Too often the unsuspecting or inexperienced property manager falls into the most common trap of attempting to satisfy a controlling faction of the board of directors or the president and ultimately ends up loosing the contract.

Probably the most common example is the property manager becomes openly friendly with the board president or a group of board members who control the board of directors. This may work well for a period of time, but after a while, the control shifts to new members of the board who are opposed to the previous group's policies and practices. Of course the inevitable occurs and the first thing to go is the management company and the attending property manager.

Then there is the case where the property manager advises the Developer, who controlls a majority of the board of directors, that they must pay their dues each month, as required by the governing documents. The property manager attempting to do his legal duty and collect the dues, persists in demanding the dues be paid and threaten liening all the developer's unsold units. And, again the inevitable occurs, and the developer terminates the management company and takes on the management themselves.

Another situation is where a homeowner is appointed as Chairman of the Finance Committee who gains control of the Board of Directors by obtaining proxies and thereby "stacking" the Board of Directors with his friends.

As Finance Committee Chairman with a puppet Board of Directors, he then proceeds to coerce the management company, auditors, and of course the on site employees into conforming to his way of "doing things," which may not be ethically or even legally correct.

Indifference by the Board of Directors allowed this situation to prevail for several years until one new Board member recognized the precarious position the Board was in. The Finance Chairman had no real liability, since he was not on the Board. The Homeowners tried unsuccessfully to gain control of the Board of Directors several times, but this individual had convinced a block of voters to assign their proxies to him, and with cumulative voting he could keep a majority of the Board under his control.

The new Board President finally was ultimately able to gain control of the Board of Directors and begin to run the Association in a Democratic way, but not without a fight from the now ex-Finance Chairman who attempted to discredit the management firm and various members of the Board of Directors. It is imperative that the management company remain neutral and not take sides on any issue or with any group.

And finally there is the case of the board president who totally controls the board of directors because the president does all the work and the other board members do not care to be bothered. The president is advised by the property manager that the president must place the budgeted monies into the reserves. The president refuses and begins spending the reserve funds on unbudgeted items and improvements adjacent to his/her unit. The property manager then brings pressure on the president and the president retaliates by firing the management company and property manager.

The advice on all of these cases and most any case is that the property manager has a duty to advise the board of their fiduciary responsibilities and to do so in writing. By doing this the property manager has met his/her contractual duty. The property manager should never take sides on any issue or with any groups but merely present the duties of the board. If a decision cannot be agreed upon, then seek the advice of an attorney, architect, engineer or an expert in the field of discussion. By obtaining outside professional help, and in most cases you will keep your contract and fullfill your contractual obligation.