Changing Management Companies

Lori, Great question and I am soooo ready to hear comments. Agree, there are some basic similarities and change can be scary + costly; HOWEVER, leadership requires making difficult decisions. I would ask other community HOAs DIRECTORS who they use (PMC)? Most homeowners are clueless and not privy to deep issues. Get quotes in PRINT so you can compare the legalese(OMG!!). Ask each possible PMC the same questions and note responses. As a side note, I'd ask HO's to share any/all PM concerns and include them in the interview questions.
Doing NOTHING with an incompetent PMC is worse than regrets.

The annual election is thee main mechanism for owners to have input and control of their fate. Given the blunder above (and other blunders?), is there no "out" clause in the contract? If the MC fouled up things badly enough, would a short consult with the HOA attorney about termination of the MC for failure to comply with the contract be worthwhile?

You're one of the most amazing association directors at hoatalk and probably already know this, but just to cover bases: Did you ask the company you all are interviewing for references?

Here's a few more details of why we want to change. First, we have been on a month to month contract with this company since our original three year contract expired in March of 2022. There was an automatic renewal clause with an escalation, so we are paying the extra amount and all the other terms stayed the same. The management company didn't even get us a new contract until September and it is simply unacceptable - things like ridiculous insurance requirements (our insurance agent said he had never seen such BS) and they want the ability to have all of our funds deposited with them and their bank, but co-mingled with other associations.

On the finance side, they can't or won't answer questions like why it sometimes takes a day for money transfers from Morgan Stanley and other times it takes 10 days.

On the admin side, our PM was in charge of the mailing for the annual meeting. The mailing was supposed to include the agenda for the meeting, agendas for the organization meetings (we actually have a regular association and a stormwater association that handles our lakes and preserves), a ballot, a proxy, two ballot envelopes (one to put the secret ballot in and seal and the other for the sealed ballot envelope with a signature block) and instructions on how to fill things out. The ballot and proxy were both right. Both of the agendas for the organization meetings had the same association on them. They added an additional envelope (one for ballot, one for proxy) and both had mailing addresses for the main office across the state, not our office address. And the instructions were a cartoon drawing that didn't match anything that was in the mailing. The ballot envelope with the signature block had a space for a unit number in a condominium and a short space for which condo association - we are not a condominium. So the envelopes are getting mailed to the address across the state and they don't know what association they are for. We can still have an election - I wrote up a diagram with very explicit instructions and pictures - but why should I have to do that? They are blaming our PM, who is new with their company. She says they made her do it in their software program and she didn't know how and no one was willing to help since it was before Christmas. She didn't give the board the opportunity to look at the mailing before it went.

After this fiasco, I wrote an email to the regional manager and told her I wanted to meet with her, her boss and possibly someone else higher up and I want them to tell me why they want us as clients since they don't seem to care about us. I still haven't heard anything and that was three weeks ago. And they have not followed up on why we haven't signed their contract. They tried to get us to sign our Comcast contract renewal two years early and they wanted to keep 30% of the incentive Comcast is offering. It goes on and on.

We are a community of 825 doors with a mix of condos (three sub-associations), single-family and duplexes with lots of amenities and lakes/preserves. It's pretty complex to run so we have a full-time PM and full-time assistant. The point is, we can't do it ourselves as a board. We need support. I am pretty hands-on and have a lot of business experience. Our treasurer is great and also ran a successful business. Other board members are less involved but contribute in different areas. But I am not going to micro-manage. We pay the PM company to do the bulk of the work and they are just not supporting us like they should.

One of the board members had a good point - we are not going to be here forever. So what if we get a majority on the board with no business experience and they don't have a clue? Our current management company is not supporting our PM so that she can support us. We have to follow our Florida statute in everything we do and I don't feel like we get good advice - the regional manager told us that we should just not solicit proxies so we can't hold the annual meeting to keep the one candidate who we don't want (he's an ex board member who is very difficult) off the board. Not postpone because no quorum - simply don't hold the meeting. The things that keep me up at night are dealing with violations and ARC decisions in the right way and they don't support us well on these.

The prospective PM company seems to have better support all around. They have better (on paper) policies and procedures. The accounts would always be to us by the 20th of the month (right now we never know when they are coming in). Checks would require treasurer and president signature. Right now the treasurer ok's but the PM signs. Everything seems more automated and organize. They claim we will have a transition manager who works with us from the day we sign the contract.

We would like to take our PM with us. It's hard to find a good PM and she was by far the best one that interviewed when we changed 6 months ago. She has over 15 years of CAM experience and is great with the community - just not so good on reports, follow up, etc. I think she's good and could be great with the right supervision and framework.

I appreciate all the input - things to look for in transitions, ways to deal with the old company in transition, etc. Any input is appreciated.

“ On the finance side, they can't or won't answer questions like why it sometimes takes a day for money transfers from Morgan Stanley and other times it takes 10 days. ”

Run away even faster!

Seriously if it were me I would be really concerned.

Lori wrote: "Our current management company is not supporting our PM so that she can support us." When your board interviews MCs, do make sure the topic of their training programs & support for onsite managers is (un)covered.

I retired from our board after 14 years a year ago. We're 2 high rise towers of 200+ units & a commercial aspect with a full-time onsite mgr & mgr. asst. Our current MC has been with us since late '06 and we were their first account in our region. We're on our 8th onsite mgr. They used to provide good candidates, but our current new mgr, hired in July, and our previous mgr. are weaker. They both seem to lack much knowledge of the complicated CA HOA statutes. Worse, they did/d not seem to learn our governing docs even though we were re-writing our CC&Rs & bylaws. Their supervisor doesn't seem to help or train them either.

Our MC also used to hold an annual workshop for the Board, which was partially training and partially updates on legislation. That stopped also. This is a board of 7, but the "commercial director" never attends meetings, etc. Our 6 board members are bright, likable and motivated to improve our community. They, all males within a few years of either side of 70-- bring an interesting mix of professional & occupational backgrounds. BUT they, too have little interest in state law or our documents.

Though we owners get really good communication from our "management team," much of it is simply copied from our docs, or I realized not long ago, are AI generated. Their own writing is pretty poor and neither seems to have a clue about how to summarize long materials.

So watching this untrained group of managers & directors, I'm most concerned, I think, that they will get us in trouble due to general ignorance.

Sorry for the digression, Lori. My point is that I'd seek an MC that has a strong training and cont'. ed component as confirmed by references & what you all learn in interviews. When you interview candidates for your own CAM, I'd want to hear their opinions about training and continuing ed. I think I recently read that Fla. requires only 18 hours (or fewer?) for a CAM credential, which sounds petty scrimpy to me. (Correct me if I'm wrong).

I hope you're able to keep your current CAM too, but your contract with your current MC may prevent it. Our HOA, however, has been able to keep engineers from our old vendor when we've gotten a new vendor. The old vendor simply said sure, keep him.

Your treasurer is right, it is a lot of work. We have an inner city facility with elevators, common facilities, generator, multiple HVAC units, parking management, landscaping, trash handling, package facility, extermination, staff, security. We have to track changes in local law. Some owners rent out, and renters move regularly. Moves are monitored for damage and costly waste disposal.

A couple owners think we should self manage but they're not volunteering. "Won't take you any time at all".

The quality of the change seemed to depend on how well we understood the rhythm of operations, like when do licenses or permits expire, and what are the service schedule, and does local regulation drive some schedule items. Download anything you can. Make sure you have all contracts, inspection results, and financials. There is a lot of operating data transfer. Know where the building systems are and how to connect to them.

We retained no staff because we would have to buy them out from the old MC. We handled the search like any other major business contract. We wrote a detailed RFP, got responses from MCs and evaluated them against the RFP. The analysis also highlighted missing pieces we needed to fill in. A financial model of each finalist and our previous vendor also helped us understand costs.

It took a lot of time. We had to find MCs and contact them. We asked other local boards. We analyzed responses, interviewed, modeled finances, and got references from other boards and friends of owners. We asked a lot of questions about how money is managed, who receives payments, and who pays bills. We carefully negotiated the new contract to fit our needs. You will need to manage the transition, and deal with transition issues afterward. You may have other vendors you have to find. A couple of our contracts terminated on MC transition. Some vendors wanted to be notified directly by the board. There will be surprises. The board may have to redo some filings. Transition stuff settled down about 6 weeks after the new company started.