Are you having problems with your HOA management company? If the board has decided that your current management is not cutting it, you might be wondering about the next step. Learn how to change HOA management company below.
A Guide on How to Change Your HOA Management Company
There are many benefits to having an HOA management company by your side. What does a management company do for an HOA?
An HOA management company usually helps the board carry out day-to-day tasks that keep the community running. This can include collecting assessments, communicating with homeowners, keeping track of service requests, and so on.
Does an HOA need a management company? It depends. Some associations can manage without them, though those are typically smaller ones that consist of only a few units. Although it’s entirely possible to manage your own HOA with the use of self-managed HOA software, a majority of HOAs do require professional help.
While there are many companies that do a fantastic job of helping run HOA communities, there are some that don’t measure up. If the thought, “How do I get rid of HOA management company?” has ever crossed your mind, then there’s a good chance that it’s time for a change.
Can you change an HOA management company, though? Of course, you can. Once you have made the decision to switch HOA management companies, you need to make sure to make the process as professional as possible.
Here’s how to get rid of an HOA management company the right way:
1. Check Your Management Contract and Obtain Counsel
How do I change my management company? That’s a question many HOA board members ask. The first step, though, is to refer to your management contract. This legal document will usually contain details for how to proceed with changing HOA property management companies.
If your contract is due to expire soon, then you can start shopping for a new company without much trouble. If it’s set to renew, make sure to cancel it before the deadline.
But, if you want to end your contract early, you need to check the termination clause. A standard contract will have a termination policy included.
Most contracts specify the amount of time you have to give the company notice of your intent to terminate. Some contracts require a 30-day written notice, while others require a 60-day or 90-day written notice.
You should also check whether the timing is considered from the contract’s effective date. This way, you can send your notice on time.
When learning how to remove an HOA management company, keep in mind that there may be fines and other procedures involved if you’re terminating the services of your management company ahead of the contract’s end date. It’s best to have an attorney go over the contract with you.
2. Assemble a Search Committee
You need new HOA management to replace the old one, and this is where a search committee will come in handy. The search committee will be responsible for gathering information, requesting proposals, interviewing prospects, and reviewing the bids.
The committee will take all considerations into account before giving its recommendations to the HOA board.
3. Evaluate Your Needs
The next step is to assess your association’s needs. What are you searching for in an HOA management company? It’s important to be specific here, especially when it comes to the services you require and the qualifications you’re looking for.
Additionally, you should consider your budget. Perhaps you only have a set amount to spare for new management or can’t go beyond a certain price. Since management fees are directly tied to the extent of the services, you might need to scale back on the latter if you want to pay a lower fee.
4. Review the Bids
Once you receive their proposals, you can then proceed to review the bids. Compare each company’s fee structure with the services they offer. Remember that cheaper isn’t always better. A company may charge a low fee but provide you with low-quality services.
Another thing worth considering is the size of the management company you want to work with. Larger companies tend to have more resources at their disposal, but they also usually have more clients. Smaller companies, on the other hand, can usually focus more on your community since they tend to manage fewer communities.
5. Check Credentials and References
The best HOA management companies are licensed and insured, so it’s worth verifying these items when reviewing prospects. You should also contact each company’s references personally. Talking to their past or current clients can give you a better understanding of what to expect.
6. Interview Final Candidates
Once you’ve whittled down your options to a manageable number, schedule interviews with them. Meeting your potential HOA managers in-person is a great way to gauge their personalities. Keep in mind that you’ll be working with your manager for a long time, so it’s critical that your personalities don’t clash.
Setting up an interview also gives you the opportunity to ask important questions. Ask them about their fees, how they handle specific problems and their customer support process. You don’t want to experience the same problems with your new company, so this is a good time to address those as well.
7. Decide on a New Company
Although the search committee is in charge of the search process, the final say will still come from the HOA board. The committee can make a recommendation to the board after evaluating everything.
Sometimes, the board will take it as is. Other times, though, the board may want to conduct a final interview with the prospects. The board should then vote on the termination of the existing contract as well as the hiring of the new HOA management company.
8. Inform All Parties and Restrict Access
When making the switch, it’s not enough to know how to fire an HOA management company — you must also deal with the aftermath.
First, you must inform your community members, personnel or staff, and vendors of the change. This is because they also regularly interact with the HOA management company. If they are aware of the change, they can already limit interaction and stop doing business transactions with the company.
It’s also highly likely that the HOA management company had access to your association’s bank accounts, financial documents, passwords, and so on. As a precaution, the board should restrict their access or make the necessary changes to protect the association’s data.
9. Ensure a Smooth Transition
The current management company should help facilitate a smooth transition to the new management company. They should put together the necessary files and documents as well as assist with any problems.
The transition might be tricky or generally uncomfortable, which a natural concern that many HOAs have. But, more often than not, management companies and managers do maintain a professional tone even when helping transition to new management.
Signs You Need to Change HOA Management
Your HOA management company may have been excellent in the beginning, but if you’re noticing a decline in quality of service or an uptick in HOA-related problems, it might be time to make some changes. Here are five signs that it’s time to switch HOA management companies.
1. Poor Communication
Maintaining an open line of communication is essential to the success of an association. This is one of the main responsibilities of your HOA management company.
However, if your manager is not responding to calls, emails, and other correspondence, it may be time to change HOA management companies. You want an HOA manager that responds to calls and emails within a reasonable time frame — ideally within 24 hours.
Communication is also important when it comes to HOA rule enforcement. If your HOA management company does not follow up on homeowner complaints and send violation letters, it might lead to larger problems for the association later. In this case, you may want to consider switching HOA management companies.
2. Inability to Complete Projects or a Lack of Follow-Through
Board members also come to rely on HOA management to deal with maintenance projects such as repairing water leaks and replacing street lights. Since these are urgent matters, you want an HOA management company that can attend to these issues promptly. If they are not up to the task, the association will not see any progress.
Moreover, if you have an HOA management company that lacks follow-through, it might be time to make the switch. You want an HOA management company that has strategic planning skills and a proactive attitude when dealing with community issues or projects.
3. Lack of Financial Accountability and Transparency
Financial management is one of the most difficult parts of running an association, so board members come to rely on the financial expertise of their HOA management company. You need to be able to trust them when it comes to tasks like accounting, bookkeeping, budgeting, collections, vendor payments, and so on.
If your current HOA management company does not have financial accountability or transparency, it’s time to reevaluate.
A good HOA management company will have your financial reports and documents readily available. They should also be able to guide the board when it comes to financial decisions and business processes.
4. High Turnover Rates for Managers
It’s one thing to fire HOA managers because of negligence or problematic behavior. However, if there is no problem with the HOA manager, but the association is still seeing a high turnover rate, it might indicate more serious problems with your current HOA management company.
A high turnover rate for managers can also affect your association’s efficiency and productivity. It takes time for a new HOA manager to get to know your community, the residents, and how it functions. So, if you are constantly getting new managers in the span of a few months or a year, it might be time to change HOA management.
5. Outdated Processes and Technologies
As an HOA board member, you want a management company that is able to adapt to the latest technologies. For your HOA to keep up with the times, you need to have the tools and resources that will boost your efficiency and productivity.
For instance, social media platforms, messaging services, and video conferencing are new communication channels that can positively impact your association.
So, if your HOA management company is still using outdated processes and technologies, you might want to consider making the switch.
The Key to Continued Success
The relationship between the HOA management company and the board is crucial to the success of the community. So, if you have an HOA manager that is not meeting expectations, it’s time to reevaluate your contract.
Not everyone knows how to change an HOA management company, but you can make the process easier by following the steps above. Once you change HOA management, the board will be able to pursue a company that is more responsive to the needs of your community.
Begin your search for your next HOA management company with HOA Management. Our online directory allows you to find management companies and vendor services according to your location.
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