How can you break management’s hold on board?

Question: We are a common-interest development with less than 38 units. From our nearly $425 monthly fees per unit, management takes nearly $100. The company also charges so-called incidental fees that only show up on association documents in small increments throughout various invoices billed to the association.

Those small increments mask the actual charges from owners trying to discern where the money went and for what.

When these incidental charges are factored into what our association is paying this company, it makes their management-employment unfeasible. Management has weaseled its way into board meetings and ensured a permanent place in our board election process.

Our board is so entrenched with this management company that it can no longer act in the best interests of our owners and the association. How can owners get rid of this management company when we are unable to get elected to the board? How do owners get answers for incidental charges when the company keeps bulldozing our requests?

Answer: There are more owners than board directors. Entrenched or not, if enough of the 38 owners are dissatisfied, a new board — or at least enough to change the voting majority — can be elected and terminate the management company contract.

Management employees, like any other vendor, do not belong at association board meetings. Although they may be invited to attend, they should not be taking minutes or offering suggestions on the conduct or content of the meetings. Such meetings are where directors conduct the association’s business in the open and where individual titleholders observe board actions and spending decisions.

Much of the work of the management company — including the hiring of competent third-party vendors — can be accomplished by dedicated titleholders who take the job of self-management seriously. Even if no one volunteers to collect and account for association funds, hiring a reputable, licensed, accountant for that sole purpose saves your association money and costs less than the $3,800 per month in base management fees your association is currently spending.

Owners get answers to financial questions by closely examining association documents. Building your case against the management company and the board’s incompetence begins with copies of association payables (Civil Code section 1365.2). Once received, segregate items by labeling the various expenditure categories, then make an entirely separate demand for specific breakdowns of the incidentals noted throughout those payables.

In an additional letter based on the same code section, request a copy of the management company contract. Once received, read what your association has committed to and what the company is allowed to bill. Match that to what was actually billed.

Once questionable or suspicious items have been uncovered, you will be in a better position to decide how to move forward. Share your findings with all the titleholders so they are kept informed.

Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.