Q&A: When a Management Company Takes Over

Q. I am a unit owner in a condominium association containing 189 units. We manage ourselves and wouldn’t ever want to have a management company manage our property. However, the question has often  been asked as to what happens when a management company takes over. Obviously, the care and upkeep is taken care of by management. What happens to the association articles and bylaws? Does the management company have authority over those? Can it now change the monthly assessment fee without the consent of the association members? In other words, what are the legal ramifications?

                             —Self-Managed Resident

A.  “Management companies don’t ‘take over’ unless you let them,” says Chicago-based attorney Sima L. Kirsch of the Law Office of Sima L. Kirsch, P.C. “Regardless the type of professional services the board retains, it may never give up its supervisory and oversight role. The right to retain a management company derives from the declaration that also gives direction at times on what management may and may not do. Further, the relationship between board and management is a contractual one. The board decides what services are needed and negotiates the contract to meet those needs and set standards for the performance of managements functions.

 “If you want management to have the duty of keeping records and performing certain administrative functions pertaining to records, provide for it. A management company has no independent authority under any circumstance to change anything. All changes must either be made at a board meeting by vote of the board or member meeting by vote of the members where a member vote is required. Some boards sign agreements without seeking counsel, without realizing they can negotiate to change anything they want and the company will negotiate with you. There are hidden risks and traps in every service contract, especially when prepared by the service provider. Always have your service contracts reviewed by the board’s attorney. Bottom line: anything management does is at your direction.

 “None of this information may be taken as legal advice and you should consult an attorney working in the field who can help you assess your particular factual situation.”

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