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StaceyP (Utah)
Posts: 15
Posted:
My association in Utah has been around for about 9 years. We have had the same management company since the beginning, having 3 different managers during that time. We have 88 town homes and the HOA dues are $150/month soon to go up to $165. The management fees are $12,000+ a year. We have very limited community involvement, unless of course you close the pool to early in the year and then there is an angry mob that appears at the monthly meeting.

There has never been a review of the contract of this management company (MC). They were hired on by the builders of the community and we have stayed with them ever since. When I was on the board and was president it was like pulling teeth to get a copy of the contract that we had with them. For the two years I was president i never signed a renewal for their contract even though i kept demanding copies of the contract. It seems that the contract just automatically renews.

Due to several issues we had with the management company I tried to get my fellow board members to sit down to discuss putting out an RFP to see what other companies would charge us. Well, one board member thought I was being "sneaky' and informed the management company what I was doing (she copied them on a chain of emails were we were discussing the issues). Needless to say, the RFP never happened, I am off the board (but thankfully so is the other member who threw me under the bus).

The issues with the MC range from not responding to emails or calls/complaints from residents, to lack of response to emergency calls, lack of follow through on maintenance issues, showing favoritism to board members on issues over regular community members, even something so simple as failing to keep the community website updated with basic information etc.

So my questions are:
is their yearly fee reasonable?
What are some ideas to "encourage" the board to put out an RFP?
How often should a review of the MC, and other vendors, be done?

TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By StaceyP on 03/04/2014 3:47 PM

So my questions are:
is their yearly fee reasonable?

Since every Association is different (size, style, amenities, etc.) and level of MC services can vary (accounting, record keeping, website management, enforcement, etc.) that question isn't one that can really be answered.

The only way to know for sure is to request bids and compare apples to apples.

Quote:
Posted By StaceyP on 03/04/2014 3:47 PM

So my questions are:
What are some ideas to "encourage" the board to put out an RFP?

1) Volunteer to serve on the Board so you are part of the decision process.

2) Offer to do the work of gathering bids, researching references, etc. for the Board and then allow the Board to make the actual decision.

3) Gather support and vote the individuals out and then replace them with those who will seek new contracts.

4) Complain that it's the Board's fiduciary duty to always solicit bids to make sure that the Association is getting the best value for the money being spent (note: value does not mean least expensive).

Quote:
Posted By StaceyP on 03/04/2014 3:47 PM

So my questions are:
How often should a review of the MC, and other vendors, be done?

In my opinion, 6 - 8 months prior to the end of the contract.
KellyM3 (North Carolina)
Posts: 2,239
Posted:

Not sure of Utah's pricing, but condo management contracts in North Carolina generally run about $12 per unit per month as it's a very active form of management. Obviously, every market is different.

As an investor, you must ask. It's not being sneaky to get bids and it doesn't matter if a board member wants to be sneaky.

I wouldn't bother with a management company review until given a reason (service or pricing) to do so. Same w/ other vendors.

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