Homeowner associations provide a host of services for subdivisions, condominium complexes, and apartment communities. But most HOA board members are volunteers and too busy to provide all the services they are supposed to. This is what HOA management companies need to fill. When you find a good one, hiring an HOA management company is a game-changer. But, if your management doesn’t provide the services you need or provide them poorly, it’s time to hire a better company.
Hiring an HOA Management Company Made Easy
HOA management companies offer a high level of expertise in all aspects of running a homeowners association. If you are currently looking to hire an HOA management company, you’ve got your work cut out for you. Choosing the best one that is right for your HOA, though, can be more difficult than it first appears. Consider the following steps to hiring an HOA management company that will give you the service you need:
Step 1: Get Member Buy-In
Send out personal notes to every HOA member. Let them know the board of directors is in the process of hiring a new management team. Invite every stakeholder’s input. This must be a community decision. When big decisions like this are made by only one or a few people, they can create resentment.
Schedule a meeting for discussion on how to hire an HOA management company. Invite useful suggestions and establish a clear direction for moving forward. During the meeting, discuss what the members want from their management company. Prioritize and write down the services requested.
Step 2: Services You Should Include
When considering a switch to an HOA management company, there are five important functions management companies should be asked about during interviews. Start with these and add any others your HOA members requested.
- Accounting and Collections
Accounting and collections are some of the most essential functions of your HOA. Any time community money is involved, it is most prudent to have professionals handle it.
Dedicating money management to a third party legitimizes your HOA financial image. It eliminates the opportunity for mismanagement allegations against fellow members who would otherwise be in charge of this money.
It also does away with the awkward chore of collecting money from neighbors and friends. Members do not have to worry about conducting court proceedings against their own community members for non-payment. Assigning money management to your management company removes any hint of financial impropriety on the part of its own membership.
- Community Maintenance
This one can be tricky. Some management companies offer full maintenance from an in-house provider. Others are more limited to what they offer. Cedar Management Group, for example, has a maintenance team on-staff while also providing maintenance vendor coordination. If we can’t do your job, we will find someone local who can.
The hiring committee should confirm what maintenance is included, and what is not. Get it in writing. Do not presume, and again, work with the community to make a decision. If you’ve ever lived with management company maintenance and they did a good job, you’ll probably appreciate it greatly. On the other hand, you came away with a very different opinion if the maintenance was sub-par. Make sure to make the decision that is right for your community.
- Violations Enforcement
This is another sticky area that can get very testy. Violations enforcement is an often ugly process most people simply do not want to deal with. However, it is absolutely necessary. If enforcement is not in place, you have no codes. If you have no codes, an HOA is essentially useless. It protects nothing.
Luckily, hiring an HOA management service company takes care of this problem. Violations enforcement is usually handled by the management company. It’s good practice to ask companies you are interviewing how they handle violations from start to finish.
- Board Education
In a partnership, each party needs to know its responsibilities and obligations with the partnership dynamic. Any good management company educates and informs the HOAs it serves.
The HOA should understand its duties and how it can help the management company be the manager the HOA wants and hired. The management company must also know and honor the commitment it made when it signed the HOA contract.
- Legal Advice
Your HOA agreement must be in legal compliance in case it is ever challenged. After all, it is the agreement all members are required to sign and adhere to. A good management company has the legal resources to review these agreements and lend assistance if they find a problem.
Many management companies offer a wide range of legal services. The most common services you should look for are help with collections, document analysis, and fair housing compliance review.
You should seek out a management company that is willing to work with your existing attorney to ensure a smooth transition. If you do not have legal representation already, most companies have a network they can tap to help you out.
Step 3: Narrow Down Your Options
Once you have an idea of what you want, you have the framework for a fruitful management company search. Take that framework and find four to five management companies in your area. Reach out to this list with questions about each service you need. The questions you ask do not need to be too detailed at this phase.
At this step in the process of hiring an HOA management company, your goal is just to get an idea of where each company’s priorities are and how they support their clients. Finally, review the answers you get back to narrow your list down to three. This final three can be measured against each other for your final decision.
Step 4: Finalize the Deal
After you’ve narrowed down your choices, it’s time to get down to brass tacks. First, you should obtain a list of costs from the management companies you are considering. Residents need to know what they are paying for and why they are paying it.
The committee should prepare a list of costs with any needed explanations for every household. These costs must be in line with the services the committee agreed upon. Make sure the committee gives the opportunity to correct and approve the list.
Next, take the time to review the contract. Look beyond the costs and services. Make sure you understand both your contractual responsibilities to the management company and their responsibilities to you. This is a basic caution, and very important when representing other people’s interests. Carefully look over the service contract and make sure it fulfills committee requirements.
Finally, make sure to get the names and direct contact numbers for key service personnel. You need direct access in case of emergencies, and you need to speak to the person specifically responsible for handling your need. Ideally, you should also be able to meet someone from the company face-to-face. This way, you can be sure you are working with someone you trust.
Effectively Hire an HOA Management Company
Hiring an HOA management company can be challenging if you don’t know where to start. Hopefully, after reading this guide, you’ll be able to arrive at a decision and act with more confidence. All you have to do is obtain member buy-in, look for the right services, and narrow down your options before sealing the deal. Follow these four steps, and you’ll be on your way to a better association in no time.
If you don’t have the time to go through all these steps, consider going with a reputable and proven HOA management company like us. Just give us a call, and we can set something up.
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