New Management -Will we regret it?

Did you Board of Directors select the new Management company or was it put to a vote? I am trying to find out if anyone has experienced on "How to select a new Management Company" whether it is done by the Board of Directors or by vote.

PauG: In our community's Declaration document prepared by the Developer, it states that Common Expense Assessments shall be made monthly, on the 'first day of each month'.

You might refer to your official documents for a reference to your common expense assessment fee before you get too 'hot'. However, I agree that the company certainly should have sat down with the Board prior to the letter going out to the residents. The Mgmt. company is to take direction from the Board, not the other way around.
Note, an ongoing cash flow with a monthly assessment (rather than quarterly) is always better in view of keeping abreast of expenses.
Most everyone receives a check at least monthly and should be able to work the assessment fee into expenses being paid out.

You may want to refer also to the mgmt. contract which the Board signed off on. It may state how they collect for assessments as well as some other responsibilities you may not be aware of or in agreement with. Best to make an appt. with the mgmt. company now for the Board to resolve all that they are feeling unsure about and to diffuse any further 'surprises'.

Not in my Condo Association they don't. The property manager is a puppet for the Board. The board can fire the property manager and any employeed (or request another PM), so they are very obedient if they like their job.

Its possible that the management companies software can't handle quarterly payments. This certainly should be in the contract with them. I don't see how the management company can dictate when payments are made. They work for you.

We are a townhouse community. The Board is pretty upset by this letter being sent out without their approval. No discussion was made about how the dues would be collected except for when we met with the management company and told them we collect quarterly. Today is Monday, calls will be made, and I've drafted a letter that will be emailed immediately requesting another letter be sent at their expense, and a meeting be called. They work for us not the other way around.

When interviewing a management company to possibly replace the present one, what questions should be asked, what should we look for?

JC3, following is my response to RobertG on the thread "choosing a new management company".

08/10/2006 9:07 PM Quote Reply
Robert, As you said proposals tend to say similar things with the exception of costs. And since most RFPs do not provide sufficient details on services needed, and are in some manner ignored in bids, variations may be very difficult to normalized for cost comparisons.

I would start with an RFP and from the responses I would select the top 3 companies to interview. I would require interviewing the Agent who would be the managing Agent - not a "salesman". During a 30 minute interview I would start with the Agent giving a 5 minutes introduction to get a feeling for the person who you will have to work with. Then allow up to 15 minutes for Board members to ask questions and about 5 minutes for the Agent to ask questions. The last 5 minutes can be used to finalize any "loose ends". Ask for a copy of their proposed contract which will include the final services you desire and their costs for these.

Some questions to ask a prospective Managing Agent are:
1) How many years have you been a Managing Agent?
2) What is the average timeframe you have remained as the Agent for each of the HOAs you have managed?
3) How many HOAs do you currently manage?
4) What percent of all homeowners accounts are currently delinquent?
5) How many of times have HOAs you manage been involved in litigation for delinquent accounts?
6) Explain in detail how you inspect, document, and handle violations of restriction.
7) How many times have the HOAs you manage been involved in litigation for violation of restrictions?
8) Explain in detail your money handling procedures and your financial reports.
9) Explain my fiduciary duties as a Board member (this or a simialr question should be asked to give you some indication of their knowledge and willingness to provide guidance to the Board on important matters).

Some questions the Agent may ask are:
1) Why do you want to change your Managing Agent?
2) How long has your current Agent managed the HOA?
3) How long has your HOA employed that Management Company?
4) How many units in the HOA?
5) How often are assessments paid?
6) How often do you hold Board meetings and for how long?
7) How often do you want inspection of the HOA?
8) What common areas and amenities does the HOA have?
9) Do you comply with and enforce your controlling documents and laws?

while these questions might very well be good ones, directing someone to ask questions does not give them the sense to distinguish between a good answer and BS. 9) is one that most boards don't even understand, so how do they know if the candidate gives them a completely wrong (but confidently presented) answer? if you were interviewing internet service providers and I told you to ask what specific redundant paths were available at their data center and the delay properties of each, you could ask the question but you'd have no chance of understanding the answer.

My point was that if you don't know what questions to ask, you're better off waiting a month or 2 until you know exactly what you want, because you can't change MCs every 2 months. Making a bad choice because you don't know what you're looking for is more painful than dealing with what you have.

Note that less than a quorum would have to conduct interviews, so its better to have 2 board members interview. You may not want to have the interview in front of your membership, particularly if you're trying to keep the management change quiet. For such interviews, I draw up a bunch of questions and then each board member hands off to the next, making notes and adding questions they want. Then the president and VP do the interview.

When I interview people for ANY position, either at the condo or for my business, I like to make them talk about their last job in detail. Good workers know every detail about their job. If they don't seem to have a complete grasp on all of the issues at their previous job, set them free.