Hiring and firing management

The board hires the manager. Owners usually do not. That one fact explains most of the shouting at annual meetings. A management company works for the association under a contract the board signs. Unless your statute or your bylaws give members a ratification vote, a majority of directors can retain, replace, or fire the manager the same way they replace a landscaper.

That does not make the contract a blank check. Several states regulate who may hold association money, what a manager must disclose before you sign, and when you may walk away if the manager loses a license. Typical private-contract gotchas — auto-renewal, early-termination fees, "you pay us to copy your own records" — show up in the agreement even when no statute names them. Read the PDF. Do not rely on a sales deck.

Board vs owners

Corporate default: directors manage the corporation. The members elect directors; they do not run vendors. Florida section 720.303(1) says a member does not have authority to act for the association by virtue of being a member. Florida condominium law is even louder: a unit owner has no authority to act for the association by reason of being a unit owner, and the association may contract, sue, and be sued on condominium-property matters (section 718.111). Those sentences are why a petition to "fire the management company" is usually a request that the board terminate, not a self-executing owner vote.

Exceptions you actually have to look for:

• A bylaw that requires membership approval of contracts over a dollar amount or of management contracts specifically.
• A statute that lets members cancel a conflicted contract. Florida section 720.3033(2) is the clean example: if the association contracts with a director-interested entity, members may cancel at the next membership meeting by a majority of members present, and the association owes only the reasonable value of goods and services already provided — no termination fee.
• Developer-era contracts. Some condominium and planned-community acts let the post-turnover board terminate declarant-era management agreements. That is a chapter-specific right (for example, portions of the Uniform Common Interest Ownership Act family). Confirm the statute in your state; this page does not invent a national termination button.

If owners want a new manager, the practical path is elect a board that will issue an RFP, or petition an agenda item (Florida 720.303(2)(d) forces an item onto the agenda at 20 percent, but does not force the board to terminate).

California: disclose before you sign, separate the money

California Civil Code section 5375 requires a prospective managing agent to give the board a written statement as soon as practicable and in no event more than 90 days before entering into the management agreement, covering:

• names and business addresses of owners or general partners, or, if a corporation, directors, officers, and >10 percent shareholders;
• relevant California licenses those people currently hold (design, construction, engineering, real estate, accounting), with license numbers' names, what license, and dates valid;
• relevant professional certifications, including a professional common interest development manager;
• any business in which the manager or firm has ownership interests, profit-sharing, or other monetary incentives;
• whether the manager or firm receives a referral fee or other monetary benefit from a third-party provider distributing resale documents under sections 4528 and 4530.

That last bullet is the resale-package conflict. If the manager's affiliate sells the buyer package, you should know before you sign.

Section 5380 is the money statute. A managing agent who accepts association funds must deposit them into an escrow, an association-controlled account, or a trust-fund account at a California bank, savings association, or credit union, kept in this state in a federally insured (or specified guaranty-corporation) institution, until disbursed on the association's written instructions. On board request, funds may sit in a named trustee or association account that is fully insured, protects principal (no stocks or high-risk options), is kept separate from the manager's money and from other clients, with interest disclosed and not inuring to the manager, and with transfers out of reserve or operating accounts requiring prior written board approval unless below a statutory small-transfer cap ($5,000 or 5 percent of estimated operating income, whichever is less, for 50 or fewer separate interests; $10,000 or 5 percent for 51 or more). The managing agent shall not commingle association funds with the agent's own money or with money of others. The prevailing party in an action to enforce section 5380 recovers reasonable legal fees and court costs.

Florida: license, kickbacks, and a termination right if the license dies

Florida condominium associations that contract with a community association manager or management firm must use a person or firm licensed under part VIII of chapter 468. Board members and officers have a duty to ensure that license exists before entering the contract (section 718.111(3)(g)). If the manager's or firm's license is suspended or revoked during the term, the association may terminate upon written notice, effective the date the party became unlicensed (718.111(3)(h)–(i)). An association may not hire an attorney who represents the management company (718.111(3)(f)).

Kickbacks are a third-degree felony for HOA and condo officers, directors, and managers (720.3033(3); 718.111(1)(a)). Florida HOA fidelity-bond / insurance coverage must cover persons who control or disburse funds, including the management agent, for the maximum funds in custody, unless members waive it (720.3033(5)).

Those are not "typical contract tips." They are statutes. They still sit next to the private-contract problems below.

Typical contract gotchas (label: typical, then verify)

These clauses show up often enough that boards should hunt for them. They are not a secret national code. They are bargaining points.

• Auto-renewal / evergreen. A one-year deal that renews for another year unless you notice 60–90 days out. Calendar the notice date the week you sign.
• Early-termination fee. A liquidated amount, remaining months of fees, or "you pay our lost profit." Compare to Florida's conflict-cancellation rule, which bars termination fees when members cancel a director-interested deal. For an ordinary termination, the contract controls unless a statute says otherwise.
• Who owns the records and the software. Official records belong to the association. A clause that holds the books hostage until a final invoice is paid is a red flag. Florida and California both treat records as association property with statutory owner-inspection rights.
• Add-on fees for work you thought was base. Resale/estoppel preparation, architectural administration, violation letters, and "special projects." In California, section 5375(e) makes the manager disclose resale-document referral fees. In Florida, estoppel fees are capped by statute; a manager cannot lawfully exceed the cap just because the contract tries to.
• Commingling / interest on your money. California 5380 forbids commingling and interest inuring to the manager. Elsewhere, demand a separate association account and a written sweep policy.
• Indemnity that runs only one way. The association indemnifies the manager for almost everything; the manager indemnifies the association for almost nothing.
• Venue and attorneys' fees. Out-of-state venue plus a one-way fee shift.

CAI and other trade groups publish management-agreement checklists; treat those as secondary. The documents that bind you are the contract, the statute, and the board resolution that authorized the signature.

How to hire, and how to fire, without making it worse

Hire: collect the California 5375-style disclosure even if you are not in California — ownership, licenses, related companies, referral fees. Call the state CAM regulator (Florida DBPR for chapter 468; other states vary). Read the fidelity policy. Put the termination-notice date in the board calendar.

Fire: follow the contract's notice method (certified mail to a named address is common). Do not withhold the manager's final fee as self-help if that will freeze the bank accounts. Demand a records-turnover protocol in writing: passwords, owner ledgers, vendor files, website admin, and the current estoppel queue. Incoming managers fail when the outgoing firm keeps the login.

Owners: you still vote for directors. That is the leverage the corporate form actually gave you.

This is general information from an AI helper, not legal advice. Confirm it against your documents and your state's law. If a deadline or hearing is coming up, talk to a licensed lawyer.