Generally speaking, HOA communities that have a dedicated property management company working for them are happier and more productive. Management companies add value to governed communities by applying their knowledge and experience to improve efficiencies, augment property values and reduce operating costs.
But managers are multi-tasking pros and can do a lot more for a community, depending on the HOA’s needs and the management company’s areas of expertise. Managers will work with boards and residents to improve communication and engagement, dispute resolution and even governance.
Find the right property management company for your community, and you will notice all of the positive changes that the company is able to provide. However, not all property management companies will be a great fit.
Narrowing down your list
You’re probably aware that each management company is a little bit different. Some have different skills, others implement different management styles. The hard part about choosing one company is that there is no right choice. The goal here is to find a team that understands your community’s needs and how to effectively resolve the problems or issues that are detracting from the HOA’s success.
Most HOA boards interview several companies before making a final decision about which one to hire. When researching and interviewing potential management companies, shortlist the ones that:
- Have some relevant field experience
- Are qualified and able to provide your HOA with the services it needs
- Can demonstrate that they are flexible and can get results without requiring board members to give up all of their control
- Show a genuine interest in working with your HOA
Once you have identified strong candidates, the real work begins. You’ll want to conduct interviews, speak to references and ensure that the company checks off all of your “must-have” boxes.
While the 8 qualities and skills we list below are often preferred by HOAs, your best match may have different strengths and characteristics. This is just a guideline for HOAs to keep in mind.
The biggest reason that HOAs hire community managers is that the board and committee members simply do not have time to do everything by themselves. Just thinking about all of the tasks and responsibilities makes one dizzy. As such, you want a team or individual who will be able to devote the time needed to properly manage the community’s daily operations.
Most HOA managers care for more than one community at a time. Good managers can do this just fine as long as they don’t have too many clients in their portfolio. HOAs can hire a full-time onsite manager, but it is costly to do this.
So, make sure to ask prospective companies about how many clients their managers are expected to care for at one time. Inquire about the type of support systems they have access to, such as an admin assistant who can take messages or direct maintenance requests to the appropriate department.
Don’t neglect questions about availability and response times. Is there a 24/7 answering service? What is their policy for emergencies? In how many days should board members or residents expect a response from their manager?
You’re paying for the community manager’s time, so make sure your expectations about this matter align.
2. Great communication skills
In addition to seeking a timely response from an HOA manager, boards should evaluate the team’s communication abilities. Oral and written skills should be examined since community members will assumedly be interacting with the manager in person and through email. Don’t forget to see how well your candidates can listen. Only through active listening can managers ask the right questions and provide the correct information.
Communication is critical to the success of any kind of relationship, and misinformation is often the root of most problems. When communication is effective, it leaves all parties involved satisfied and allows them to move forward with projects and tasks. By delivering messages in a timely, clear and professional manner, the potential for conflict is also minimized.
In situations where conflict does arise (there will be times when an angry owner will confront the manager), effective communication is a key factor in ensuring issues are handled properly.
Finally, there are several different forms of communication available, and it’s important for the manager to know what channels work best. Depending on the information that needs to be shared, they may choose email, a newsletter, physical mail, or even an in-person meeting. If the interviewee has special communication tools that they use, you can ask about them and request to see a sample of their writing.
3. A clear explanation of the services provided
HOA management companies provide an array of services, but they can generally be grouped into 4 categories: management, accounting, communications and administration.
Some board members feel that it is very important for candidates to define these services, and list what is included in each category. It may be helpful to inquire about any published procedures and standards they use to guide them.
Much of this information will be included in the completed request for proposal (RFP). An RFP is a document used to detail what the HOA needs from a vendor, in this case, the management company. The vendor is expected to explain how they will meet the needs of the association if hired. However, it is more reassuring to hear the company tell you in person what they can do and how they can help your association.
4. An appreciation for technology
Property management software is becoming an essential item for HOA management companies. While resident portals and communication platforms don’t do the work for them, they do streamline and automate manual tasks for busy HOA managers. Instead of having to log every service request in a binder, or add email addresses one by one every time a new message needs to go out, the software does the grunt work for the managers. Processes are standardized, which means they are done right every time. Furthermore, managers are able to accomplish more in the same amount of time (which means your association gets more attention from them).
Management software can be just as helpful to board members and residents as it is to management companies. Many platforms make it easy to save and protect valuable association documents in an online storage area. Not only can admins control who has access to folders, but board members can find the documents they need, no matter where they are working, since the cloud-based technology allows them to access the platform from any device.
Residents also get more self-serve options, meaning they can pay fees, book amenities, acquire visitor parking, submit service requests, log short-term rental stays, and view important announcements using their account. Residents appreciate the ease and convenience, and staff end up with a lighter workload.
Your management company should understand the value of technology, and have the ability to explain the benefits of the software that they use to you.
5. Good references
A Colorado HOA realized that some money was missing when the board president asked its management company if he could use the association’s bank card to pay for building expenses. The company told him that he should not use the card because the association’s account was restricted by the bank due to fraudulent activity. The president contacted the bank and was told that the management company had reportedly paid $29,996 out of the HOA’s funds to a “fraudster” after receiving a “compromised email” with an invoice requesting immediate payment.
The transaction was so large that it exceeded the balance of the association’s operating account, funded by dues and other fees paid by owners of the condo building’s 65 units. Records show that the bank actually reached out to the management company after it processed the payment because the account was overdrawn, and the company authorized the bank to take $20,000 out of the condo’s reserves to cover the transaction. The board should have been asked to approve the transactions, but they were never asked.
The HOA fired the management company, and tried to seek help recovering the stolen funds from authorities and legal professionals. It was instructed to reach out to the HOA office in the Colorado Department of Regulatory Agencies. But the office replied by saying that it could not investigate the matter because HOA managers were no longer subject to any government oversight in Colorado. The story gets worse, and lack of government oversight in Colorado means that this HOA won’t be the only victim.
Would the story have ended differently if the HOA had gotten the correct references and heard from other associations who had similar experiences with this management company? Almost certainly.
In fairness, most management companies will not provide potential employers with references that won’t have good things to say about them, but that doesn’t mean you shouldn’t ask. You may even try to reach out to associations who have employed the company on your own.
Ensure that at least one of the references is the same size as your community. Smaller communities sometimes feel as though they do not get the same level of service as large associations. Conversely, large communities sometimes feel that they are too big to get the service they need from the company.
Now is not the time to make assumptions or trust that the management company has sufficient insurance coverage. Your board must request to see copies of the company’s insurance certificates. Note that different states will have different requirements. An HOA management company must have above-satisfactory coverage since there is always a chance that a liability or injury claim could be brought against the company.
7. Willingness to go the extra mile
This quality is not always easy to measure, but you can get a sense of what type of service a manager is willing to provide by speaking to references. We’re not suggesting that managers should work overtime and give up their weekends for your association, but are they willing to take periodic walks or drives through the community to check up on the property? Do they remember names? Are they able to find hard answers for you? Do they try to educate homeowners?
To get a better idea of the type of care you can expect from a company, ask to speak to the managers who would be assigned to you if you hired that company. Have a discussion with them about their proudest moments, and what they do to distinguish themselves from other professionals in their industry.
8. A way to measure success
Goals aren’t very useful if you don’t have a way to determine when they’ve been achieved. The HOA management company you hire should have a system for evaluating its own performance. Companies may host performance reviews for their staff, and may also ask the association for their feedback too.
The HOA should also establish targets for the manager and assess if those targets have been met after a certain amount of time.
Tips to make the hiring process easier
- Be clear about what the HOA needs
The process of hiring a management company is going to be extremely difficult if your board doesn’t know what it’s looking for. The board must identify needs and desired outcomes before it starts interviewing companies.
- Ensure staff are licensed or accredited if this is a requirement
Some states require association management companies to carry a license. Others do not. Check your state laws to see if this applies to you. Even if licensing is not a requirement, licensed companies have an understandable edge over unlicensed ones.
- Hire someone you like
If you’ve narrowed it down to 2 or 3 really strong candidates, go with the company you like the best. The company’s culture and values are important, and you will work better together if their values align with those of your community.
- Interview the manager the company would assign to your community
Like companies, individual managers are all unique. Some will fit in with your community better than others. But managers aren’t always assigned to an HOA based on skills or qualifications; sometimes they are assigned based on who has the lightest workload. Do what you can to secure a manager who will thrive in your association.
- Prioritize value over costs
Cost is a key concern for any association. You shouldn’t try to hire a company that you know you can’t afford. However, boards are discouraged from sacrificing quality of service for a cheaper price. It is a good idea to separate a company’s services from its fees when trying to narrow down your list. Focus on the value as opposed to the most affordable option.
Never enter into a contract before you’ve had a lawyer review it
Once you’ve settled on a company, it’s time to finalize the agreement by signing a contract. Both parties should enter into the agreement with a complete understanding of what they are agreeing to. As such, the association needs to have an HOA lawyer review the contract before it is signed by the board. A lawyer will ensure that the association’s rights are protected and point out anything that could be problematic.
Make a note to find out about the company’s termination clause as well. What are the consequences of terminating a contract early? How much notice must the company give you if they decide to end the contract? Get all of the details in writing now so your association isn’t hit with an unpleasant surprise later on.
Selecting a new HOA management company isn’t something that can be achieved in a day. It will require research, and careful consideration from your board. But the time you invest in finding a good company will pay off.
Hiring a professional management team is the surest way to build value for your entire community. Managers have the skills and experience required to improve processes, increase the value of the developments, and resolve issues that have been plaguing the HOA. They can also improve relations with owners, help get the association’s finances back on track, and even teach the board a thing or two.
When you find a qualified company for your association, you’ll wonder how you managed without them. They make life easier for you, and help your board achieve the goals that matter most to your community.