You, along with your fellow homeowner’s association members, have decided that it is time to seek the help of a management company. One of the first questions that come to mind is, “Which association management company to hire?” To be able to determine your options and assess which management company is best for your community, you need to create a request for proposal or RFP. But, what is an association management RFP exactly? And how do you make a good one?
What Is an Association Management RFP?
A request for proposal is a document asking for the proposal of a business that would be interested in doing business with you. This proposal will detail everything you need to know about a supplier or business entity you are considering hiring or buying from. Service-based companies typically have prepared proposals for interested clients. However, these association management proposals still have to be customized to the client’s needs.
An RFP is simply asking the company to give you a long and detailed sales pitch. In this case, you are asking the association management company to send you their best pitch on why you should hire them. In the process, you also have to provide them with the information they need to make a proposal that is custom-fit for your community.
An RFP typically contains a complete overview of your HOA’s history, including detailed documents and financial statements. Supplying comprehensive and accurate information in your association RFP will directly affect the quality of the proposals you will receive from association management firms.
How to Draft Your Association Management Request for Proposal
Now that you know the RFP definition, it is time to discuss what you should include in yours. What is an RFP that’s complete and comprehensive? It should explain what your association wants long term — a strategic plan of what you want to get accomplished when you hire a management company. You need to provide specific details, even down to how many association meetings management is expected to attend per month.
To help you draft a detailed association management RFP, these are some of the important questions you should answer:
- Is the association incorporated? If so, in what state?
- Is your association identified as tax-exempt by the IRS?
- What is your association’s total operating budget?
- What are the goals of your association?
- What are your reasons for wanting to hire an association management company?
- What is the association’s yearly revenue?
- How many members does the homeowners association have?
- What is the current membership retention rate?
- Who manages the homeowners association currently?
- How are the homeowners association’s dues presently structured?
- What is the chain of command of your association?
- How are meetings scheduled for your homeowners association?
- What are the key obstacles going forward for your association?
There are also many important financial documents you will want to include in your association management RFP. The following are all good candidates for inclusion:
- List of documents
- Yearly reports
- Bylaws & CC&R’s
- Association meeting minutes
- Most recent financial statement
- Year-end audit/review
- Policy manual
- Membership application
- Meeting brochure
- Advertising rate card
Your association’s transition plan must also be present in the RFP document. This plan is particularly important for HOAs who are switching from one management company to the next. A complete breakdown of your current HOA fee structure will also be helpful to indicate your budget expectations. Due diligence is critical in this process.
Parts of an Association Management RFP
When creating your request for a proposal, knowing its components is essential. Generally, there are two main parts of an association management RFP:
- Summary. The first part of your RFP should consist of the summary of work needed to be accomplished as well as an estimated date and time you expect it to be completed. You should also indicate your general expectations, the scope of work (installation method and materials required), where equipment must be stored when not in use, and any other requirements your association might have in mind.
- Details. The second part goes into more detail, outlining what sort of information you expect to receive from contractors. You may ask them to describe how they plan on carrying out the work. This can also include licenses, certificates of insurance for general liability, worker’s compensation, prior experience, and customer reviews.
What Should You Expect in an Association Management Proposal?
You have sent your RFP, and now, the association management company you reached out to has replied. It is imperative to analyze if the company made a detailed and thorough proposal. These are the things you should look out for:
- Project Overview
- Company Background
- Project Goals
- Work and Deliverables Scope
- Timeline of Deliverables
- Technical Requirements
- Budget and Costing Breakdown and Analysis
- Software and Systems Needed
- Employee Assignments
When going through the proposal, first check if it is made based on the information you supplied them. Is this a proposal customized to the needs of your community? If it is, add them to the list of association management companies you will consider. If not, move on to the others.
You can also set a deadline for the request for proposals you sent out. This allows you to compile all the proposals and assess them within a specific time frame, especially if you have a target date for the transition. Furthermore, having a deadline will show if an association management company is serious in doing business with you by respecting the date and time you have set.
The Importance of Association Management RFPs
Association management RFPs are undeniably vital to any homeowners association. They outline your expectations, budget, and requirements, leaving no room for misunderstandings and saving time along the way. While some people think these requests only complicate things, that notion cannot be farther from the truth. They are not just a formality — they are an indispensable part of any community association.
Getting an RFP together can be a difficult and tedious process. Luckily, many association management companies like us are willing to help. Whether you have an RFP ready to go or still need help, reach out to us online or by phone.
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