Page 16 - New Jersey Cooperator January 2019

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 tony.nardone@cp-management.com 973.376.3925 www.cp-management.com Phone: 973-390-9062 E-mail: samantha@matrixpmgroup.com Website: MatrixPMGroup.com 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