association. In making that choice, there should be no conflict of interest between the management company and the persons whom the management company recommends to the Association. The association should choose its attorney, accountant, insurance consultant, and contractors that do not have any direct affiliation or financial dependence on with the management company.
Our firm can assist the association in asking the proper questions to determine which management company is best suited to represent the interests of the association having had the background to make the proper inquiries as to the management company’s experience, expertise, and ability to serve the association. We can particulate either directly or indirectly in the interview process to help filter out hype from accuracy. Moreover, not all associations can best be served by professional management. Some associations choose to have their own in house management or self management and/or are large enough to have an administrator on their payroll to assist in the operation of their association.
The management contract is the most important contract that the association will sign. That should be reviewed by independent legal counsel, not beholden to the management company before it is signed. Not all management company contracts are the same and there are certain provisions which need to be negotiated, including indemnification and liability. We can assist your association insuring that not only do you pick the best management company available to serve your needs, but that the contract that is negotiated will serve the best interests of the association. The lesson of community associations which we have represented over the years is not to sign a management contract or pick a management company without first consulting with independent legal counsel that can best serve and protect your interests.