For many homeowner associations, there are times when the services of an HOA management company are required. Unfortunately, most HOAs are unable to gain significant advantages as they do not hire the right service company. Before you select an HOA management company for your association, there are some things you must take into account.
In this article:
- Select an HOA Management Company the Right Way
- 5 Factors to Consider
- On Your Way to a Fruitful Partnership
Select an HOA Management Company the Right Way
At some point or another, every HOA considers seeking the help of an HOA property management company with day-to-day operations. Your HOA board is likely comprised of volunteers who are unable to dedicate all of your time solely to the association. Because of this, you need outside help — preferably from experienced professionals.
If this is your first time hiring an HOA management company (or you currently have one and just want to know how to change HOA management company), it is not enough to Google “HOA management companies near me,” pick the first one and call it a day. The selection process is a little more intricate and sophisticated than that.
When deciding on a management company for homeowners associations, keep in mind that there is a right way to go about your search. Here are the steps you must take, in sequential order, when you select an HOA management company:
1. Form a Search Committee
While it is possible for your board to do all the leg work, it is recommended to form a search committee, as well.
When creating a search committee, make sure to recruit volunteers who are competent and responsible. A specific area of expertise — such as law, finance, construction, etc. — would be an added bonus, too.
In addition to members of the community, the committee must also include a few board members to ensure proper processes are followed. Moreover, this way, there is a liaison between the board and the committee.
2. Determine Bidding Specifications
Before you can select an HOA management company, you must first decide what your bidding specifications are. Determine what type of service you require and how much you are willing to pay for them. Additionally, settle on whether you would like your board to take on some level of work or for the HOA management company to take on all the tasks, with the board being a more passive party.
3. Draft a Request for Proposal
Now that you have laid the groundwork with your bidding specifications, it is time to create a request for proposal. When writing your request for proposal (RFP), it is important to include all of the pertinent details, including your expectations. Remember to send the same RFP to all HOA property management companies so that you can make a fair decision. Do not send out different RFPs per company.
4. Evaluate Based on a Criteria
Assuming you sent out the same RFP to everyone, the responses you get from HOA management companies should contain the same type of information. From there, you must evaluate each proposal based on fixed criteria.
It may even do you well to have potential homeowners association management companies send back a service proposal and a fee proposal separately.
Evaluate the service proposal first before moving on to the fee proposal. This way, you can assess the merits of their services without letting price influence your evaluation. Consider using a points system to analyze the value of each HOA management company.
5. Narrow Down Your Options
The evaluation process should show which HOA management companies are leading. From there, keep the ones that are high in ranking and get rid of the rest. Doing this will narrow down your options to a more manageable size.
6. Conduct Interviews
Hiring an HOA or condo association management company is similar to hiring an employee — there should be interviews. By scheduling a face-to-face meeting with your candidates, you can get to know them better and get a general idea of what it would be like to work with them.
Exchanging questions and answers via telephone or email simply won’t cut it. Before you conduct these interviews, though, you must first draft a set of interview questions designed to help you select an HOA management company that best suits your needs.
7. Review the Contract
After choosing your winner, have your HOA’s lawyer look through your contract prior to signing. This way, you can make sure your association is legally protected and is not getting into an unfavorable deal with the HOA management company. Your lawyer can also look for an auto-renew clause and inform you accordingly.
8. Track Performance
The process does not stop after the contract signing. Now that you have an HOA management company, you must monitor their performance to make sure they are delivering everything they promised. If you feel they are not doing a proper job, you can switch to another company after the contract expires.
5 Factors to Consider
There are a ton of HOA management companies in the market today. As such, it is important to take every aspect of their services into account before making a decision. Here are some of the factors you must consider when you select an HOA management company:
1. Client History
Arguably the most important factor of consideration is their client history. From simple testimonials to the entire experience, a professional HOA management service company has a long client history.
For example, some companies may have served hundreds of thousands of clients, while another only served a few dozen.
Do note that it doesn’t mean that HOA management companies with more clients are always the top brass. There are cases when new entrants in the HOA management industry perform well due to the fewer clients they have since they can be more focused as well as their untainted vigor in what they do. As such, always select an HOA management company that has a positive client history.
2. Number and Quality of Services
After client history, HOAs are required to view both the number and quality of the services provided by the HOA management service company. These companies offer, at minimum, budgeting, assessment, reporting, conflict resolution, and collection services. There are others that offer monitoring, accounting, enforcement, maintenance, and financial analysis services.
More importantly than just the number of services is the quality of services. If such a company has a proven track record, it will list testimonials of the extent of their service quality. As such, always select an HOA management company that offers both a number of services and does so at a high level of professionalism.
3. Cost of Services
While the number and quality of services are vital to the final decisions, they need to be feasible. Despite their reputation, quality and professionalism, it would be unwise to hire a company that an HOA cannot afford. After all, hiring an HOA management service company is often a recurring process.
As such, always strike a balance between professionalism and quantity. There is a relatively high chance that HOAs may be able to acquire a lower rate if repeatability in hiring is discussed.
Despite their affordability, professionalism, and reputation, it is rather disadvantageous if the HOA management service company to be hired is unavailable when they are needed. As such, HOAs are required to ensure that the company to be hired has relatively high availability year-round as well as when the HOA requires them the most.
Another major factor of consideration is the accessibility of the HOA management service company. More often than not, HOA management service companies can be located a significant distance away from the residential community or the HOA itself. Hiring such companies may still be possible but may incur extra, usually avoidable, costs. As such, always select more accessible alternatives.
On Your Way to a Fruitful Partnership
Partnering with an HOA management company has many benefits. In addition to lightening the load of your HOA board, an HOA management company brings expert-level skills and valuable resources to the table. But, the selection process can be difficult if you have never done it before. Select an HOA management company the right way by following these steps and considering these 5 factors.
Whether your association is new to this or wants to change your current HOA management company, do not hesitate to give us a call or shoot us an email.
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