If your homeowners association is wanting to start working with a management company, there are a few things you’ll want to analyze in the contract before signing it, as it’s important to make sure you know all conditions of what the contract contains.
A contact between an HOA and the HOA management company is the same as any other agreement for business, so Board members should treat it like one. This article details the areas your Board should look for in the contract for the company you’re considering.
Here are some areas to look for in your HOA management contract:
Services Needed by Your HOA
Make sure the contract mentions all the services your HOA needs from the management company, such as taking care of fees and duties of the Board. Expectations from both the HOA and the management should also be set.
All details should be clearly stated. If you notice any area that is not mentioned in the contract but that your association is expecting from the HOA manager, speak up about it before signing that dotted line.
Services NOT Needed by Your HOA
There may be some areas that your HOA doesn’t need or want help with that the management company may assume it does. For example, the contract might state that the company’s manager will handle mailings, but your Board members want to continue doing the mailings. Not finding this out in the contract can lead to more fees and confusion or conflict among the Board and HOA manager.
Contract Cancellations and Renewals
What if your HOA decides they want to cancel the contract with the HOA management company? Contracts will usually mention a specific amount of notice that is required for the HOA to give if they want to discontinue the relationship. Or you could be facing fees if you cancel the contract early. Look for these details.
Also, some HOA management contracts will renew automatically. Find out when that time is and make a point to schedule a meeting between the HOA and management company before that date to discuss what’s working or isn’t working and give opportunities for renegotiation.
A Good HOA Contract
An HOA should feel comfortable with the contract of a good management company. For example, Cedar Management Group makes sure your Board is happy with the terms and takes the time to discuss any details so the HOA knows exactly what to expect during the management contract period.