Seven Avoidable Mistakes Made By Condo or HOA Boards When Hiring a Management Company
By Arnold Barzak III; PMSD, CMCA, AMS, PCAM
1. They don't review their current management agreement...
The savvy Board reviews the management agreement with their attorney to understand the cancellation process.
No matter how bad the service you received, you are bound by the terms of a management agreement. You don’t want to spend the time and effort finding a new company only to find you need to retain your current company for another nine months or be faced with a high cancellation penalty.
2. They don't tell prospective management companies about the association and its current needs...
The savvy Board is honest with prospective management companies; provides them with their challenges; and asks questions about how those challenges will be handled. Here's a link to a condo association management RFP (request for proposal) you can fill out and give to prospective management companies.
All too often a Board will put together a long list of questions to ask a management company, but they never want to talk about their association, what services it needs, and the problems it’s facing.
3. They don't meet at the property with the prospective property management company prior to requesting a full management proposal...
The savvy Board schedules meetings with prospective management companies to review and discuss the elements of the association that they will be managing. This also gives the Board members in attendance a chance to get to know the people that may be working for them for many years to come.
To really get a full understanding of the community, including its assets and problems, it is important to walk through it with the prospective management companies.
4. They don't meet with the company for a formal presentation along with the rest of the board...
The savvy Board schedules at least one hour to meet with prospective management companies so they can hear specifically how the association will be managed. This is also another opportunity to get to know the person and company you are hiring.
Similar to meeting at the property, many Boards will review written proposals and make a decision based solely on that. It is impossible to make an informed decision without meeting with each company to hear them talk about how they will resolve the particular issues your association is dealing with.
5. They don't call the references...
The savvy Board calls all of the references provided and asks specific questions about scenarios they are facing, to see if that reference can explain how that issue was resolved at their association.
Most Boards ask for references, but never call them. The references have working knowledge of how these management companies work and usually answer very honestly.
6. They don't have a proper method of evaluating the management companies...
The savvy Board has an evaluation form that each Board member fills out throughout the process. This form highlights the important factors for making such a big decision and gives you actionable, easy-to-understand results. It will also help you to be honest with the management companies you didn’t choose. It's also helpful to make sure you provide each management company with the same details about your community.
You meet with them, you meet with them again, and then it’s time for analyzing them. Each Board member chooses a different company for whatever reason and now you have to decide what to do. A consistent, apples-to-apples evaluation method is very helpful.
7. They base their decision on price...
The savvy Board makes their decision by following the results of their management company evaluation form. A great management company is a wise investment in your resident happiness, your property values, and in your budget. Most time a great management company will save you more money than what the extra servicec cost. If price truly is a concern, contact the best management company and ask them what they can do to work within your budget.
We all have to work within a budget, but choosing the lowest price just because it’s the lowest price will cost you more in the long run. The saying is true; you get what you pay for. If you want to put your association through another transition, continue to have poor service, and pass the problems on to the next Board, choose solely on price.
Conclusion:
If you don’t have the time to do it right today, when will you have the time to go back and fix the problem?
Use this list to guide your Board through the management transition process, and take the time to do it right. The results will be well-grounded, and the relationship you build with your new management company will be solid for years to come.
Contact Capital Property Solutions for a Free, Friendly, Property Review, or for new ideas on association management and reducing costs.
Arnold Barzak is a principal partner at Capital Property Solutions, a condominium and homeowners association management company with 25 years of experience in Central Ohio. Arnold has earned his PCAM designation, the highest professional recognition available nationwide to managers who specialize in community association management.
Capital Property Solutions serves the Central Ohio communities of Canal Winchester, Clintonville, Columbus, Delaware, Dublin, Gahanna, Grandview, Grove City, Hilliard, Lewis Center, New Albany, Pickerington, Plain City, Powell, Reynoldsburg, Upper Arlington, Westerville and Worthington.
