PM Contract Suggestions

Rather than write your own contract, make it a request for proposal (RFP) instead, after you consider everything you want the company to do. You can then send it out to various property management companies, let them bid and go from there. At $100 a year, your assessments may not be enough to do everything you want done, plus do regular maintenance of the common areas (whatever that is) and fund reserves, so be prepared to increase them if necessary and be sure to explain to the homeowners why it's necessary.

I wasn't living in my community when it contracted with our current property manager, but I know they went through about 3 or 4, after self management didn't work very well. Our property manager was a medium sized company, but then was taken over by one of the larger HOA property managers in the country (some of you can probably guess who I'm talking about). For the most part, they do a good job, but based on my board member days, I would say that it's important that rule enforcement is written in the contract and you have to be very clear as to what you want them to do.

It's not the property manager's job to enforce the CCRS - that's the job of the board, whether they want to do it or not. The property manager can help with the busy work, such as periodic inspections, mailing out violation notices, forwarding appeal requests to the board (who should schedule those hearings themselves), and making sure there's decent documentation (time and date stamped photos are always good.

Speaking of periodic inspections, I would also recommend a weekly or bi-weekly drive through by the property manager assigned to your community (or a competent designee) to check on the common areas. Before our property management company was taken over, our manager would drive through every week and make note of needed repairs. We're a townhouse community and it's always been amazing to me that people will look at a problem and not pick up the phone and at least call it in, but then turn around and complain why it took so long to get fixed!

In light of all the stories about property management companies that have embezzled from HOAs large and small, you'll need to put some internal controls into the contract to protect the association's assets. Your association attorney can help review that language - actually he or she should review the thing before it's signed to make sure you aren't nit-picked on various charges and there are clear terms regarding termination or extension of the contract, plus what will be done if you do decide to change management companies, so the association's permanent files don't get lost in space.

Adam,

You say that you are a large association (400+) with low dues ($100 a year).

Even if you have 600 lots, your assessment would equate to $6,000 per year.
I don't think that is enough money to cover your insurance requirements, much less hire a contractor to manage the Association for you.

Did you mean $100 per month?

Of course, they'll try to sell you extras (this is a bidness and this is what they do to make money!). That's why people should READ the bids and ask questions about anything they don't understand. Just because they'll try to toss in extras doesn't mean you have to accept them. It does mean you need to review the bid against what you want to make sure everything YOU want is listed. If people start trying to sell you stuff you can't afford or want, say so and if they keep yapping, eliminate them from consideration because they aren't paying attention.

Keeping to my original post, if anyone has any PM contract suggestions let me know!

With such low dues, Adam, it sounds like your HOA has very few amenities, right? How much is your insurance a year? Landscaping? How much do you contribute to reserves a year?

But with so many properties delinquent on their dues, it also sounds like you want enforcement of dues payments. True?

What else do you want? Enforcement of architectural guidelines? Tell us what you want an MC to do.

Hey Barbara, I wasn't looking for specific PM names. I am just wanting verbiage in someone's PM contract that they feel is valuable to have that I'm not thinking of. For example, a poster may state....

"In our contract, we have a provision that allows us to send our PM a period newsletter in which they have 10 days to print, fold, stuff/seal in envelop, address, stamp, and mail out at a predetermined charge of $1.50 per homeowner."

Catch my drift?

I'm sorry. I personally don't like giving signature authority to anyone outside of the Board.

One doesn't have to be on the account to make a deposit to the account.

Preparing checks for signature would be fine, but issuing a check would not be (in my opinion).

I would also strongly recommend that the accounts be kept in a bank of the Associations choosing and under the Associations name and EIN.


Prepping, yes. Sending it out without review? No

Remember, everything your agent (the MC) does on behalf of the Association makes the Association accountable for what was done.


See earlier issue with paying vendors.