Q & A: Switching Managers Q & A: Swiching Managers

Only two trustees are left on our board. Everybody else resigned. I am one of the trustees remaining on the board but as the longest-serving trustee, I wish to terminate the contract of the manager and the management company. We are not allowed to appoint any board members to fill the vacancies on the board; our bylaws say that we need 51 percent of the unit owners to vote on appointments. The bylaws allow that there should be five board members and no less than three. It’s tough getting people to serve. Am I allowed to act unilaterally on this issue to select a new management company?

—New Blood

A “If three [members] of the five-member board have resigned, there usually is a mechanism in the documents to fill those positions for the remaining terms of each position,” says Mark Einhorn, a junior partner with the law firm of Marcus, Errico, Emmer & Brooks, P.C. in Braintree, MA. “Some documents allow the remaining board members to make appointments but it sounds like from the question that these particular documents do not. If there is no right of appointment, the vacancies should be filled by a vote of the unit owners and a special meeting for that purpose should be called. Likewise, generally the number of positions on the board is set by a vote of the owners, and if the board was set at five members, those positions should be filled if possible. At the very least, an election should be held so that the board is an odd number—otherwise the board may find itself deadlocked on issues.

“Most documents contain a provision which allows remaining board members to act even if there is only one board member. However, as most documents provide that the board may only act by majority, to act in this case (and any other actions) would require that both board members agree on the matter. One board member could not, and should not, act unilaterally, and seniority on the board is irrelevant for voting purposes. So, unless your fellow board member is in agreement on changing property managers, that decision should not be made.

“As an additional note, I want to offer some general advice regarding management of the association. Sometimes there is an expectation that switching property managers will bring new blood into the property and wipe the slate clean—so to speak. And, sometimes making that managerial switch is what is needed.

“But, too often it seems that switching property managers, while seen as the answer, really does not address whatever fundamental problems the board, the association, and former management were grappling with. In those cases, it is very likely that the same problems and issues will rear their ugly head in the near future—as soon as the ‘honeymoon period’ with new management is over. For that reason it may be best to keep the current relationship with management and work to figure out how to solve the underlying problems before moving on, especially since transitioning to a new company often takes time and resources, and tends not to be such an easy task to accomplish, even with the best of circumstances.

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Comments

  • Management is not providing necessary information regarding our finances, among other inproprities in accordance with our Documents and Laws of the State. What can be done?