Reining in HOA management company's inappropriate self-promotion

Management company's self-promotion could be a liability for HOA

Question: For our association's "official" Notice for Annual Meetings, including elections, the management company uses its own letterhead to send out information. The letterhead states things like "serving California since 1980s" in extremely large print to the right of the company name. There's a huge company logo on top of all that, taking up even more valuable space — over a quarter of the top page.

At the bottom left and right, management advertises industry trade group affiliations using other industry logos with its own address placed on top of all that, taking up another quarter page. The name of our homeowner association is in the tiniest print with no contact information; we are incidental to management's bragging about who they are and industry affiliation logos.

Regular board communications are worse. The letter closings take up at least four lines disclaiming that the manager is writing "For the Board of Directors at Homeowner Association, blah, blah, blah" but by the time the manager signs her name with meaningless alphabet soup designations consisting of capital letters spanning two lines, her title on another two lines, then her signature swallowing up at least eight more lines, there's no room for association business to be adequately communicated.

We end up wasting a lot of space, paper, postage, with increased printing costs because of management's solicitations and advertising on our dime. We don't want the management company to advertise at our expense. We want to use our own stationery. Should management stop using its letterhead in communicating with association owners and vendors?

Answer: Yes, inform the management company, one of your vendors, how to conduct business and how to represent your association to third parties, including owners. Absent some contractual provision to the contrary, management takes its instruction from the board and homeowners. If you have a specific method or form of communication the board wants to use, require the same from all vendors.

Management vendors are supposed to be service providers, not board directors. Management's letterhead and stationery should not be transformed into a free solicitation billboard for the company at association expense.

The board should require use of the association's own letterhead for all board and association communications. Management should not convey more information about itself than your association in any communication, as doing so may detract from association business.

The board is responsible for efficiently and effectively managing the association and its resources; saving some ink or a few pieces of paper per communication may seem trivial, but those costs add up.

There is also the potential for liability from a false implication of a connection between the companies advertised by management and the association.

The additional logos and references may reasonably lead readers of the correspondence, members and third parties to believe that the association is endorsing these companies and trade groups or that they are otherwise affiliated with the association. Additionally, the fact that the board has hired this management company to perform some services does not in and of itself mean that the association endorses it and/or its services.

Boards should also be very careful when executing contracts with such companies so that the association's name is not reproduced or represented in this company's solicitation of services to other boards of directors with whom the company wishes to do business. The false impression of your association's endorsement of this management company is a huge problem.

Zachary Levine, partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com.

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