unexpected change in property mgmt ownership (MA)

[DKatherine]

What is the name of your state? MA / Massachusetts

The short story:
What are the rights and responsibilities are of the property manager and a condo association in the case of a property management company changing hands. For instance, is the new management company bound by our contract with the old company for, e.g., requiring 30 days' notice before making changes to the contract? Or is that old contract effectively null and void?

The long story:
I am a unit owner in a small (under 50) condo building/association. I'm not currently on the Board of Trustees but have been in the past, so sometimes the current trustees look to me for advice or assistance (e.g., I'm a tenacious bean counter so last year I helped set up the 2006 budget).

We have had an excellent relationship with our property mgmt company and our specific property manager for at least 5 years. About three months ago we unit owners each received a letter from the mgmt company saying that, due to their evolving emphasis on property mgmt and the fact they spent so much time on the road, they were changing their phone number and making a slight change to the company name to actually use the term "property management" in their name. Their P.O. box address was remaining the same. The letter was not signed with any person's name, but there was no mention of a change in ownership.

Because we've had such a good relationship with our property manager, it never even crossed my mind that he had sold the company to someone else without explicitly telling us that, but I found out a month ago from one of the trustees (who was equally shocked, having just found out himself) that that is exactly what had happened.

Yesterday one of the trustees contacted me because the new property manager had just mailed him a new contract that he (the new property manager) wants signed within two days. The new contract just about doubles our monthly management fee. (To be honest, though, our old fee was remarkably low.) The trustee also told me that since the change in ownership we have not received any monthly financial statements although he did verify that at least our largest bank account is intact. He also said that the new property manager assured him that the bills are being paid, but of course with no financial statements we have no proof of that.

Just yesterday (concurrent with the trustees receiving the new contract) we unit owners each received a letter of apology from the new property manager, basically saying that the whole transfer of ownership had been a bigger animal than expected (hence the slowness of detailed communication) and that the orginal communication was intended to quickly inform us of the new phone number of the mgmt company. Yesterday's letter included the property manager's business card with name, phone number, and website, and reiterated that we should contact them with any questions.

The condo association has an attorney, but it was through the property management company (the "old" one, anyway!), so I suspect they will decline to get involved in this due to a conflict of interest. In the meantime, I am trying to help the trustees to sort out how to handle this matter by reviewing the proposed contract.

I've told the trustee who asked for my help that we should not, under any circumstances, sign the new contract (if, indeed, we don't dump this company and hire another) until we at least get the missing financial statements.

What I would like to find first is any on-line resource that will tell me what the rights and responsibilities are of the property manager and us in the case of the property management company changing hands. For instance, is the new management company bound by our contract with the old company for, e.g., requiring 30 days' notice before making changes to the contract? Or is that old contract effectively null and void?

I did fina Chapter 183A, Section 10 of the General Laws of Massachusetts, but that didn't really help me.

If you have any knowledge of such a resource, or have any other thoughts on how we should handle this situation, I would appreciate your comments. Quite frankly, my head is spinning and I'm concerned about missing something obvious. (Of course, after re-reading my post I think the "obvious" answer is to fire this new company, if in fact we actually have a contract with them that carried over from the old company!)

Thank you,
DKat

[IndianaOwner]

First, there are several ways a company can be sold. I would think that the company probaby bought the contract which includes the current obligations. So yes, they should be bound by the current contract.

Second, I assume checks must be signed by one of the trustees? If so, there should be little risk that the manaagement company was obsconding your money...the deposits may be another matter though.

[DKatherine]

Originally Posted by IndianaOwner

Second, I assume checks must be signed by one of the trustees?

Not unless they are over a certain (large) amount, which is not the case for 99.9% of our checks.

DKat