Terminating old/hiring new management company

Started by SherrieL • 8 replies • 5428 views

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SherrieL (Colorado)
Posts: 22

Posted:

We are giving notice to our current management company as to their contract, with us, terminating April 31st and our new management company will commence on May 1st. As president I need to notify the current management company asap. What is the most professional way of handeling this situation?
SherrieL

DavidW5 (North Carolina)
Posts: 565

Posted:

What does your contract with the current management company say about notice of termination? Typically contracts will have a provision requiring X days notice for termination without cause and Y days for termination with cause. Under which circumstance are you terminating them?

We changed management companies on January 1, 2012. Our contract required that we give the incumbent company 90 days notice, which we did by certified letter signed by the board president on 9/29/11. In that letter we directed the outgoing company to turn over all records of the association to the new management company, disable the direct deposit collection of assessments following the cycle in December, and to notify all of our banks of the change of management.

It required a great deal of work by the board to insure that this changeover went smoothly. We sent several letters to all homeowners regarding the change and the need to begin sending assessments to the new address beginning in January.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It is VERY important to make note of the original signing date of the contract. You may not be able to randomly select a date. If it was signed in May and it's a 1 year contract...March or April may be the time to give notice. Read the original contract to find out the terms and conditions. The HOA may have grounds to cancel the contract if they didn't meet certain requirements. That contract will guide you on the proper way to discontinue the contract.

Former HOA President

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Provided the old contract is terminating and your contract does not automatically renew (check it), I'd send them a certified mail letter to their office. Frankly, with no deal in place on a new contract - if the deal is expiring - you will receive property management effective the end date.

A bit of info could be helpful, though.

SherrieL (Colorado)
Posts: 22

Posted:

Thanks for the comments. We definitly checked the management contract before we started our search for another company. The initial agreement was November 13th, 2001 with a 1 year expiration of the initial terms. Section 11: Termination Without Cause. Either Manager or the Association may, at any time during the term of this agreement, elect to terminate this agreement upon at least thirty (30) days written notice to the other party. Okay my question is: Is it professional to just send written notice or do I/we need to go in person also?
sherriel

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Sherrie:

I would potentially send it "Certified Return Receipt" so you have proof it was received by the company.

JanetB2 (Colorado)
Posts: 4,219

Posted:

If they have been a somewhat decent company (maybe just changing due to cost difference), I would include a Thank You card/note for their past service. This way you do not burn any bridges for changing back if desired.

JonD1
Posts: 2,350

Posted:

I hope for your sake you have made plans and taken acion to secure documents, account information, records, contracts, contact information, etc. etc. etc. BEFORE you decide to notify the company you plan to terminate.

Not knowing the whys or what fors of your situation sometimes the terminated party does not put turning over records and accounts at the top of their to do list. You will have to notifiy all the service providers of the new MC name and address for billing and invoices.

The more information you have BEFOREHAND the less you might have to request from a party you are no longer doing business with.

You will need the owners contact information to make them aware that CCs should no longer be paid to the current MC.

To sum it up I would make plans to prepare rather than HOPE the replaced company simply does the right thing and all they are asked to do.

Sometimes hurt feelings can cause people to act in funny ways.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Sherrie:

JonD has a good point in that has the association received during the time period copies of all information. Prior to terminating the service make sure all your ducks are lined up and ready for the next company. For myself I would have had copies of all documents the MC already has, but some HOA’s depend on the MC to retain such information and sometimes do not have the same updated information in the HOA files.

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