HOMEOWNERS ASSOCIATION MANAGEMENT AGREEMENT. This Management Agreement ( Agreement ) is made this day of 2016,
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- Bertha Taylor
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1 ST WAY SOUTH FEDERAL WAY, WA BUS. (253) FAX (253) AFTER HOURS EMERGENCY: (877) HOMEOWNERS ASSOCIATION MANAGEMENT AGREEMENT This Management Agreement ( Agreement ) is made this day of 2016, by and between (the "Association") and Coldwell Banker Commercial Danforth & Associates Management. In consideration of the mutual promises and covenants herein contained, Association and Managing Agent agree as follows. 1. RELATIONSHIP OF PARTIES This contract is strictly between The Board of Directors and Coldwell Banker Commercial Danforth Management. Unless otherwise agreed to by the parties in writing, Coldwell Banker Commercial Danforth Management is not contracting with individual Board members, homeowners or other parties contracting with the Association. Coldwell Banker Commercial Danforth Management shall take instruction only from the Board of Directors of the Association, as authorized in a duly held Board Meeting. 2. APPOINTMENT The Association hereby appoints Coldwell Banker Commercial Danforth Management as Managing Agent. Coldwell Banker Commercial Danforth Management (hereinafter Managing Agent ) hereby accepts the appointment on the terms and conditions hereinafter provided, as exclusive agent of hereby stated as the Association. Managing Agent shall have the power, authority and duty to supervise the management of the Association, and shall perform the duties and carry out the functions of the Association, all as provided and specified in the Association s Governing Documents and as directed by the Association s Board of Directors. As used herein, Governing Documents means the documents referenced in Exhibit A hereto. The terms of the Governing Documents are, by reference, fully incorporated herein. 3. MANAGING AGENT'S DUTIES Managing Agent shall render the following services and perform the following duties as managing agent in a professional, diligent and businesslike manner. In the performance the obligations imposed by this agreement, Managing Agent and its officers, directors, employees, representatives and agents shall at all times exercise reasonable care. 1
2 A. General Managing Agent shall: Provide educational and informational materials to the Association Board as requested to assist in the operation of the Association. Provide professional advice and guidance in the operation of the Association. Provide professional and courteous service to all Board and Association members. However, managing agent reserves the right to require Association members who have behaved in a rude, threatening, abusive, profane or otherwise uncivil manner to communicate with the Association exclusively in writing. Provide, at the Board s request, educational classes for members of the Board or the Association. Provide one site visit per month plus scheduled meetings and emergencies. B. Maintenance With respect to maintenance work performed on Association property, Managing Agent shall use reasonable care to hire, supervise the work of, and discharge vendors. It is expressly understood and agreed that, except as otherwise provided herein or in an addendum to this Agreement, all vendors are solely employed by or under contract with the Association. It is further agreed that managing agent is not liable to vendors neither for compensation; nor to the Association or to others for any act or omission on the part of such vendors. The managing agent shall: With the approval of the Board, establish and implement maintenance schedules and arrange for the completion of maintenance work. Work with the Board to establish maintenance standards and policies governing buildings and grounds. Obtain proposals and/or bids from contractors and vendors for services for the Association. Issue work orders for needed repairs that have been authorized by the Board, and make recommendations or suggestions for improvements. Maintain a database of various vendors and contractors the Association s use. Unless otherwise directed by or authorized by the Board, have the authority to expend a maximum of $ per month (including both items paid for and charges incurred) for non-budgeted routine maintenance items. Emergency repairs that involve a manifest danger to life and property and that are immediately necessary for the preservation and safety of the project, or for the safety of the occupants, may be made or authorized by the Managing Agent without regard to the preceding limitation, provided that Managing Agent shall not incur direct or contingent liabilities that will mature more than one year from the development thereof without first obtaining the approval of the Board. 2
3 Timely report to the Board of any maintenance or replacement items that are scheduled in any reserve study prepared for the Association. Supervise maintenance of the property, project, and common areas in accordance with accepted industry standards. C. Financial Accounting Services Managing Agent shall: Once yearly no later than 60 days prior to the end of the fiscal accounting year, assist the treasurer in preparing a draft budget for the Board s review and approval. Prepare a monthly financial report and provide the same, via first class mail or , to all Board Members at least 7 calendar days prior to the next regularly scheduled Board meeting, but no earlier than the 24 th of each month. The monthly financial report will consist of the following: balance sheet, statement of revenues and expenses, cash reconciliation report, check register, variance reports by fund, and delinquency report. Provide the Association s treasurer with original bank statements (unless the treasurer is already receiving original bank statements directly from the financial institution) and reconciliation reports for each account on a monthly basis, as statements are provided. Within 30 days after the end of the Association s fiscal year, Managing Agent shall submit to the Board financial statements including income statements, schedule of receipts and disbursements and a balance sheet for the preceding year. (The Association s tax return and audit, if any, shall be prepared at the Association s expense by an accountant of its selection.) Collect monthly assessments and prepare and post information on individual unit ledgers. Prepare and mail delinquency notices and refer serious delinquencies to the Association s attorney upon written authorization of the Board. Establish and maintain all operating accounts in the name of the Association and ensure that Association funds are at all times segregated from any of managing agent s fund. Timely pay from the funds of the Association s Operating Account all taxes, fees, insurance premiums, charges and other financial obligations owed by or incurred by the Association. Prepare and maintain accurate payroll records for all personnel who provide services to the Association. Make deposits into the Association s Reserve Accounts as directed by the Board. Provide statement for each Reserve account to Association s Treasurer. Promptly reconcile all Association accounts and provide accurate financial reports regarding Association s accounts to the Board. Cooperate and work with accountants designated by the Association in the performance of yearly audit or review. Carry and maintain an insurance rider that provides a minimum of $50, employee dishonesty coverage throughout the term of this Agreement and provide proof of such coverage on request. 3
4 Train new Treasurers how to read reports and explain how to reconcile accounts each month. The Association understands that it is responsible for opening or closing Reserve Accounts, and for transferring or withdrawing funds between or from Reserve Accounts. The Association also agrees that the financial records of the Association shall be professionally audited, at Association expense, upon termination of this Agreement. D. Association Insurance Managing Agent is required to assist the Association in matters relating to protection of the property against risks. Managing Agent shall: Upon request by the Board, secure bids for insurance coverage. Obtain, subject to the approval of the Board, and maintain appropriate insurance coverage for fires and extended coverage, general liability, fidelity bonds, statutory and other approved forms of insurance coverage as specified in applicable statutes and in the Governing Documents. Timely pay all insurance premiums and timely submit all documents required for renewal of insurance policies. Assist in processing insurance claims. 4. ASSOCIATION OPERATIONS The Association agrees to operate according to the following standards listed below to the best of their ability: The Board shall act and operate in a manner consistent with the duties imposed by statute and by the Governing documents. The Board shall act as the decision making body for the Association. Managing Agent shall implement and carry out the lawful decisions of the Board. The Board shall appoint one of its members to act as the primary contact person for the Managing Agent. The primary contact person shall be responsible for relaying communications between the Board and Managing Agent. This provision does not preclude other Board members from contacting the Managing Agent or gathering information in the performance of their duties. 5. MEETINGS Managing Agent shall assist the Association with the scheduling and facilitation of meetings of the Board and of the members of the Association and shall: Prepare and distribute meeting notices, proxies, ballots, agendas, etc. in accordance with the requirements and provisions of the Governing Documents. Prepare special reports as directed by the Board and at a charge or fee to be mutually agreed upon. Attend up to a maximum of 12 meetings per year, including Board meetings and the annual meeting of the Association s members, at no additional cost to the Association. Meetings scheduled on Friday 4
5 evenings, weekends, holidays and more than once monthly shall be attended by Managing Agent at an additional charge of $ per meeting. Maintain a complete file containing copies of meeting notices, proxies, ballots, agendas, and minutes. The Board shall provide Managing Agent with minutes of the meetings of the Board and of the Association s members within a reasonable time of the date of the meeting. 6. ADMINISTRATIVE Managing Agent shall assist the Association with administrative matters and shall: Maintain complete records and files for the Association including, without limitation, financial records, unit owner files, owner account ledgers, correspondence, minutes, and corporate and tax documents. Provide one mailing per month to all homeowners. The mailing shall include a copy of Board meeting minutes and may include newsletters and financial information. Managing Agent shall be reimbursed for costs of such mailings as set forth in this Agreement. Maintain an accurate and up to date roster of current owners and tenants which includes, at minimum, the name, address, telephone number and unit numbers of each owner and tenant based on information supplied by the Association, owners, tenants, escrow, title companies and other reliable sources. Provide an administrative worksheet to the Board of re-occurring Association requirements performed by managing agent. Promptly respond to communications from the Association s members. Prepare and distribute warning letters, fine notices and other correspondence as needed and directed by the Board, and in a manner consistent with the Governing Documents. All correspondence drafted or mailed on behalf of the Association shall be on Association letterhead. Work with the Board to develop and enforce Rules and Regulations. Rule enforcement shall be undertaken only if non-compliance has been reported in writing by a member of the Association and as directed by the Board. Maintain a list of vendor and contractor licenses, insurance, and L&I coverage based on information provided by vendors and contractors. Verify license, insurance and L&I information provided by vendors and contractors. Managing agent reserves the right to refuse to do business with those contractors or vendors that fail to provide such information on a timely basis. Provide a communication system and forms for use by the Association s members and the Board in contacting Managing Agent and Board members. Provide necessary liaison and coordination with other Association agents including, without limitation, attorneys, accountants, auditors, etc. Provide a 24/Hour Emergency Number which is Reference Byron Hiller or Manager as the manager when calling. Call your manager first. Call 911 if the emergency is life-threatening. 5
6 7. EMPLOYEES It is acknowledged that there are no employees of the Association. 8. INSURANCE Managing agent is insured. 9. CONSTRUCTION MANAGEMENT For construction management (all work not considered of a maintenance, replacement or repair nature), that exceeds $5,000.00, Coldwell Banker Commercial Danforth Management does not provide management services. Coldwell Banker Commercial Danforth Management does not have the specifically trained construction management personnel to manage such projects. As part of its service, Coldwell Banker Commercial Danforth Management will provide bids for the Association from licensed construction management firms. Coldwell Banker Commercial Danforth recommends that for any capital improvement project, the Association hire such a company, architect or engineer to oversee the work. 10. MAJOR CONSTRUCTION, RE-CONSTRUCTION, LAWSUITS, MAJOR INSURANCE CLAIMS, EARTH MOVEMENT REPAIRS All major construction or re-construction due to lawsuits, major insurance claims, repairs due to earth movements or other major projects that would not be normally considered part of routine or scheduled maintenance, repair or replacement, shall be considered non-contracted services. The Association may contract with other providers, such as engineers, architects, and project management firms, attorneys or other appropriate companies for such services. If Managing Agent is asked to provide coordination and other management services for such non-contracted services, the fee for Managing Agent s services will be billed at the rate of $75.00 per hour. 11. SPECIAL ASSESSMENT Special assessments shall be charged at an additional one time set-up cost of $7.00 per unit per assessment, plus a minimum monthly accounting fee of $35.00 per hour, with a minimum charge of $35.00, for the duration of the collection of the assessment. 12. ASSOCIATION S FUNDS Managing Agent shall deposit all moneys received by Managing Agent on behalf of the Association in a checking account maintained by Managing Agent for the deposit of moneys of Association. Such funds shall not be commingled with funds of Managing Agent or other Associations. All operating account disbursements shall require the signatures of at least two individuals employed by Managing Agent. All disbursements from Reserve Accounts shall require the signature of at least two persons who are both officers or directors of the Association. Managing Agent will not be held liable in the event of Bankruptcy or failure of a depository. 6
7 13. BANK ACCOUNTS Managing Agent shall maintain a bank account in a bank whose deposits are insured by the Federal Deposit Insurance Corporation, in a manner that indicates the custodial nature thereof, for the deposit of the moneys of the Association. Bank charges shall be borne by the Association. 14. AGENT'S FEE For services performed under this Agreement, Managing Agent shall receive a fee of $. per month. Compensation as herein provided is to be net to the Managing Agent over and above operating expenses of the Association. 15. REIMBURSABLE EXPENSES Upon receipt of an itemized invoice, Association shall promptly reimburse Managing Agent for all costs associated with mailings, newsletters, office supplies, coupons, envelopes, and postage in the following amounts: Photocopies Postage Courier Charges Envelopes Payment Coupons Facsimile Transmissions.15 per Copy Actual Cost Actual Cost Actual Cost Actual Cost No Charge 16. RESALE CERTIFICATES Managing Agent is authorized by the Association to charge a $ fee (or the maximum allowed by law) to a selling owner for the issuance of a re-sale certificate when requested in writing by the selling owner. Managing agent may also charge an additional Rush Service fee to anyone that desires a resale certificate immediately. Refinance questionnaires have a cost of $ UNDISCLOSED FEES Managing Agent shall not collect for Managing Agent s own account or benefit any undisclosed fee, rebate or discount. Any such fee, rebate or discount shall be credited to the Association. 18. START UP FEE There will be a onetime set up charge of $. per unit, which shall be refunded to the Association in full in the event Managing Agent terminates this Agreement during the initial one-year term. 19. TERM The term of this Agreement shall be from the date of the execution hereof for a minimum of one year and monthly thereafter. 7
8 20. TERMINATION This Agreement may be terminated with or without cause by either party upon giving 30 calendar days advance notice of termination in a manner consistent with the Notice provisions contained in this Agreement. If the Association terminates this Agreement prior to the expiration of the initial one-year term, the Association shall pay a termination fee of $. per unit. If Managing Agent terminates this Agreement prior to the expiration of the initial one-year term, the Managing Agent shall pay a termination fee equal to the Start Up Fee referenced in Paragraph 18. Managing Agent shall deliver to the Board all records, documents, receipts, invoices and statements of the Association no later than 10 calendar days after the date of termination. 21. NOTICE Any demand, request or notice that either party hereto desires or may be required to make or deliver to the other shall be in writing and shall be deemed delivered when personally delivered, or when delivered by private courier service (such as Federal Express), or three business days after being deposited in the United States Mail, in registered or certified form, postage prepaid, return receipt requested and addressed as follows: If to the Association, then to: If to Managing Agent, then to: Coldwell Banker Commercial Danforth Byron Hiller st Way S Federal Way, WA MODIFICATION This Agreement shall constitute the entire Agreement between the parties and there are no further agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof. No variance or modification of this Agreement shall be valid or enforceable except by an agreement in writing. 23. INDEMNITY Except in the case of willful misconduct, fraud or gross negligence, the Association shall indemnify and hold Managing Agent harmless from any claims, costs, expenses, and attorney s fees arising from the condition of the premises, the acts of the Association and third parties on or about the property of the Association, the management of the property by Managing Agent, and the performance of the terms of this Agreement and of Managing Agent s responsibilities hereunder. 8
9 24. HAZARDOUS SUBSTANCES As used in this Agreement, the term "hazardous substances" shall mean pollutants, contaminants, toxic or hazardous wastes, medical or infectious wastes, reactive substances that could explode or any other substances, the removal of which is required or the use of which is restricted, prohibited or penalized by any "environmental law", which term shall mean any federal, state or local law or ordinance relating to pollution or protection of the environment. It is agreed that Managing Agent has no authority or control under this Agreement with respect to the use, storage, deposit or removal of hazardous substances on the property or properties covered by this Agreement. If at any time during or after the term of this Agreement, the property or properties covered hereby are found to be so contaminated or subject to said conditions, Association agrees to indemnify, defend and hold Managing Agent and its employees and agents harmless from all claims, demands, actions, liabilities, costs, expenses, damages and obligations of any nature whatsoever, including but not limited to attorney fees, arising from or as a result of the use, storage or disposal of hazardous substances. The foregoing indemnification, duty to defend and hold harmless Agreement shall survive the termination or expiration of this Agreement. 25. CONSTRUCTION Any titles or captions of paragraphs contained in this Agreement are for convenience and reference only and the words contained in them shall not be held to expand, modify, amplify or aid in the interpretation, construction or meaning of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identification of the person or persons, firm or firms, corporation or corporations may require. The locative adverbs "herein," "hereunder," "hereto," "hereby," "hereinafter" and the like, wherever the same appear herein, mean and refer to this Agreement in its entirety and not to any specific article, section, subsection, paragraph or subparagraph hereof. The general rule of construction that an agreement will be construed against the party who drafted it will not apply to any disputes over the provisions of this Agreement. For the purpose of construing or interpreting this Agreement, the Agreement is deemed to have been drafted equally by all parties hereto, and shall not be construed strictly for or against any party. The invalidity or unenforceability of any particular provision in this Agreement shall not affect the other provisions hereof. 26. NO WAIVER The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such a provision, nor in any way to effect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall constitute or be deemed a waiver of any other breach. 27. ATTORNEYS FEES In the event of litigation, arbitration or mediation between the parties hereto, declaratory or otherwise, in connection with or arising out of this Agreement, the prevailing party shall recover from the nonprevailing party all actual costs, actual damages and actual expenses, including reasonable attorneys' fees, paralegals' fees and other professional or consultants' fees expended or incurred in connection therewith, including for appeals, which shall be determined and fixed by the court as part of the judgment. 9
10 28. GOVERNING LAW This Agreement shall be governed by, and in accordance with, the laws of the State of Washington. Each party hereby irrevocably agrees that: (i) any legal action or proceeding arising out of or related to this Agreement may be brought in the Superior Court for King County, Washington, and (ii) submits to the jurisdiction of any such court. IN WITNESS THEREOF, the parties hereto have executed this Agreement the day and year first written above. President Vice President Treasurer Secretary Broker Managing Agent Byron K. Hiller 10
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