Looking to Change your HOA Management Structure?

Qualities to Look for in a HOA Management Company

Each fall, homeowners associations across the nation vote on issues regarding the upcoming year. Fall is also the time of year when many HOA management contracts expire and are up for renewal. If your HOA management contract is up for renewal, this is an excellent time to stop and assess your management situation.

Every day we get phone calls and emails from HOA board members who are frustrated with their current management companies for various reasons. They’ve been with one HOA management company for years, and have watched their service deteriorate over time until it’s finally gotten to a point where they are ready to make a change.

Are you getting the level of service you need from your HOA management company? The vast majority of America’s community associations do not have a professional HOA management company. If your association is self-managed, this is a great opportunity to look at what you stand to gain by retaining the services of a trusted community association management company.

Qualities to Look For in an HOA Management Company

Perhaps one of the greatest and most obvious advantages of hiring a professional property manager is access to the wealth of knowledge and experience they have to offer. Experienced property managers can guide a board of directors through their decision-making process and help to make sound business decisions. What’s the level of experience within your community leadership? Perhaps you already have experienced homeowners on your board. If not, you may want to consider the benefits that an experienced property manager can bring to the table.

HOA management companies are also a big help when it comes to association financials. Budgeting, collecting dues, and working with collections agencies are all part of the management process. An HOA management company collects funds when a homeowner is delinquent on dues, and should work with the board to create a policy on collecting late assessments. Liens and foreclosures often require working with banks and attorneys—another job for the management. Is your HOA management company adept at association financials? Are their reports accurate and easy to read? If not, take this into consideration.

If your association is self-managed, then you will want to assess its financial ability in the same way. Are dues and late fees assessed correctly? Most importantly, is your association allocating adequate funds into reserves? A quality HOA manager will work with reserve specialists and committee members to determine an adequate amount of reserve funding.

Without this preparation, what will your association do when it’s time for a major repair or replacement, such as re-paving the roads or replacing roofs? Staying on top of maintenance issues is a must when managing a planned community. This can prove difficult for larger communities or those with substantial common property. The quality of maintenance is often a benchmark for not only the vendors, but the management as well. Anyone with eyes can determine the physical condition of the community; it can be painfully obvious when maintenance work isn’t done right, or in some cases, isn’t done at all.

How are maintenance issues handled at your community? Are work orders issued in a timely manner, or does it take weeks to complete even the most basic of repairs? Nearly all professional HOA management companies have a list of vendors that they use on a regular basis. These include landscapers, insurance companies, general contractors, and maintenance companies. This means that you don’t have to take a chance on hiring a vendor that may not be able to deliver; your HOA management company has already done the screening process for you.

Signs It Might Be Time to Change Your HOA Management

There are several significant issues that HOA board members usually encounter when dealing with a sub-par HOA management company.

Poor communication is one factor that weakens the relationship between an HOA and their management company. We hear from HOAs all the time who say their community manager fails to return their phone calls or reply to their emails quickly. They leave a message for the community manager, but it takes several days for them to respond, if they respond at all. Homeowners and vendors have the same experience. When it comes to the management of a homeowner’s association, communication is key. A quality management company will always strive to keep an open line of communication with its clients.

In some cases, the HOA’s community manager fails to complete projects. Whether the board has asked for a street light to be replaced, a water leak to be investigated, or bids from a new landscaper, it seems the community manager is continually putting off projects. The board ends up feeling stuck as they repeatedly bring up these concerns without making any progress.

Another common complaint we hear from board members about their HOA management company is that compliance drives or walks aren’t being done consistently, violation letters are being sent to the wrong homes, or the management company isn’t handling compliance in the way that the board has asked.

Additionally, we often hear from board members that they can’t access the HOA’s financial reports online and on demand. We hear from boards that are getting incomplete financial documents; some boards request these reports and never receive them.

Community Managers

Besides the general difficulties outlined above, one of the most frequent complaints we get from HOA management clients who call our office looking for a bid is that they had a great community manager, but then their management company gave them a new person, and then another person, and the current community manager isn’t measuring up.

Community managers can make or break an HOA management company. They are what separate the good companies from the less-than-stellar ones. They can make a board member’s experience positive or negative. They are the reason you love the company you’re with, are barely tolerating them, or can’t wait to switch. Ultimately, there are several important differences between a great community manager and one that’s mediocre at best.

Responsiveness is a key characteristic to look for in your community manager. First-rate community managers know that customer service largely comes down to responsiveness. They return emails immediately; they answer their phone and/or return phone calls; they want to get people the answers they need.

A great community manager also cares about their communities. They want their communities to look good, be safe, and for homeowners, board members, and vendors to all have good relationships with each other. They get upset by the same things that upset board members or homeowners.

Your community manager should also defuse situations instead of escalating them. Ideally, they go into every situation trying to defuse any tension, anger, or frustration that might exist. They know how to put people at ease, and help them realize that their HOA or HOA management company isn’t out to get them. They strive to help the board lead their community in a way that creates trust, confidence, and goodwill with homeowners rather than an adversarial relationship.

Training also factors into the effectiveness of your community manager. Excellent community managers can answer common questions from homeowners and board members. They aren’t novices; they’ve studied local laws and have some experience under their belts. No one knows all the answers, but a good community manager knows where to go and who to ask if they don’t have the answer.

Your community manager should be working full-time. Some HOA management companies use part-time employees as community managers, but a part-time schedule doesn’t provide enough time for the community manager and HOA board to accomplish necessary tasks efficiently.

Finally, your community manager should enjoy their job. Great community managers work for great companies; they quit from companies that overload them and have an unhealthy work environment. If you know of several community managers who have left your management company, it’s likely that the employees aren’t to blame.

Terminating Your Current HOA Management Contract

Are you on the Board of Directors for your homeowners association? Is your HOA overseen by a professional HOA management company? If you answered yes to both of these questions, then you should have a copy of your current management agreement between the association and your HOA management company. This contract holds vital information necessary for properly managing your homeowners association, including how to terminate the contract.

As the end of the year approaches, many HOA management contracts expire and/or come up for renewal. Don’t miss your opportunity to make a needed change in management! Request a copy of your management contract and carefully review it with members of your Board of Directors, in order to explore what your options are when it comes to terminating your management agreement.

It’s important to take the length of the contract into consideration. Determine how long the contract lasts. Is it one year, two years, or three years? If the contract automatically renews (also called “keystone”), what are the time periods that it automatically renews for?

If your HOA wishes to terminate the contract with their current company, you’ll need to find out what stipulations exist for being released from the contract. Will you have to give 30 days’ notice, 60 days’ notice, or 90 days’ notice? Do you need to give notice 30 days’ before the effective date? If so, it’s important for all board members to be aware of the effective date of the contract. Furthermore, does your notice have to be given by regular mail or certified mail?

You’ll also want to establish whether there are any termination penalties involved with being released from the contract early. Will remaining management fees need to be paid out in the case of early termination?

Knowing the exact language in your HOA management contract will help your board members make better decisions regarding their association. Consult with your HOA management company or your HOA attorney for more helpful tips on reviewing your HOA management contract.

Conclusion

No homeowners association should be paying their management company for incompetence and unresponsiveness. Being able to spot key differences between high-quality and low-quality community managers and HOA management companies will help you and your HOA make the right choice for your community’s needs, whether that decision involves keeping your current HOA management company or not.

11 Comments

  1. Jay iUrkums May 12, 2016 at 4:18 pm - Reply

    Unclear about exactly what records must be returned to the HOA,especially financial records.

    • Cameron Lange January 25, 2017 at 9:45 am - Reply

      Hi Jay

      I am not exactly sure what records you are speaking of. You can request association records from your association, but won’t receive anything specific to other owner accounts. Hope this helps some. Have a nice day

  2. Em September 22, 2016 at 7:40 pm - Reply

    We hired one h.O.a. company and approx. three months they gave our community to a diff. Company with little to no experience in condo management the company background is with apt.Annabel

  3. Donna October 25, 2016 at 2:24 am - Reply

    I need help with getting the current incompetent and unresponsive hoa mgmt company out and a respectable hoa mgmt company in.

    • Cameron Lange November 2, 2016 at 9:15 am - Reply

      Feel free to contact us at spectrumam.com/contact we look forward to speaking with you

  4. David T Kampen March 27, 2017 at 10:13 pm - Reply

    Our HOA is currently controled by the home builder but will be turned over to the home owners in the next 3 months. We need to organize a board and everything else required. Can you supply us with any information about how to make this transition. Also would your company be interested in managing a HOA in Covington, LA?

  5. McSwain May 27, 2017 at 11:25 pm - Reply

    Our current H.O.A. Company was assigned by the Developers and are everything that was mentioned on being incompetent. Homeowners are very unhappy. Developers are about to transfer the community over to H.O.A. We’re at 75%.There’s only one Homeowner on the board. So far H.O.A. has switched from one team to the next and still fits the category of being incompetent if not worse. In the process of a Do over for the nomination of the remaining seats that are to be filled by the homeowners. This due to the previous team giving only 28 days for the first nomination. Now we have to wait an additional 30days. Common areas are looking bad Etc.

  6. M D SloN July 21, 2017 at 8:07 pm - Reply

    As a home owner I have looked through all of my closing document’s, can’t find a homeowners agreement anywhere, the only thing that is remotely connected to home owners association is the explanation of payment of 591.00 for one year. I have nothing that stipulates any by laws that is stipulated for the neighborhood. This seams odd to me should I not have a contract with my signature agreeing to its terms and conditions.

  7. Angie July 27, 2017 at 9:35 pm - Reply

    I would love to dump our property management company, but the only way to communicate with the board is through the property manager, and the board won’t hold meetings without the property manager present. Our particular manager is a horrible bully and does nothing but make promises that aren’t kept. The community has deteriorated since she’s been in charge of it.

  8. R. R. Perez August 5, 2017 at 7:31 am - Reply

    I am one of many owners of a condo complex (not high-rise) that has been poorly managed by a voted in part time manager. This manager has been managing the property now for 11 years. Our property has greatly deteriorated, making the appearance of the complex looking substantially bad! If anyone has a complaint or an issue, they call a number only to leave a message. The manager takes their time to answer or get back with that individual sometimes! Board members are not very enthusiastic people and do nothing about this. There are many delinquent dues and the landscape just looks outright awful! As a homeowner, I would like some information on how to replace our manager, is it legal, and what our options are to better and beautify our complex community. I would honestly give this complex about another 10 years before they become legally condemned. Is there anyone to help us, and is it affordable to hire someone to manage our condominium community?

  9. Jeff Evans September 11, 2017 at 9:08 pm - Reply

    I’ve found that one of the biggest downfalls of community management companies is that they don’t communicate effectively. I own multiple condos and know firsthand how bad HOA Management can be. It’s helped me to really appreciate the good managers.

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