MichaelS56 (Minnesota)
Posts: 885
Posts: 885
Posted:
What process and or criteria is recommended when determining which Property Management company, a Board should select? Please advise.
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Selecting a Property Management Company
Started by MichaelS56 • 14 replies • 365 views
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DavidG45 (Delaware)
Posts: 993
Posts: 993
Posted:
Quote:
Posted By MichaelS56 on 07/07/2022 6:39 AM
What process and or criteria is recommended when determining which Property Management company, a Board should select? Please advise.
What process and or criteria is recommended when determining which Property Management company, a Board should select? Please advise.
I don't have an answer for that, but one suggestion I have is in regards to a common practice they have of including a clause in the annual contract that it will automatically renew unless they are notified 90 days in advance. I would negotiate changing that to, say, 45 days.
Also, include a clause giving the HOA the right to demand new personnel if you are not happy with whoever is assigned to your account.
JohnC46 (South Carolina)
Posts: 14,230
Posts: 14,230
Posted:
Michael
Do an online search but narrow it down such as HOA Management companies, not just Property Management.
Contact other associations and ask for their PM company.
Once you find a company or two, ask them for references for similar size associations.
Do an online search but narrow it down such as HOA Management companies, not just Property Management.
Contact other associations and ask for their PM company.
Once you find a company or two, ask them for references for similar size associations.
SheliaH (Indiana)
Posts: 6,968
Posts: 6,968
Posted:
If you already have a management company, start with reviewing that contract to see what it's supposed to do and then consider how well they do it. Are there services you need but this company doesn't have them or the prices aren't competitive? Be sure to check out your documents as well because the property management company will help the board ensure those services are provided. In some cases it may be easier or cheaper to hire a company to provide specific services, such as bookkeeping.
Others have suggested googling "HOA Management companies" to see who's in your area. You'll need to ask for references and check them. You should also poll homeowners to see what they like or don't like about the current company.
Get bids from at least three companies and have them reviewed by the association attorney to help identify problems. And READ the contract yourself to make sure you understand what they will and won't do.
When you select a company, you'll need to establish a transition plan to .wke sure everything is done properly before the old one exits stage right. Keep the homeowners informed and ask them to be patient as the new company starts the work.
Others have suggested googling "HOA Management companies" to see who's in your area. You'll need to ask for references and check them. You should also poll homeowners to see what they like or don't like about the current company.
Get bids from at least three companies and have them reviewed by the association attorney to help identify problems. And READ the contract yourself to make sure you understand what they will and won't do.
When you select a company, you'll need to establish a transition plan to .wke sure everything is done properly before the old one exits stage right. Keep the homeowners informed and ask them to be patient as the new company starts the work.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
MarkM19 (California)
Posts: 1,455
Posts: 1,455
Posted:
The first question I would ask the OP. Why are you looking to make the change?
1) Is the Management Company not responsive to your boards concerns?
2) Is the Manager not responsive?
3) Is the Back-office staff not doing the Job?
I would never reach out to homeowners and ask what they do not like about the Company. If you have ever checked Yelp or other sources, you can see that they all get terrible reviews from angry owners that may have had issues or received letters or are in collections. Nobody knows more than the actual board members that deal with the PMC on a regular basis. You also need to remember that they are all staffed with workers that have to large of a portfolio of properties and are usually under paid. It is not a very rewarding job most of the time. Burnout is a real thing and turnover is terrible for HOA board members. Our last PMC is one of the biggest in the business and the last year before we fired them, we had 5 PMs after each before either left or was fired by the PMC. What a nightmare.
In the 2 cases that I have been successful in replacing the big company with a smaller well-respected company have worked out perfect. We have had our current company for 3 years with the same PM the entire time and he is Great. At the end of the day the most important person in the company is the guy that handles the everyday details.
1) Is the Management Company not responsive to your boards concerns?
2) Is the Manager not responsive?
3) Is the Back-office staff not doing the Job?
I would never reach out to homeowners and ask what they do not like about the Company. If you have ever checked Yelp or other sources, you can see that they all get terrible reviews from angry owners that may have had issues or received letters or are in collections. Nobody knows more than the actual board members that deal with the PMC on a regular basis. You also need to remember that they are all staffed with workers that have to large of a portfolio of properties and are usually under paid. It is not a very rewarding job most of the time. Burnout is a real thing and turnover is terrible for HOA board members. Our last PMC is one of the biggest in the business and the last year before we fired them, we had 5 PMs after each before either left or was fired by the PMC. What a nightmare.
In the 2 cases that I have been successful in replacing the big company with a smaller well-respected company have worked out perfect. We have had our current company for 3 years with the same PM the entire time and he is Great. At the end of the day the most important person in the company is the guy that handles the everyday details.
JackieB4 (California)
Posts: 399
Posts: 399
Posted:
How can Board discuss changing PMC without current PMC becoming aware?
BillD16 (Texas)
Posts: 980
Posts: 980
Posted:
Our PMC has dropped the ball sooo many times that I believe we’re going to dump them and begin actively looking for a replacement. It’s been suggested before - but “Honestly Doctor, I think we may really crash this time.”
I’ve never been involved in this kind of effort before, but there are a handful of concrete items that I think we’ll be looking for:
- Their availability to handle issues with the pool. The pool gets maximum use on Friday afternoons, weekends, and holidays. Our PMC is closed at those times.
- Related: response time on emergencies.
- How many other properties is our PM going to handle? We’re currently one of ten. That ratio is not proving to be realistic.
- What portal system do they use for ACC, Violations, payments, etc? Our ACC likes the system that our PMC has set up with. Another PMC that uses the same system would be attractive to us.
- Related: what kind of visibility does the Board have into these systems?
- I think we might like to have some kind of formal agreement or system on status reporting. We’ve had too many action items simply disappear. Admittedly, this is partially the Board’s fault. But also, we’re paying the PMC to help us navigate through these issues.
- Related: firm time and date tracking of action items as they come and go.
We might be in for a shock - it might be that we can’t find anyone who meets these requirements within our budget. And the stuff about progress reports and time/date tracking - I may live to regret that: I’ve dealt with some very shabby business service interfaces, we need something that effective but not inflexible, and that may be tough to find. But at least we’ve got a few solid requirements.
Again, this is merely my thinking on how to approach a task I’ve never done before. So, to any future generations reading this: don’t mistake my thoughts for actual experience.
BillD
HOA Board ex-President
Austin, Texas USA
“You can’t put too much water in a nuclear reactor”
Austin, Texas USA
“You can’t put too much water in a nuclear reactor”
BillH10 (Texas)
Posts: 1,216
Posts: 1,216
Posted:
Although I am from California, and served on Boards there, I am not "of" California and have not been for some years--thank you corporate relocation. At any rate, I am not current on California HOA matters.
I cannot imagine any reason why the Board cannot meet without the PM or PMC being present, for just the reason of considering PMC performance and possible termination.
In the association in which we reside, we have held a regular Board meeting, open to all as is required, worked through the agenda, then asked the PM to leave when we reached the agenda item pertaining to the PM or PMC. We have assured the PM the secretary would take appropriate notes including motions, and adjournment time so the meeting record was complete.
I cannot imagine any reason why the Board cannot meet without the PM or PMC being present, for just the reason of considering PMC performance and possible termination.
In the association in which we reside, we have held a regular Board meeting, open to all as is required, worked through the agenda, then asked the PM to leave when we reached the agenda item pertaining to the PM or PMC. We have assured the PM the secretary would take appropriate notes including motions, and adjournment time so the meeting record was complete.
MarkM19 (California)
Posts: 1,455
Posts: 1,455
Posted:
I would schedule and Executive Session to discuss options. Contract negotiating is clearly one of the 4 things that are done in Executive session. I would also keep it quite because you will need several meetings to get this sort of thing done right. I have heard on this Blog that once the Existing PMC starts getting suspicious, they can give you their 30-day notice and then you lose the time needed to prepare. At the same time, you will need to get as much of the paperwork as you possibly can this includes mailing list for your homeowners and past due accounts. Once the PMC gets notice you can expect them to clam up and make things harder on the transition.
I always get a kick when posters think oh well just change the PMC company and everything will be better. You will be hiring a company that knows nearly nothing about your property. They will need help getting up to speed and it can take months. I am not saying it is not worth it in the end because in our case it was 100% worth it.
I always get a kick when posters think oh well just change the PMC company and everything will be better. You will be hiring a company that knows nearly nothing about your property. They will need help getting up to speed and it can take months. I am not saying it is not worth it in the end because in our case it was 100% worth it.
MarkR21
Posts: 146
Posts: 146
Posted:
Do not have contact AUTO RENEW EVERY YEAR force them to make new contract and seek your repeat business
JackieB4 (California)
Posts: 399
Posts: 399
Posted:
Completely agree. thanks
JustinP2
Posts: 5
Posts: 5
Posted:
Having just done this in June:
-Ask for nearby references and contact a board member to find out what their pain points are with the management. Visit the location and see how they look.
-Meet with the agent at their office (see if it's in shambles) and once you narrow it down, ask them to meet again at your location for a quick walkthru.
-Ask for examples of management reports/financial statements. I found they really vary in quality and detail.
-Have them demo their web/management software.
-Find out how they track tasks and ensure timely completion.
-Get a copy of their standard management agreement and know terms are negioabale - we spent about $2800 for attorney review, drafts, and final changes (mostly around insurance reciprocation, financial safeguards/limits, and detailing what deliverables are expected.)
In the end, every company does just about the same thing. It's likely going to come down to the manager you get assigned.
-Ask for nearby references and contact a board member to find out what their pain points are with the management. Visit the location and see how they look.
-Meet with the agent at their office (see if it's in shambles) and once you narrow it down, ask them to meet again at your location for a quick walkthru.
-Ask for examples of management reports/financial statements. I found they really vary in quality and detail.
-Have them demo their web/management software.
-Find out how they track tasks and ensure timely completion.
-Get a copy of their standard management agreement and know terms are negioabale - we spent about $2800 for attorney review, drafts, and final changes (mostly around insurance reciprocation, financial safeguards/limits, and detailing what deliverables are expected.)
In the end, every company does just about the same thing. It's likely going to come down to the manager you get assigned.
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