Homeowners Association boards hire a property management company with the expectation that they will deliver top-notch professional services, providing support and alleviating the weight of daily responsibilities from the HOA board members while fulfilling the board’s decisions and mandates.
When an HOA is experiencing challenges and poor service with its management company, it is the right moment to consider a change. It can be inconvenient and time-consuming to locate the right fit. However, hiring a credible and reliable management company that puts the HOA first pays off for all community members.
When to Consider a Change in Your HOA
Several ongoing situations will alert an HOA to the need to hire a new management company. These include:
1. Frequent Manager Turnover
When your HOA management company consistently provides you with new managers, it may indicate unrest and instability. At a certain point, it behooves the HOA to start asking questions, as training costs time and disruptions in the smooth running of the complex. In addition, high turnover inspires a lack of confidence and could indicate a lack of communication and disclosure from the management company.
2. Poor Communication and Follow Through
Homeowner Associations expect and rely on open and dependable communication with their management company as a part of their service contract. A professional manager should be easy to reach and remain in touch even when they don’t have immediate answers to specific questions. Watch out for evasion tactics and delayed responses.
3. Lack of Consistent Service
Management companies are hired to fulfill the HOA Board’s decisions and keep the community running optimally, overseeing extensive contracting renovations to ensuring daily maintenance. The manager must track the progress of any improvement projects and provide the board with regular updates and timelines. Inconsistent performance and lack of follow-through are indications that it’s time to think of changing companies.
4. Inconsistent Bookkeeping
Every member of an association is entitled to full disclosure of the HOA financial status at any time. Managers are required to provide the board with concise and up-to-date financial statements when asked. They are expected to keep track of vendor bids and hold them to their contracts. If your management company is struggling to submit timely reports, it behooves the board to review the manager’s bookkeeping practices.
5. Failure to Stay Current with Codes and Regulations
Every community is subject to that state’s codes, in addition to their governing documents covering rules and regulations, bylaws, conditions, and restrictions. Managers are expected to fully comprehend the legalese of these documents and stay current with changing laws and codes. As part of their service, they should be a valuable guide and provide vital support to the board in all matters pertaining to the successful growth and management of the community.
Engaging A New Property Management Company
An HOA needs to be run like a business, and using a management company should ensure that your business is run smoothly and consistently. When it isn’t, and the complaints are mounting up, there are vital steps to follow as you make the transition to another property management company.
Board members must first reach a consensus to switch to another company. Consult the HOA attorney to review and discuss the present management company contract. Confirm the contract expiry date and determine the length of notice, in addition to any other potentially hindering specifics outlined in the service agreement, such as an auto-renewal clause. If there is a cancellation policy, there may be fees. Depending on how dire the circumstances are, it may, in some cases, be wiser to wait out the contract and not renew it before searching for a new manager.
Board members need to keep HOA members apprised of what is happening during the process through regular notices, outlining the reasons for ending the current management contract, explaining the interim plans, and inviting questions. Involving residents by learning of their concerns regarding the previous management and taking their opinions and priorities into account when reviewing potential new managers is an excellent way to start on the right foot to find the right fit.
Considerations In Your HOA Search
When your HOA reviews potential management team candidates, there are several points to consider. Checking these boxes will help weed out the companies that won’t align with your requirements.
- Establish your needs and wants in a management team for your community. Have specific requirements fixed and include considerations solicited from HOA community members. Before an all-out search, consult with HOA lawyers, as they usually have connections to reliable companies due to the nature of their business.
- Consider creating a committee to research and canvas potential management firms. Committees can do the administrative leg work of requesting proposals, collecting and reviewing bids, and conducting the initial interviews. They would then distill all information and present their findings to the board.
- Narrow down your selections and review the submitted bids. With your budget in mind, weigh the merits of the management firm’s inclusions within their fee structure. Getting a reasonable price doesn’t always equate with a good company, and larger firms are not always better either, as their resources may be stretched thin with multiple clients.
- Due diligence is vital when choosing the right management firm. Research their credentials and check references thoroughly. Word of mouth referrals can be a great start to narrowing down your choices; however, don’t rely on that alone. What may be suitable for one community is not necessarily best for yours.
- Interview your top final candidates and give them a tour of your community. Meeting face to face with the board will provide a stronger indication of personalities and allow for more detailed questions, and body language says a lot with the responses.
- Have the contracts reviewed by your HOA attorney to ensure that there are no loopholes and terms agreed upon are laid out clearly. Once the contract is signed, work with the new management company to ensure a smooth transition. Enable them with a clear and concise plan of action and provide initial support as needed.
Hiring a management company for your HOA community is the beginning of a hopefully long-term relationship, and, as with all relationships, there will be occasional ups and downs.
The key to success is finding a professional firm that will share mutual respect and open dialogue with HOA members, providing the board with all current information, and keeping the complex in good running order.