Mismanagement of funds
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Mismanagement of funds
I live in a 30 unit condo complex. Less than 5 years ago, the entire complex had renovations that amounted to around 120k. When all was said and done, the budget grossly exceeded that for almost 270k. My understanding is the president of the condo association at the time was working with the account rep of the property management company managing the complex in a vacuum which led to the overage. Is it possible to sue the property management company for mismanagement of funds since they went over budget by almost 150k?
Asked on April 12, 2019 under Real Estate Law, Illinois
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 2 years ago | Contributor
If the president of the condo association approved all the work, expenses, costs, etc., then the management company did nothing wrong: it is their responsibility to do what their client says, not to make decisions for their client, and if their client, the association, as ratified by the president of the association, wants to overspend, that may be unwise but it is legal.
If the property management company committed fraud, such as by deceiving the association and president as to costs, or breach of contract, such as by charging more than they had contractually agreed to charge (if there was some contract or agreement with a maximum cost in it), then they could be sued, because in these cases they did something wrong--but again, not if they disclosed all the costs, etc. to the president and he approved them.
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