Is your HOA board considering hiring an HOA management company? If so, you might not know where to begin or how to look for the best one that suits your needs. Here is how to pick an HOA management company that’s right for your community.
The Right Way to Pick HOA Management Company
An HOA community may need the help of professional management services for a number of reasons. It could stem from a lack of time or a lack of expertise for the board members. It may be because it isn’t working out with your current HOA management company.
Whatever your reason may be, when the time comes for you to select an HOA management company, you must know the proper process. This way, you can pick the HOA management company that fits your qualifications and delivers the best quality services.
1. Form a Dedicated Committee
When you choose management for your HOA, the first thing you must do is form a search committee. While you and your fellow board members can conduct the search yourselves, there’s a good chance you’ll need help from other volunteers as well.
When selecting members of the committee, make sure the candidates have a good grasp of the association and its needs. It’s a good idea to recruit members with areas of expertise like law, finance, and maintenance. However, see to it that some board members join the committee, too. This way, they can liaise between the HOA board and the committee. Doing this also ensures the committee acts within the board’s guidelines.
2. Decide on the Specifics
The next thing you must do to pick an HOA management company is to decide on the bidding specifications. Take a close look at your annual budget to see how much you can allocate for professional HOA management services.
Discuss what level of service your HOA needs. For instance, does your community need an attorney who specializes in association law? Does your tax preparer or accountant need to be certified as a CPA? What other knowledge and skills do you expect to get from the management company? Asking these questions will help you develop your bidding specifications and exactly what you’re looking for in a management company.
You must also decide whether you need a full-service management company or a company that offers skeletal services. A full-service management company has a heavier presence within the association and handles almost all matters concerning the HOA. This means the HOA board isn’t as active. On the other hand, you may want to outsource only a few services, such as financial management or administrative work.
3. Develop and Send Out an RFP
After deciding on your bidding specifications, it’s time to create and send out a request for proposal. This document details everything your HOA is looking for in a management company. This includes how much you expect to pay and any references or credentials worth noting.
The purpose of an RFP is to make all submissions uniform and eliminate bias. This way, you can conduct a fair comparison among all candidates. Include a deadline for submissions so that you’ll receive all proposals in a timely manner.
4. Evaluate Based on Criteria
Developing criteria further eliminates bias in the evaluation process. Decide which aspects of the proposal are more important than others. You can use a point system for this portion.
For example, your HOA might place more importance on the quality of services over their cost. In this case, quality can make up 40% of the entire points whereas the cost can only make up 20%.
Other associations evaluate the services and the fees separately. So, if your association is more concerned about the quality of services, you can evaluate each candidate based on their services alone.
After selecting your finalists, only then will you look at their prices. This way, you can eliminate the candidates with unsatisfactory services first and leave only the ones with exceptional services. From the cream of the crop, you can then decide which one fits your budget the best.
5. Conduct Interviews
After narrowing down your options, conduct a 90-minute interview with your candidates. Having a longer time to talk with the company will reveal their knowledge of HOA management beyond the simple questions you initially prepared.
Ask them about specific processes they use for HOA management needs your board is seeking help with. It will also give each company the chance to detail what they can specifically bring to the table for your HOA that makes them different from any other company.
Conducting an interview allows you to evaluate candidates on a more personal level. It lets you ask questions and get an overall feel of your potential HOA managers that you wouldn’t get through mere proposals. After all, it’s paramount to establish a good working relationship with your HOA manager. If your HOA and manager simply don’t jibe, it can spell disaster down the line.
So, to help you out, here are the best questions to ask HOA management companies:
- How long have you been in business?
- What services do you provide?
- How many employees do you have?
- Do you have an emergency response plan?
- How many associations do you currently manage?
- How successful are the associations you manage?
- What is included in your fee structure?
- How do you stay updated with federal and local laws?
- Are you a member of the Community Associations Institute (CAI)?
- How will you protect association funds?
- Why should we hire you?
The way a company responds to these inquiries can say a lot about their level of expertise and processes put in place for successful management. A company that is thorough and prepared will have good and timely responses to your questions.
6. Take Your Pick and Monitor Closely
Now, it’s time to pick an HOA management company that’s right for your community. Considering you followed the first five steps, the choice should come easy.
You might have a couple of standouts, so take your pick from there. Then, draft an HOA management contract and make sure to have your attorney look over it before signing.
After hiring the company of your choice, make sure to monitor their performance.
A great way to measure up an HOA management company is by confirming how they are affiliated with the Community Associations Institute (CAI), which provides a variety of certifications and accreditations for management companies. Common ones to look for are:
- Professional Community Managers (PCAM)
- Certified Community Manager of Associations (CMCA)
- Accredited Association Management Companies (AAMC)
- Association Management Specialists (AMS)
These types of certifications and accreditations are important to have because it means the HOA management company’s practices are more likely to align with the laws, requirements, and implementation of successful community management.
Search the web and maybe referrals from other HOAs you’ve talked to (if you have them) to help you find companies that have the skills and certifications you would like for your HOA.
The Right HOA Management Company Is a Partner For Life
HOA management isn’t an easy task. It takes a lot of time, effort, and expertise to carry out well. For this reason, many HOA boards choose to find and pick an HOA management company for help. For first-timers, the job might seem difficult. However, with these steps in mind, your HOA board should be able to simplify the process of finding the right HOA management company for your association.
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