Selecting a HOA management company for your living community can be a daunting task requiring a lot of time and much consideration. But it doesn’t have to be as painful as you’re imagining. Everything can benefit from a little preparation and process; we’re happy to provide you with some insight on what yours should look like as you embark on the selection journey.
Your choice of an HOA management company can significantly impact the well-being of your community and the satisfaction of its residents, so it’s worth committing some extra time to your decision-making. Beginning with assessing your association’s needs, then researching potential management companies before finally conducting interviews, we lay out how each stage of the process plays a pivotal role in your long-term success. Making a choice that aligns with your community's vision and values ensures your well-cared-for association feels like home. Let's dive into the key steps to guide your HOA board in informed, strategic decision making as they select an HOA management company.
Assessing Your HOA's Needs and Goals
The first step to finding the right HOA property management solution for your community involves a bit of soul-searching. Together as an association, spend some time getting clear on what the needs, goals, and challenges you’re looking to overcome are. You probably have an idea of the areas you need the most support in; they’re likely part of what led you to this very article. The list may vary in length and include things like, financial management, maintenance needs, group communication, and/or compliance with local regulations.
More difficult than simply identifying these areas of discontent is setting some clear objectives around your needs. By creating clear needs to address, you are developing a criteria that you can use to evaluate potential HOA management companies. Put these needs in order of priority. Rather than going just on gut instinct alone, you’ll have an idea of what you want and can determine how the right management company will deliver on those points.
Finally, as part of this self-assessment, consider the vision you have for your living community. It may be important to you and your residents that the values of your homeowners association management company align with the values set forth by the HOA. So, if you haven’t explicitly defined what’s important to your association, it might be a good time to name those things. Values can be more general things, like promptness, fairness, and safety, or they could be cause-specific ideals, like sustainability, diversity, or neighborhood pride.
This discussion should leave you with a clear understanding of what your association is looking to achieve by partnering with an association management company and what your overall expectations are. Armed with this information, you’ll be empowered to make informed decisions for your HOA and residents as you embark on this process.
Researching Potential Management Companies
Next on your quest for the HOA management partner of your dreams comes the research phase. Now, it’s important that you don’t skimp on this part, because while it may feel like you’re spending too much time on this step, whatever you can do to vet potential candidates earlier in the process will save you time and heartache later down the road.
Information should be gathered from a variety of sources and you’ll want to best understand your options by seeking out information from different means. Other HOAs in your area as well as industry professionals can be exceptionally valuable resources on this topic. Additionally, HOA-industry serving organizations, like the Community Associations Institute, often maintain lists of accredited management companies. Visit company websites and get a sense of what different organizations offer and value in their HOA property management.
As you do your research, here are some specific things to keep an eye out for:
A company with proven experience and expertise
Working with an established management company means they’re more likely to have “seen it all” and know how to properly handle the full-range of challenges you are currently experiencing or may endure in the future. Experience affords a company better decision-making, problem-solving, and efficient management of your community. Property management can come with a unique set of challenges, at times. If and when something like a large maintenance issue surfaces, a resident dispute needs resolving, or a difficult vendor contract gets presented, you’re more likely to be at ease when working with a property manager who has navigated these situations before. Testimonials, reviews, and notes on a company’s longevity and commitment to the industry are all good indicators of a proven track record.
The service offerings you need
When it comes to the particular services offered by property management firms, not all are created equal. Packages can vary in their levels of involvement and it’s important to find the service offerings that align with the community needs laid out in the first step of this management matchmaking process. In terms of the spectrum of services that HOA property management companies can offer, a basic level of service might involve managing the financials of the community, communicating with residents about meetings, and maintaining resident records. A more involved level of service could include all of the aforementioned offerings in addition to many more aspects, like managing maintenance, vendors, or construction projects, providing leadership training to board members, and hosting your community’s website.
You might be surprised just how all-encompassing HOA management can be! If a management company offers tiers of service, they should be able to clearly present those different service levels. Their ability to do so may serve as an indicator of their ability to be organized and customer-oriented.
Communication methods
Another key element to take into account is a management company’s style of communication. Property management involves coordinating with a lot of people, places, and regulations, so it is essential that those overseeing it all are clear communicators that value transparency. The right company should make it a priority to keep residents, board members, and vendors alike informed and engaged. Oftentimes, companies utilize technology to streamline the communication process. It’s worth looking into the methods and software they use to communicated and reflecting on how those methods will jive with your community.
Transparent communication helps to foster the trust vital to an effective HOA-property management relationship. If tricky situations arise, all parties should be able to discuss matters open and honestly. You want to be able to count your property management to get things done and keep you informed throughout the process. Timely resolution, proactive problem solving, and overall resident satisfaction are all benefits of great communication.
Local knowledge
When compiling your list of companies to work with, consider the value of looking local. Communication with your property management company can take place without in-person meetings, but sometimes, it can be helpful to know that they can be there to support you in-person as well. Local HOA property management companies can do quick, onsite property inspections between tenants, they can meet with boards in-person, and they can better understand the unique pros and cons of living in a particular area. For example, your local property management company has firsthand knowledge of maintaining property in your area’s particular climate. And familiarity with the area you live ensures greater expertise in local regulations and compliance, mitigating the risk of potential legal issues associations may encounter.
Additionally, working with a local company can often mean having a more in-depth knowledge of and longer-term relationship with established local vendors. Working with local vendors can mean faster response times and a better working relationship. Beyond that, if supporting your local economy is important to you, selecting a local property managers who work with local vendors might best align with your community values.
Getting to know potential candidates
Prepare the right questions to ask
Asking the right questions during the interview process is essential to ensure your HOA board's satisfaction with the chosen management company. By asking thoughtful questions, you can uncover important information about their services, values, and approach. This will help you understand if their way of working matches your HOA board's expectations and your community’s vision.
But how do you know the right questions to ask?
Below is a rundown of six critical questions to ask the management companies you interview. Asking these questions will ensure that everyone is on the same page, leading to a happy and successful partnership between your HOA board and the management company you choose.
1. What are the services you offer?
If you’ve done your research, there’s a good chance you’ll already know the answer to this question. However, you want to make sure you have the most up-to-date information. Gauging their answers to this question and the way that they respond will help you understand how they work with clients. It also gives you the opportunity to discuss your community’s priorities. You’ll want to ask for a complete list of the services they offer so you know exactly what you’ll get when you begin working together.
2. What are your qualifications?
Making sure the HOA management company you select possesses the appropriate qualifications and employs licensed professionals is crucial. It reflects a commitment to quality and expertise in handling the various aspects of community management. Likewise, an association management company that holds the proper qualifications indicates a dedication to professionalism and accountability. To put it plainly–you need to ensure that the management company is getting a certified expert to repair the cracks in your sidewalk, rather than their cousin Bob who “patched up his driveway one time”. By choosing a management company with licensed professionals, you’re proactively safeguarding the effective management and well-being of your community.
3. What’s your company’s mission statement?
This is one of the most critical yet overlooked questions to ask when scouting association management companies. Familiarizing yourself with the mission statement of a prospective HOA management company offers you an initial insight into its approach and role as a business collaborator. It also gives you the opportunity to reflect on its alignment with your community’s values. So make sure you don’t leave the interview without getting an explanation of the company’s vision, purpose, and overall objectives.
4. What’s your average response time when issues arise?
If a pipe bursts or a light goes out, you want to know your management company will be there promptly to fix it. Let’s face it, no one wants to walk through puddles in their home carrying around a flashlight. This is why asking an HOA management company about their average response time for addressing issues is a crucial step in ensuring effective community management. Knowing how quickly they can respond when something goes wrong shows how dedicated they are to keeping things running smoothly and sets realistic expectations for your residents.
5. Do you have an HOA emergency plan?
Inquiring whether an HOA management company has an established emergency plan is a vital aspect of community preparedness. Having a well-thought-out system in case of emergencies assures residents that you’re equipped to handle unexpected events efficiently. Management company’s emergency plans should include a clear plan to follow in the event of unforeseen situations so that everyone in the community has peace of mind.
6. How can we reach you?
It’s no secret that effective communication is the lifeblood of any business relationship. An HOA management company with the most qualified professionals won’t be worth hiring if they have poor customer service. So you need to make sure you’re aware of how you can get in touch with them. Understanding their preferred communication methods is essential, considering they will play a significant role as your community's dependable partner.
Now that you know the right questions to ask during the interview process, let’s go over the group discussion that should follow it.
Have a group discussion
Engaging with your HOA board after interviewing potential management companies is paramount for a successful partnership. You want to make sure you’re aligning values and visions beyond simply evaluating proposals.
When every member on your HOA board has the opportunity to share insights and impressions, you can collectively assess values, communication, and expertise alignment. Revisit those needs and goals you laid out originally and reflect on how the interviewed companies hold up to them. This debrief empowers your board to make an informed decision, enhancing your community's functioning and growth.
Reviewing proposals and contracts
With the interview process offering a valuable firsthand insight into the personalities and approaches of different HOA management companies, we’ll now shift our focus to what comes next in this decision-making journey: The HOA management company proposal and contract. While interviews provide a sense of the people behind the scenes, the proposal and contract lay out the concrete terms and commitments that will shape your partnership.
Comparing the proposals
Once you begin the process of comparing proposals from different HOA management companies, it's essential to carefully assess each proposal before making a final decision.
Taking the time to write out a list of pros and cons for each proposal can provide a clear overview of what each association management company offers. Make sure you consider key aspects like the range of services, the expertise of their team, the proposed fees, and any extra benefits they provide. This method helps in pinpointing which company aligns most effectively with your HOA's unique requirements and objectives. Likewise, it ensures that you choose the management company that will bring the most value and benefits to your community.
Breaking down the contract
Unless you have a JD in contract law, decoding legal jargon can be a daunting and time-consuming task. So, we’re going to help you grasp the key sections outlined in a standard contract between you and your HOA management company. When everyone on your HOA board understands the contract, you’ll be able to collectively oversee processes effectively, ensuring a transparent and productive partnership with your management company.
Scope of Services
In a nutshell, the Scope of Services (sometimes referred to as “scope of work” or “terms of services”) section in an HOA management company contract is a list of all the things that the management company promises to do for your association. This list helps everyone know what to expect and what the management company will take care of, such as making sure the grass is cut, helping with repairs, and keeping everything nice and clean.
HOA Company Management Fees
The Fees section outlines the financial arrangement between your HOA and the management company. This section specifies the fees the management company will charge for their services, like administrative work, maintenance coordination, and financial management. Additionally, it may detail any additional charges that could arise, like special projects or emergency services.
Just as you'd want to know the price of a product or service before you buy it, understanding the management company's fees helps the HOA plan its budget and ensures transparency in financial dealings.
Liability
Often referred to as the Hold Harmless Clause, liability is an integral aspect of an HOA management contract as it safeguards the management company from any liability, provided they’ve acted in the association's best interests. For instance, let’s say that they hire a third-party contractor who damages association property. As long as the HOA management company exercised their due diligence when they hired the third-party contractor, they wouldn't be held accountable. That said, this section of the contract doesn't shield the HOA management from liability in instances of negligence or fraud.
Duties
An HOA management company contract will outline the distinct duties that your HOA board and the management company will be responsible for. Your HOA's responsibilities may include tasks such as providing essential information, granting access to records, and participating in important decisions. Conversely, the association management company's duties might involve tasks like financial management, coordinating maintenance, and fostering communication among residents.
This well-defined division of duties ensures that both parties understand their roles, promoting effective collaboration and the smooth operation of the community.
The bottom Line
While interviews, proposals, and initial assessments provide valuable information, it's wise to conduct a final round of thorough research. This includes performing background checks on potential management companies and consulting references to gauge their track record and reputation.
Once you’re satisfied with the research you’ve done on the top remaining management companies you’re looking at, it’s time to pull the trigger and decide who you want to partner with. As there’s no doubt your HOA board plays a pivotal role in shaping the community's future, the final decision should be a collective one that reflects the shared vision and best interests of the community as a whole.
By involving the entire board in this process and conducting diligent research, you can rest assured that you’ve made an informed decision that will lay the foundation for a successful partnership and a thriving community.