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February 23, 2007
Terminating the Manager - How Hard Can It Be?
Here is a common set of questions related to management that I get, either by telephone or email: "We terminated our management company. We just got sick of them not performing. They did not do anything over the past 6 months. We found a great new manager and we [either want to or have already] sign(ed) a contract. We called the old management company and asked to come over to get the records, and they won't give them to us. What do we do?"
Wow, there are so many potential issues here. In a nutshell, my questions and comments (and the responses) commonly go something like this:
Did you review the contract before terminating management? Is there a contract, even? I would need to review the termination provisions in order to advise you as to what is required to legally terminate the management agreement.
Common Answer: "I will look for it. I have never seen it. We don't have a copy of any contract - maybe the manager has it."
My response - ask for a copy of it - it is the Association's record. And ...
Do you have anything in writing you can provide to me - such as notices to management, responses from management, problems that occurred, attempts to cure, etc.? It will be pertinent, especially if the contract contains language providing that notices of problems and chances to cure must be given prior to termination.
Common Answer: "They know, we have been asking them for months. we get nothing ... "or I get this: "uhhh.hhh.hhh.hhh ... what do you mean?"
My response: I mean writings, a paper trail, anything.
How did you give the termination notice, by telephone, in writing? Can you provide me the letter?
Common response: "We need you to write a letter. We don't want anything else to do with our old manager."
I tell them I need to review all paperwork, and I need a chronology of what has happened, a list of complaints and when they arose, in writing, as closely as can be recalled if there is no writings, and any other information related to the situation, and sometimes I suggest a meeting with the Board, but that is not needed prior to review of the contract - that seems to me to be the most important first step.
What boards often miss is that there is a legal contract formed when management is hired. Most often it is in writing; however, it has often been so long since a board originally signed it, and so long since anyone reviewed it, that it has gathered a lot of dust - somewhere, yet to be determined.
Contracts can be simple, with simple written notice termination clauses; however, sometimes they contain clauses that allow associations to fire management only with cause, and cause sometimes provides the opportunity for management to redeem itself. Some require the Board to provide notice to the manager, and give the manager a certain amount of time to cure. Some have very difficult notice/rollover clauses that lock the Board in for months or a year or more if the Board is not on top of the timeline and notice required to stop the follover clause from kicking in.
I could say much the same about terminating management as said about terminating an employee in a concurrent blog. The contract is closely equivalent to the job description for a hiree - it should set forth the terms of "engagement", and cover the rights with regard to "redemption", vacation, sick leave, etc. It serves as the basis for determining whether both parties have performed as required. It should cover termination of the contract.
And as for evaluations - yes, they should be done on a regular basis. And reporting should be done in writing so there is a written record of the reviews. A manager may well assume that everything is all right unless you tell them it is not. A person, whether employee or vendor, deserves to know when the employer is not satisfied with the work. And it would also be enlightening and perhaps premptive of an unpleasant result if the Board were to survey the members now and then about their reactions to management. Like some diseases, a problem with a provider, vendor, staff or employee is much more susceptible to a cure if caught in the early stages.
Unfortunately, some boards feel so intimidated by their managers that they are afraid to say when they are dissatisfied. I commonly recommended to an association that they do at a minimum annual evaluations of management. I provided one association with a checklist evaluation sheet, and when the manager got wind of it, she was livid. I tried to explain to the manager that it is in management's best interest, as well as the association's, to have regular communication about performance. I was able to stand up for my principles with this manager, but its much harder for Boards to cope when this happens.
Posted by Beth Grimm at February 23, 2007 7:03 PM