HOA & Property Mgmt Conflict of Interest

4 Replies

What reservations, if any, would you have if a property management company is the service provider for an HOA & in the HOA CC&R's the same prop mgmt company has exclusive rights to leasing a community of Multifamily properties?

Meaning if I owned a $1M 6-plex, I have NO flexibility to manage it myself or hire another company if they drop the ball one too many times. The HOA says that I must use the assigned property mgmt company.

To paint the picture more clearly, the Prop Mgmt company could just decide to increase the monthly HOA fee from $160/mo to $200/mo. They could also decide instead of 8%/mo to manage the rentals, they want to charge 10%/mo. If the other Owners aren't engaged or involved in the HOA meetings (which most people choose not to be) this one company can have a field day. Someone talk me off of the ledge.

Thoughts, feedback? Would you buy a property in the community?

@Jasmine Bailey I don't like the concept. But generally a management company cannot increase HOA fees. Budgets are set by the Board of Directors and sometimes the governing docs require a vote of the property owners too. Read your docs and get familiar with how much power the company will have.

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