Page 16 - New Jersey Cooperator January 2019
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16 THE NEW JERSEY COOPERATOR   —JANUARY 2019  NJCOOPERATOR.COM  We specialize in:  •   Condominium/Townhouse Associations  •   Single Family HOA/Master Planned  •   Luxury High Rise Condominiums  •   Cooperative Communities  •   Adult Active Communities  11 Cleveland Place • Springfield NJ 07081  973.376.3925  Phone:  973-390-9062  E-mail:  Website:  sential in establishing the relationship be-  tween management and association. It can   outline the terms of the manager’s perfor-  mance, establish a board’s expectations,   and give both parties an out should the   t   prove to be poor.   “Generally, whether an association has   the right to terminate a contract without   penalty depends upon the language of the   contract itself, and/or perhaps the terms of   the declaration,” says Dawn Moody, Prin-  cipal at law   rm  Keough & Moody, which   has o   ces in  Chicago and Naperville, Il-  linois. “I believe that a management con-  tract is one of the most important contracts   entered into by an association. Because of   this, that contract should be reviewed by   the association’s legal counsel to ensure   that its rights are protected and that it does   not enter into a contract which exceeds its   authority. By way of example, if the asso-  ciation’s declaration limits the length of a   management contract, the board does not   have the legal authority to enter into a con-  tract for a longer period of time.”  Almost any management contract will   allow for the managing agent’s services to   be terminated for cause, notes Wurtzel.   “   e better documented the problems are,   the easier it is to prove cause,” he says. “Be-  ing able to show that numerous letters ad-  dressing a particular issue were ignored by   management helps as well. Of course, the   scope of the agent’s services are limited by   the terms of the contract. If the contract   does not require the manager to solicit bids,   you cannot terminate them, or be unhappy   with them because they failed to do so.   “And, when signing the contract,”   Wurtzel  continues, “make sure  expecta-  tions and obligations are spelled out there-  in. If the agent tells you in its sales pitch that   you will get monthly reports by the 15th of   each month, put that in the contract. If it’s   important for the agent to visit the prop-  erty at least once per week, put that in the   contract.    is way, the failure of them to do   so  becomes  a clear  violation allowing for   termination if and when it does not occur.”  “   e initial review of the contract is vi-  tal, as it will allow the parties to fully under-  stand their rights if or when the relationship   between the association and management   sours and cannot be salvaged,” adds Kreibi-  ch. “All too o  en, the board does not ad-  dress this issue in advance, because, during   the honeymoon stage with a prospective   new manager, there are no signs as to what   might go wrong. But once the contract is   signed, it’s too late.    erefore, a close re-  view of the termination provision is para-  mount to properly protect the association   in case something goes wrong.    rough its   legal counsel, the board should be sure that   any penalty provision be removed and ad-  dressed. Ideally, the board should be able   to freely terminate an agreement if they   are unhappy with the services rendered   without penalty.    at said, the goal should   always be to avoid the need to terminate   management by maintaining an ongoing   and regular policy of communication.”     ■  Mike Odenthal is a sta   writer at    e New   Jersey Cooperator.   ADDRESSING...  continued from page 6  different perspectives, but ultimately   they all care about the property values,   their neighbors, and the well-being of the   community.”  Of course, renters are entirely capable   of making viable contributions to the   community themselves, as Mary Breed-  love,  Manager  of  the  Augusta  Village   Homeowners Association in Plainfield,   Illinois, observes. “We had a renter in a   community who wanted to get involved,   and  was  appointed  to  the  board  –  not   elected, as we did not reach quorum to   run an election meeting,” she recalls. “He   was a great asset because his comments   and decisions were not emotionally trig-  gered, but business based. After a couple   of meetings, due to his methodical ap-  proach, the rest of the board became   more likely to put their emotions aside   and operate the association like a fine-  tuned machine.”  Further Inspection  Occasionally, a non-resident steps up   to join the board based purely on neces-  sity.  “In today’s age and time, we can’t get   homeowners to complete their proxies   to even hold an annual election meeting,   much less run for the board,” laments   Breedlove.  And Schneider notes that, in instances   where there are ample volunteers to serve   on the board, non-residents are likely not   going to express interest. “The problems   occur on a case-by-case basis more than   they do conceptually” when it comes to   non-resident  board  members,  he says.   “In instances where there are problems,   the  bad  actor normally  just  gets  voted   out. And the community is going to be   aware that someone doesn’t reside in the   building, so they will take that into con-  sideration when voting.”  Occasionally the conflict boils down   to perception, notes Gary M. Daddario,   a law partner at Marcus, Errico, Emmer   & Brooks P.C., which has offices in Mas-  sachusetts and New Hampshire. “Some-  times, when non-residents are  elected   to a board, there is real split interest,” he   says. “Other times, it is something that   the community perceives to be a split   interest. But in general, it just seems to   be human nature that people will treat   something they perceive as a home dif-  ferently than they treat an investment.”  Regardless, non-residents are certain-  ly eligible to run for the board, unless the   NON-RESIDENT...  continued from page 11

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