Hiring an HOA management company is not always easy. In fact, many communities struggle with the hiring process because they don’t have a standardized procedure. This guide should help your association with the hiring process.
Steps to Hiring an HOA Management Company
An HOA management company can free up the board’s time by assuming a large portion of the workload. Management companies make it significantly easier for board members to run the association. But HOA boards should be careful to choose the right management company or suffer from poor management.
Here are the most critical steps when hiring an HOA management company.
1. Understand Your Needs
First, it is important to understand your needs as an association. Not all HOAs require the same types of services. Your association may only need financial management services, whereas your neighboring community may need full-service management.
To determine your needs, your HOA board should open a discussion. List down what you are struggling with as a board. Identifying your needs early on will help you look for the right management company and set expectations with them.
2. Invite Input from Homeowners
While the board is responsible for selecting the management company, it is also good to seek input from homeowners. This way, owners won’t feel left out of the decision.
Let homeowners know that your board has begun the hiring process. You can do this by sending out a notice or posting the announcement on your community website. Then, allow owners to give their two cents at the next board meeting.
They can share what services they think the association needs. Of course, this can quickly get out of hand, so make sure your board keeps this open forum section tight.
3. Send Out RFPs
The next step when hiring an HOA management service company is to send out a request for proposal (RFP). Your RFP should include background information on the project, the services you’re looking for, specific requirements, and any questions you want candidates to answer. You can also include a projected budget.
It is important to distribute an RFP when soliciting proposals from management companies. This way, you can create a standardized format, receive all the information you require at once, and make more direct comparisons.
4. Screen the Candidates
Once you have a list of candidates, it is time to screen them. Check their licenses and credentials. An Accredited Association Management Company (AAMC) from the Community Associations Institute (CAI) tends to be more credible.
A good management company should also carry the proper insurance policies, including liability insurance and workers’ comp. Ask for a Certificate of Insurance as proof of coverage. You should also ask for this every year to ensure they renew their policies annually.
5. Conduct an Interview
Ideally, you should interview your candidates as well. This will allow you to ask more specific questions, such as how they deal with emergencies and their level of availability.
If possible, try to get an interview with the manager they plan to assign to your community. An interview will let your board understand how the manager deals with their clients. It is important that your values align with theirs to facilitate a more harmonious working relationship.
6. Make a Selection
After gathering all the information you need, you should be able to decide. Your board might feel tempted to choose the cheapest option, but cheap only sometimes translates to quality.
While management fees certainly factor into the equation, you should weigh them against the services they offer. A good way to evaluate companies is to consider the services first and the price second.
You may also want to consider the number of clients a company has. A company with many clients may need help to give your association the level of attention it deserves. In contrast, a company with only a handful of communities under its management can more easily prioritize your association.
Additionally, it is a good idea to check reviews and references. Ask candidates to provide you with a list of communities they currently or previously managed. Then, get in touch with them personally to ask about the company.
7. Negotiate and Review the Contract
Contract negotiations can be tricky, but they can also be very helpful. You may be able to knock the price down a little to suit your budget better or ask the company to throw in a few services free of charge. There is no guarantee that the company will agree, but there is also no harm in trying.
Once you’ve made your selection, make sure to review the contract. Don’t let your eagerness to sign trap you in an unfavorable deal. Look through the contract to ensure that it includes everything you discussed. Watch out for an auto-renewal clause, which gives your HOA a deadline to cancel the contract, or it will renew automatically.
As for the contract duration, starting with a one-year contract is always best. This gives your association enough time to test the waters without getting stuck with a multi-year deal. As with all contracts, have a lawyer review the management agreement before signing.
8. Track Their Performance
When you hire an HOA management company, the process continues long after the ink on the contract dries. Some management companies perform really well the first few months but settle into a lazy routine afterward.
Make sure to monitor your management company’s performance and provide a report every month. This way, you can determine whether or not to renew your contract for another year. If the company does not live up to expectations, you can renegotiate the contract or switch to a new company. Again, look out for that pesky auto-renewal clause.
Hiring an HOA management company is more complex than it seems. You need to take several critical steps to ensure you choose the right one for your association. You want a company that meets your needs and expectations and can take your community to greater heights.
Landmark Community Management is just the HOA management company for you. We have everything you need and more. Call us today or contact us online to request a proposal!