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Conflict of interest with property manager at community association

Posted on Fri, Dec 11, 2009 @ 06:37 AM
  
  
  
  

I have a concern about a conflict of interest with the hiring of vendors. We have a property manager that was hired without any prior experience. There have been several vendors hired without multiple bids at the suggestion of the property manager. Even the financial auditor was suggested by property manager which is a concern to me. Our current property manager is making strong recommendations for several of our vendors based on personal opinion rather than experience.

Can anyone address the issue involved with a conflict of interest represented by the property manager? What are some signs to watch out for if the property manager is not promoting the interests of the community association but rather the interests of the vendors or their own organization?

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COMMENTS

We have a similar situation that the "new property manager" put all "his" people in place including attorney that he plays golf with. One of "his people" is the uncle of one of his employees that handles out acct. Tell him you want multiple bids but you may not get them as is in our case. He goes ahead and hires the people without board approval. Watch for "red flags" and go on your intuition. Good luck.

posted @ Friday, December 11, 2009 7:27 AM by Janet Weber


I think you misunderstand what conflict of interest is. Let me give a quick overview by example. 
 
If the manager was related or had an interest in the bidding party and did not disclose that to the board, that would be a conflict of interest. For example, let's say his brother in law owned the lawn company. If he disclosed that and treated his brother-in-law like any potential bidder, it is not a conflict of interest. Lets say that he was part owner of his brother-in-law's company and did not disclose that fact. That would be a very real conflict of interest, as he is supposed to represent the association. He would not be able to do both. 
 
There is no legal requirement to obtain bids and it is up to your board to determine if bids are needed or not. They must operate using their best judgment and best business practice.  
 
When I go into new communities, I also don't try to remove vendors and try to get in "my guys". As managers, we all have vendors we recommend because we trust and know those vendors, and this manager may have experience with these vendors. You can definitely ask what his qualifications are. Maybe he worked as an apartment manager, building manager or hotel manager. All of those are similar enough in experience. My goal when going into a new community is to see what the board wants and to build and strengthen the relationships that they have. This also helps to deepen my pool of contractors for my clients, because often I meet at least a couple of vendors I don't know. 
 
As a manager, I recommend obtaining competitive bids on a regular basis, but not every year. If a community is happy with the service and considers the price fair, then there is no reason to bid it. If you need to know if the price is fair, then it should be bid. 
 
That being said, some boards and managers will make changes even when things are good. I believe this is to show that they are "doing something". In my opinion, change should only happen because of cost or dissatisfaction with service. 
 
Managers will promote the good of the community because if we don't, we don't have a happy client. When the client is unhappy, they will make a change. The change usually starts with the management agent.

posted @ Friday, December 11, 2009 9:50 AM by Joe Schuirmann


What would you say to a large condominium association contracting with 1 company for grounds keeping, snow removal, also contracted for overseeing maintenance budget and all maintenance actions, oh and, now is, with no experience, contracted to be the property manager?

posted @ Friday, January 14, 2011 9:47 PM by S Barns


After association voting 1 year ago and passing on a privacy wall to be put back that had been on a deck decades before, a disgruntled voter doesnt like staring at a wall. Ass even declared $500 to beautify it, if not liked by something all would enjoy. The wall had been remnoved due to rotting and danger before she bought. That being said, photos have even been shown her showing wall was there. 
 
Any suggestions she is emailing 5-10 times a day to all. Association president told her it is a done vote. She will not let it go.

posted @ Tuesday, May 24, 2011 1:27 AM by Lorna


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