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Ultimately it is the association that has responsibility for compliance with various laws. Look to the contract or agreement with the management company to determine their responsibilitites. In most situations, the management company has a responsibility to advise the board and in more complex issues, advise the board to obtain a legal opinion. If the board has lost confidence in the management company, it should consider terminating the agreement. The board may also have legal recourse if the advice or actions of the management company have exposed the board to situations having legal or financial consequences.
As an example, consider three provisions of the North Carolina General Statutes in Chapters 47F and 47C.
- The association must give notice and hold an annual meeting.
- The association must adopt and distribute an annual budget.
- The association must publish the names and addresses of it's officers to it's members.
Look to the terms of the contract between the association and the management company. Another consideration, is that management companies will often do less than more if there is contention between board members. They do not want to be placed in the difficult position of appearing to take sides or jeopardizing their contract with the association. Generally, management companies will advise, but unless the board directs that specific actions be taken by the management company, the association is responsible.
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