Bids
The management company told the president of the hoa that it is not a good idea to get bids on projects but instead give it all to their landscape company that way our subdivision will become a priority. Does this seem shady or is this just me?
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Kathy,
It sounds shady to me as well. Many times, management companies form alliances with preferred vendors for many reasons including the possibilities of kickbacks. Other times the management companies use vendors that pay to join the Arizona Association of community managers as a trade organization to support the legislative interest of the community managers. Joining that coalition and paying for membership gets the company used as a preferred contractors in all the communities run by any community manager also in that coalition.
The decision is the board’s and not the community manager so the board should act accordingly and do their due diligence to evaluate the best option for the contracted support of the community. Because a management company recommends a certain vendor should never play in that decision making. The management company has no fiduciary obligation to the community only the board has that.
Not getting bids on significant financial projects is a breach of fiduciary duty of the board to the members of the association. Existing case law has confirmed that reality.
Dennis