Maybe It’s Time to Remodel the Board
QUESTION: The board of directors of our condominium association has hired the board president to remodel the lobby. The project includes replacing the lobby mailboxes, new tile, paint and wallpaper. The board did obtain three bids and the president’s bid was the lowest, so he was selected for the work.
Then the president immediately said that the painting of the hallways would cost $14,000 instead of $7,000 because his original bid was based on one coat of paint and one coat was not going to be acceptable.
I believe there is conflict of interest here, but the board president is intimidating, and it looks like everyone is going to just let him clean out our funds.
Now he is wanting to put new carpet in the hallways and the fire stairways. The building is 20 years old, and the fire escapes have never been carpeted.
We need your advice.
ANSWER: I hope you are not the only person who thinks it is time to hit the brakes on this project. I realize there are at least two sides to every association issue, but this sounds suspicious to me.
It is likely that your concerns are already making you the unpopular “troublemaker,” but you just may be the only person who has the fortitude to ask the right questions. I would have lots of questions if I were you.
During my many years in the condominium management business, I have seen far too many remodeling projects like yours and that is why I believe it is almost always a mistake to contract with a board member. Perhaps the board president isn’t even a contractor. Your letter doesn’t state whether he has the business background or qualifications to handle this type of project.
It is clear to me that your association’s problems started even before the bidding process. First, the board should have looked at its reserve funds and decided how much it was going to renovate and about how much money it was willing to spend.
The next step is getting some professional advice on the scope of the work, costs, specifications, contract terms, qualifications of the bidders and several other matters. Advice from your accountant, reserve study professional and attorney should have been sought right from the beginning.
If your president is such an expert, why weren’t thorough specifications written that included all of the work that the association board authorized?
The fact that the painting cost doubled should have been a huge red flag for the rest of the board members. They then had the responsibility to go back to the original bidders to bid the project based upon the revised specifications (two coats of paint). The quality of the paint and lots of other factors are important too. If the paint is watered down, that explains why the walls need two coats, and that doubles the association’s labor costs.
It appears that the board president is not handling any of this in a professional manner. There are several reliable paint manufacturers that will send out knowledgeable people to write the specifications for you so that bids will be easy to compare.
If the board president is presenting himself as an expert, he shouldn’t mind answering questions and fully disclosing to the rest of the board members what an honest, qualified, experienced guy he is.
Again, the board needs to rely on professional advice. It should have interviewed several general contractors and decorators. Remember, if you are having these kinds of problems just with the painting, there is still a lot more at stake. Carpet in the fire escapes? Someone should check with the fire marshal before carpet is even considered.
The entire board can be held liable if this project goes awry, especially if it fails to make the board president participate in fair and competitive bidding.
The job description for board members does not say “be a friend to the president.” The board’s role is to protect the association. That means that it cannot just rubber-stamp everything that the president wants to do. The board should approve each step of the project, and thorough documentation should be written in the board meeting minutes. If any of the board members vote against the president and the manner that the project is being handled, they have the right to have their dissenting votes written in the minutes.
Bylaws Should Detail Replacement Procedure
Q: Our homeowner association is supposed to have a five-member board. Two of the directors resigned several months ago. The board members have not scheduled an election to fill the two vacancies. Can the members call a meeting and elect two new directors?
A: The association’s bylaws will state how board vacancies are to be filled. In most cases, the remaining board members have the authority to appoint new directors. The board should appoint new directors as soon as possible if qualified people are willing to serve. Perhaps the board has tried unsuccessfully to fill the vacancies.
The members do not have the authority to schedule an election even if the board does not appoint new directors. The members can petition for a special meeting to discuss the matter. The bylaws will state the method of petitioning the board for a special meeting or election. The board then has the obligation to act within the time period specified in the bylaws.
Hickenbottom is a community association management consultant and a founding director of the California Assn. of Community Managers. She selects questions of general interest for the column and regrets that she cannot respond to all queries. Send questions to: Condo Q&A;, Box 5068, Thousand Oaks, CA 91360.
