Questionable Condo Management

[wisdom71]

What is the name of your state? NJ

In March, I bought a condo in a 47 unit building with approximately 40% owner occupants. Two months ago the tenant-owned apts were sold to one person. Last month we selected a new Board (I am a new board member) and of course the majority owner voted himself and two people who do not own or live in the building on to the 5-board member panel--giving him board majority. I should also add that this new owner and his people all used to work for the company who manages the building--they left just before his big purchase. According to the management company's attorney, we are to select a new management company, however it appears that the majority owner has made his own company the new management company.

Our management company only deals with the majority owner, but there seems to be some bad blood there. Yesterday the majority owner's secretary told me the management company will not give up management duties for the building and this has forced the majority owner to get an attorney. I don't know whether he is using personal funds to do this or whether he is making decisions on behalf of the building that would cost the rest of us later. What can we do to get visibility into our finances, expenditures, contracts etc.What is the name of your state?

[Avalon]

Some questions for you: So it sounds like one guy now owns 28 or so units, and the rest of the units are owned individually? So for every vote of the membership, he'd have 28 votes v. the other owners' one each. Do the condo docs permit Board members who do not own or have interest in a unit? In any event, it sounds as if three of the five Board members are on this guy's side.

Isn't there a contract with the existing management co.? If so, I would think that contract would have to be honored regardless of whether some of the employees quit, and I don't see how the majority owner can suddenly take over property management responsibilities.,

Who is the Treasurer? That person should be sharing financial statements with the Board so you know exactly where the money is going. No expenses should be incurred without knowledge and approval of the Board.

Unfortunately, it sounds like this guy is in the driver's seat because of his majority ownership. He's got the majority on the Board, and in the voting membership of the Association. Doesn't mean you and the other Board member should not hold him accountable, this is your money too.

[wisdom71]

The condo docs do not explicitly indicate that the members must be owners...there is only mention that the owning majority must vote them in.

No one is willing to proide a copy of the contract--I've asked the management company and their lawyer. They give you the run around on the phone or they hang up on you. Emails are ignored.

The last board was a passive inactive group--they clearly left everything up to the management company and never requested visibility in any way. The older owners have no idea where the money has been spent over the years, how much money is in reserve, etc. My next door neighbor was one of the old board members (he happens to be the only one still in the building) and he tells me they met only once over a three-year period which was about three years ago.

I'm new to the building and I definitely don't want to fall into the same comfortable mode. I was able to 'campaign' to get elected to the board and I've already started organizing the owners in a way, but I'm hoping there is some recourse we can take to make the management company provide requested documents and 'show us the money'.

Any advice, questions, comments are welcome.

Originally Posted by Avalon

Some questions for you: So it sounds like one guy now owns 28 or so units, and the rest of the units are owned individually? So for every vote of the membership, he'd have 28 votes v. the other owners' one each. Do the condo docs permit Board members who do not own or have interest in a unit? In any event, it sounds as if three of the five Board members are on this guy's side.

Isn't there a contract with the existing management co.? If so, I would think that contract would have to be honored regardless of whether some of the employees quit, and I don't see how the majority owner can suddenly take over property management responsibilities.,

Who is the Treasurer? That person should be sharing financial statements with the Board so you know exactly where the money is going. No expenses should be incurred without knowledge and approval of the Board.

Unfortunately, it sounds like this guy is in the driver's seat because of his majority ownership. He's got the majority on the Board, and in the voting membership of the Association. Doesn't mean you and the other Board member should not hold him accountable, this is your money too.

[wisdom71]

The condo docs do not explicitly indicate that the members must be owners...there is only mention that the owning majority must vote them in.
No one is willing to proide a copy of the contract--I've asked the management company and their lawyer. They give you the run around on the phone or they hang up on you. Emails are ignored.

The last board was a passive inactive group--they clearly left everything up to the management company and never requested visibility in any way. The older owners have no idea where the money has been spent over the years, how much money is in reserve, etc. My next door neighbor was one of the old board members (he happens to be the only one still in the building) and he tells me they met only once over a three-year period which was about three years ago.

I'm new to the building and I definitely don't want to fall into the same comfortable mode. I was able to 'campaign' to get elected to the board and I've already started organizing the owners in a way, but I'm hoping there is some recourse we can take to make the management company provide requested documents and 'show us the money'.

Any advice, questions, comments are welcome.

Originally Posted by Avalon

Some questions for you: So it sounds like one guy now owns 28 or so units, and the rest of the units are owned individually? So for every vote of the membership, he'd have 28 votes v. the other owners' one each. Do the condo docs permit Board members who do not own or have interest in a unit? In any event, it sounds as if three of the five Board members are on this guy's side.

Isn't there a contract with the existing management co.? If so, I would think that contract would have to be honored regardless of whether some of the employees quit, and I don't see how the majority owner can suddenly take over property management responsibilities.,

Who is the Treasurer? That person should be sharing financial statements with the Board so you know exactly where the money is going. No expenses should be incurred without knowledge and approval of the Board.

Unfortunately, it sounds like this guy is in the driver's seat because of his majority ownership. He's got the majority on the Board, and in the voting membership of the Association. Doesn't mean you and the other Board member should not hold him accountable, this is your money too.

[Avalon]

Wow, you've got an uphill battle to try to whip this Board into shape. Is the other Board member strong enough to support you? In any event, the condo docs should stipulate how often the Board meetings are held, and that should be your first battle. The condo docs should also specify the financial statements that must be provided to the ownership and when. Sounds like that's not being done either. The condo docs should also allow review of the financial records by any owner, and the Association must comply within a certain number of days. Check that angle. The NJ Condominium Act requires that Board meetings are open to owners and that the owners are provided the minutes. Between your condo docs and the law, it sounds like you (and any other owners you can galvanize) can start holding their feet to the fire. Make sure the other owners realize this affects their pockets so they'll stop being so complacent with this group. Tell them to start attending the Board meetings and speaking up!

[wisdom71]

The other board member is very strong and diligent about digging up as much information as he can, but at the end of the day, if the management company does not respond to our requests can we withold our monthly maintenance fees? I mean what are our options if they ignore requests or aren't doing their job? Can we just fire them and select another company?

[Avalon]

It all depends on what's in the contract. I'm not a lawyer but just advising you as a fellow condo owner and Board member in NJ. This case sounds very confusing, but can you do this: Call an emergency meeting of the Board to discuss this property management situation. If the majority owner used to work for the place, he should have the contract or know what's in it. Demand to see the contract. That will tell you what the Association's rights are. Is the Association still paying management fees? If so, to the old management co. or this new owner's 'company'? You have the right to see the financial records, as a Board member as well as an owner, and to see where the money is going. The whole thing sounds shady and you guys are caught in the middle. If you haven't done so already, read your condo docs thoroughly so you know exactly how the Association and Board are supposed to operate, and insist the docs are followed. Just because this guy owns a majority of the units doesn't mean he can do whatever he wants. Challenge him all the way and get the other owners involved, it's their money too.

As far as stopping the payments for the management company, I wasn't sure whether you meant you personally were going to stop paying your condo fees, or the Association would stop paying the management company.