Running an HOA is a lot like running a business. Boards must look after finances, take care of maintenance, assist owners, organize meetings, etc. It takes a great deal of work to ensure an HOA runs smoothly, which is why many communities hire help.
HOA management companies assist with day-to-day operations. HOA managers handle duties such as administrative work, enforcing rules and regulations, implementing fines and fees, creating financial updates and reports, and communicating with residents.
Think of a management company as a team of advisors. They help HOAs reach their goals and objectives, but it’s still up to the board to make final decisions and lead the community.
Every company does things a little bit differently, and each has unique strengths and weaknesses. A company that works very well with one community may not be such a good fit in another. That’s why HOA boards must take their time and do proper research before hiring a management company.
Determine the needs of your HOA
The first step to finding the right HOA management company for your community is to determine what you want and need the company to do.
- Do you require the basics or are you looking for an augmented level of service?
- How often do you expect the manager to be on-site?
- What is the association able to spend?
- Do you need a company that can connect you to vendors?
Once the HOA has a clear idea of what they need, they’ll be better positioned to identify a company that would work well with the association.
Research
There are probably dozens of property management companies available to serve you, so making a shortlist can be one of the most challenging aspects of this process. If possible, ask for recommendations from friends or acquaintances who live in other associations. You could also visit Google to locate some of the best HOA management companies in your area.
Once you have identified some candidates, find out what certifications each potential management company has, and ensure they meet all requirements set out by your state and your HOA. Ask for references and take the time to have meaningful interviews with those references. For example, find out how the management company handles conflict, how well they communicate with owners and the board, and how knowledgeable they are.
Ask the companies about their availability (i.e., how many hours the company can devote to your HOA each month and their daily hours of operation), and what they do when an after-hours emergency occurs.
Finally, while you might not get a detailed breakdown of fees, ask for a rough quote. This way, you will know whether or not you can afford a company before investing more time in them.
Making the decision
By this stage, you may have four or five companies you’d like to interview. Before you meet with the companies, it’s wise to send out requests for proposals (RFPs). The purpose of an RFP is to help you make an unbiased decision. The proposal will provide you with details about services, expectations, limitations, fees, and references or credentials worth noting. Make sure to ask for a fee schedule from each potential firm and read through each company’s standard contract. Include a deadline for submissions so that you receive all proposals within a certain amount of time.
After reviewing RFPs, bring in the companies that you want to interview. Interviews should last 60 to 90 minutes so that the board has time to talk and ask questions. This is your chance to find out what each company has to offer and what sets them apart from other candidates. Conducting a thorough interview allows the board to get a truer sense of what each company is like, and what it might be like to work with them.
Hiring
After a thorough evaluation, it’s time to choose a company. Before bringing the new company on board, you will both need to sign a contract. The contract clearly spells out all of the company’s terms and policies, including how to terminate the contract. It is legally binding, so don’t sign it without having your lawyer look over the document first.
Qualities of top HOA management companies
Great HOA management companies have the ability to stand out from the competition because they understand their clients’ needs, and know how to deliver results. While these qualities alone may not place companies at the very top, they do help boost their ranking.
Strong communication skills
Good communication is the foundation of every successful HOA management company. This is because communication is a crucial element of successful association management. Boards and owners need clear, accurate information in order for the community to operate well, but delivering information in an effective manner isn’t always easy. HOA management companies should be able to keep an open line of communication with board members, staff, vendors, and owners.
Qualified companies should be able to identify and explain HOA tasks and responsibilities well, delegate tasks, inform board members about new laws, policies, etc., provide timely feedback, and resolve (or at least mediate) disputes between owners.
Experience
There is simply no substitute for experience. Established HOA management companies with reliable track records can be invaluable resources to associations. Keep an eye out for a company that has dealt with different aspects of HOA management, such as general administration, maintenance, finance, insurance, legal, and communications. Companies that have been doing their job well for ten or more years have a wealth of information and real-world experience to share, and they’ve probably resolved problems that your HOA hasn’t even thought about yet.
Detail-oriented
Almost every company will add this trait to their list of qualifications, but the board should do its best to verify that the company is indeed detail-oriented. Since they will be handling HOA operations, it’s important to have a management team that is thorough as well as efficient. They will be able to identify small issues that could spiral into big problems.
A company that cares about the small stuff will ensure that paperwork is error-free, updated, and saved in the proper place. Organized companies may use checklists and schedules to ensure they haven’t missed a task or deadline.
Flexible
Most HOAs like to hire companies that can offer a strong sense of direction, but the company should be able to work with your association and demonstrate some flexibility when it comes to management. Flexibility is a very desirable quality in an HOA management company. This trait allows them to help your community change and grow in a way that is agreeable for everyone. Rigidity is often met with resistance, and boards generally aren’t happy if they feel like the management company is telling them what to do.
What happens if I make the wrong choice?
If the HOA management company and the association just aren’t getting along as they should, or if one party had different expectations, then it may be time to look at terminating the relationship. The contract that both parties entered into will state how long the contract is valid for, and what steps need to be taken if the HOA wishes to get out of the contract early.
If the HOA wishes to terminate the contract, the association will need to give notice (usually between 30 days and 90 days), and determine if there are any termination penalties involved with being released from the contract early. If both parties feel that terminating the contract is best, the company may agree to waive termination penalties.
Conclusion
Hiring an HOA management company takes some time and work, but the rewards are worth the effort. When you find the right company for your association, you’ll wonder how you managed without them!