Changing management companies

My community had just changed to our current management company when I moved in, and for the most part, things seemed to go pretty well. This after being self-managed and then going through two or three companies. I think part of the problem was that the board and probably the homeowners in general, didn't have a complete understanding as to what the management company was supposed to do and would demand everything. Of course, some of that wasn't in the contract and then people would complain it cost too much or ask why the company didn't do whatever anyway. Several years later, after I'd joined the board, I happened to talk to a property manager at a CAI exhibit, who remembered my community - apparently, the folks on the board at that time were REALLY hard to deal with.

It sounds like you have things well in hand, thanks to your board colleagues. At this point, I think you need to be clear on what you want in a property manager, meaning all of you need to review the bids vs. the current contract, vs. your documents. You want to make sure you get the biggest bang for your buck but need to understand, the property manager works at the board's direction. Don't demand the property manager do things the board is responsible for. The property manager should also know to stay in his/her lane - it's ok to offer an opinion and a recommendation, but after that, shut up and let the board do its job. In some cases, that may mean gently but firmly reminding them X is their responsibility.

If you decide to make a change, I think it'll be vital to prepare a punch list of what needs to be done before company one takes over company two (if you change providers). You can get your attorney to work with you on making sure you understand the contract. Reading and understanding contracts isn't the strong suit of some board members, which is why such transactions tend to go left. Once you get that list prepared, be sure the board is keeping track of what's being done and when - set some deadlines to ensure it's complete. This would be a great project for the rest of the board, considering two of them have already done a lot of work in getting the bids.

Oh, and make sure you keep the homeowners in the loop. They need to know when things begin and end, and they also need to be patient if you change to a new company, as there are always a few hiccups along the way.

Was going to add, I have a policy at my company, I start looking for new blood at a cheaper price after 5 years.

TammiT,
I have a slightly different view than those above have stated. I have to make some assumptions because we did not get a few details. IF you are a new development and are a Homeowner controlled board now I would say it is time to change PMCs. The developer always hires the largest PMC in the area. This is typically one of a few companies and they are used to working with the developer and really are not well suited for Homeowner boards. In my last 2 HOAs we left those PMCs and hired companies that work well with HOs boards. Change is never perfect and your next PMC will not be either. They all have faults and it really comes down to the person who manages your community. I can only assume that you are getting 20 hours a week or more of onsite management. That is what we have and my community is slightly smaller than yours at 1450+ homes.

Some things to watch out for in the new contract.

1) What are the Transfer Fees on home sales and Refis?
2) What do they charge on late fees from homeowners? Is it more or less than the last company?
3) Do they have more or less tools for both HOs and the Board?
4) Do they have back office support for your community?
5) Compare Fees schedules from current and new PMC for all the extras.

Remember change effects every homeowner and you can expect some people who do not pay attention to miss the banking change. We made sure that our New PMC would waive 1 or 2 late fees. They need to communicate with as many types of media as they have.

You also need to be aware that when a new Company comes in to your community they are a white slate. They have very little knowledge of anything in your HOA. Who is going to get them up to speed on all of the projects? Who is going to give them a list of the things that are in progress and future projects. This is a vital part of this change because without this they will have to learn as they go.

Change can be if it is done right.

Hi,

What is the main reason for wanting to change management companies? Was the board happy with their work? What might the new company be able to offer that the current company cannot?

I completely understand wanting to explore your options, but if you are happy with your current company and the fees that they charge are competitive, it might be better not to make the switch.

Please ask about communication. How does the company communicate with owners, Board members, vendors. How timely and professional are their communications. Does the company offer training for Board members? How does the company handle budgets both Operating and Replacement Reserve. What services does the company offer in assisting with Rules and Regulations, and Governing documents. Is the company experienced in handling an association the size of yours? What is their involvement at a Board meeting or at an annual meeting? Questions similar to these will allow to begin to learn about the workings of the company.

P.S. The are websites that will also offer advice in the steps to change management companies.