AnnaJ1 (Maryland)
Posts: 95
Posts: 95
Posted:
Has anyone switched management companies lately? What headaches did you face in doing so? What led to the decision to switch?
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Changing Management Companies
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JackieB4 (California)
Posts: 398
Posts: 398
Posted:
Great question! Should the PMC be local...or does it matter? I await the responses.
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Anna,
It is a good question. I have been a part of 2 boards that changed PMCs. In both cases the PMC was first chosen by the Developer/Declarant. When this is the case, and the owners board takes over it is always time for many reasons. I will list a few below.
1) Their loyalty is always to the developer.
2) They get hired because they put managers in place that works to sell homes.
3) They do not like when newly elected boards tell them how the community should be run, and they do not take direction well.
4) Hire turnover and poorly paid managers.
In both my cases we were fed up with the lack of communication and staff that was in place. The companies also the companies did not care to keep our business.
If you pick the right sized company and they have taken over from the big companies in the past problem should be few and far between. This also really depends on the size of your community and other factors. The biggest issue is every single owner gets effected by this change. Here are a few of the changes.
1) Every owner has to change who gets the dues payments.
2) Many auto payments owners will screw this up no matter how well the PMC tries to communicate.
3) Contact info needs to be given so that the new management gets off to a fast start.
4) Getting the right manager is the key to the transition being successful.
5) Do you have a board or a single board member willing to spend the time to bring your new manager up to speed?
6) The last thing you want is a manager toiling around for a year figuring stuff out. They need help to be productive.
7) The old management company will usually hold back a large sum if funds to pay late bills and this needs to be watched carefully.
Is it worth it? Yes absolutely. I would suggest that you take the time to have interviews with PMCs and make sure you check references. This is a big change and if you make a mistake, it will be the boards fault exclusively.
It is a good question. I have been a part of 2 boards that changed PMCs. In both cases the PMC was first chosen by the Developer/Declarant. When this is the case, and the owners board takes over it is always time for many reasons. I will list a few below.
1) Their loyalty is always to the developer.
2) They get hired because they put managers in place that works to sell homes.
3) They do not like when newly elected boards tell them how the community should be run, and they do not take direction well.
4) Hire turnover and poorly paid managers.
In both my cases we were fed up with the lack of communication and staff that was in place. The companies also the companies did not care to keep our business.
If you pick the right sized company and they have taken over from the big companies in the past problem should be few and far between. This also really depends on the size of your community and other factors. The biggest issue is every single owner gets effected by this change. Here are a few of the changes.
1) Every owner has to change who gets the dues payments.
2) Many auto payments owners will screw this up no matter how well the PMC tries to communicate.
3) Contact info needs to be given so that the new management gets off to a fast start.
4) Getting the right manager is the key to the transition being successful.
5) Do you have a board or a single board member willing to spend the time to bring your new manager up to speed?
6) The last thing you want is a manager toiling around for a year figuring stuff out. They need help to be productive.
7) The old management company will usually hold back a large sum if funds to pay late bills and this needs to be watched carefully.
Is it worth it? Yes absolutely. I would suggest that you take the time to have interviews with PMCs and make sure you check references. This is a big change and if you make a mistake, it will be the boards fault exclusively.
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
The management company running the community after I moved in was sold to a national company. I won't name names, but you've probably heard of it. For the most part, things have gone well. We've had two managers since the takeover and all of them were oriented by the outgoing manager.
For you, I'd start with the last question - why do you want to make the change? One reason may be the expense, so review your contract to see what you're paying for. Are there services you rarely use that could be eliminated? Could you find a vendor that can do certain tasks for less? For example, we found it was expensive to have our manager do "handyman" tasks, so we hired a man who originally did the work in emergencies. He worked on an as-needed basis, with us giving him a list of things to do and he'd come out and get them done in a day or two.
If you have a quality of work issue, sit down with the manager and have a discussion, possibly with his or her supervisor, if appropriate. If homeowners have complained about things like follow-up, the manager could be careless or a bit unorganized, but you may have homeowners with unrealistic expectations. You're not always going to get a callback as soon as you hang up or a reply shortly after hitting "send" on your email. Be sure to listen as much, if not more, than you talk. Some boards don't want to admit THEY may be the problem, with micromanaging or asking the property manager to do something that's illegal or against the documents.
Many property managers have more than one community, especially if you have a national company, so that may explain a slowdown in responses. You could discuss expectations - at a minimum, I think it's fair to expect an acknowledgement of an email receivec within 24 hours, and a phone call within 3 days.
Sometimes people get upset because the property manager is asked about things that should be addressed by the board. If that's the case, it's the board's responsibility to tell homeowners what type of issues should be referred to it vs. the property manager. An annual reminder of this can be helpful, as well as posting it on a community website.
Hopefully, you've done a poll to see what sort of concerns homeowners have (we'd ask homeowners about this every year in a poll to evaluate the board and manager's performance as well as emerging issues) the poll can help you identify trends - or if it's only one or a handful of people complaining. They may have had one bad experience or they're chronic complainers you already know about.
Anyway, if there are serious concerns, give the manager a chance to fix the problem, perhaps with a performance improvement plan. If you don't see a change within 6 months, you can consider your next move. It could be as simple as asking a large company to reassign another manager. If that happens, another conversation will be necessary to discuss expectations and how to prevent problems going forward.
If you decide a change is necessary, have your association attorney review the contract to see what it says about termination of services. Usually you can do it at the end of the service period, but if you want to do it sooner, you need to know the process and if that'll cost you money.
Get at least three RFPs and check references. Look for current or former clients whose communities are similar to yours to see what they like and don't like - and why they no longer use that company (it's not always someone's fault). Make sure your attorney reviews all contracts - all board members should do the same. If you have a finalist, it may be a good idea to have a homeowner meeting where they can ask questions on what the expectations should be.
You will also need to create a transition plan that gives you and tbe manager time to turn over records, notify your band and regular vendors of tbe upcoming change. Homeowners should be told when all this will occur because there may be a one or two week delay before the new manager is ready to assume services.
The community association institute (CAI) website has several educational materials on working with property managers, including tips on preparing a transition plan and things you may want to consider with your new company. Make sure all board members review the information. There are also old conversations you can review on this website to get some ideas on what to do (or not). Bring any questions to this conversation, not the old ones so you'll get current information. Good luck!
For you, I'd start with the last question - why do you want to make the change? One reason may be the expense, so review your contract to see what you're paying for. Are there services you rarely use that could be eliminated? Could you find a vendor that can do certain tasks for less? For example, we found it was expensive to have our manager do "handyman" tasks, so we hired a man who originally did the work in emergencies. He worked on an as-needed basis, with us giving him a list of things to do and he'd come out and get them done in a day or two.
If you have a quality of work issue, sit down with the manager and have a discussion, possibly with his or her supervisor, if appropriate. If homeowners have complained about things like follow-up, the manager could be careless or a bit unorganized, but you may have homeowners with unrealistic expectations. You're not always going to get a callback as soon as you hang up or a reply shortly after hitting "send" on your email. Be sure to listen as much, if not more, than you talk. Some boards don't want to admit THEY may be the problem, with micromanaging or asking the property manager to do something that's illegal or against the documents.
Many property managers have more than one community, especially if you have a national company, so that may explain a slowdown in responses. You could discuss expectations - at a minimum, I think it's fair to expect an acknowledgement of an email receivec within 24 hours, and a phone call within 3 days.
Sometimes people get upset because the property manager is asked about things that should be addressed by the board. If that's the case, it's the board's responsibility to tell homeowners what type of issues should be referred to it vs. the property manager. An annual reminder of this can be helpful, as well as posting it on a community website.
Hopefully, you've done a poll to see what sort of concerns homeowners have (we'd ask homeowners about this every year in a poll to evaluate the board and manager's performance as well as emerging issues) the poll can help you identify trends - or if it's only one or a handful of people complaining. They may have had one bad experience or they're chronic complainers you already know about.
Anyway, if there are serious concerns, give the manager a chance to fix the problem, perhaps with a performance improvement plan. If you don't see a change within 6 months, you can consider your next move. It could be as simple as asking a large company to reassign another manager. If that happens, another conversation will be necessary to discuss expectations and how to prevent problems going forward.
If you decide a change is necessary, have your association attorney review the contract to see what it says about termination of services. Usually you can do it at the end of the service period, but if you want to do it sooner, you need to know the process and if that'll cost you money.
Get at least three RFPs and check references. Look for current or former clients whose communities are similar to yours to see what they like and don't like - and why they no longer use that company (it's not always someone's fault). Make sure your attorney reviews all contracts - all board members should do the same. If you have a finalist, it may be a good idea to have a homeowner meeting where they can ask questions on what the expectations should be.
You will also need to create a transition plan that gives you and tbe manager time to turn over records, notify your band and regular vendors of tbe upcoming change. Homeowners should be told when all this will occur because there may be a one or two week delay before the new manager is ready to assume services.
The community association institute (CAI) website has several educational materials on working with property managers, including tips on preparing a transition plan and things you may want to consider with your new company. Make sure all board members review the information. There are also old conversations you can review on this website to get some ideas on what to do (or not). Bring any questions to this conversation, not the old ones so you'll get current information. Good luck!
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
It's possible our HOA Board is changing management companies next week. Not having been a director for 2 years, I won't know until Tuesday. The last time we changed was about a month before I was elected to the board I at the end of '06. At that time the reason was a "start-up" firm had managed us for year of so and was a disaster in every sense of the word.
Our current firm was recommended by our large developer's VP-of-something who, as required by our Bylaws--they own about 5% of our HOA-- sits on our Board of 7. The MC seems to have become sloppy over the past few years. We've had a new full-time onsite PM for over year now and he still know very little bout our governing docs or CA HOA statutes. His full-time onsite asst.mgr. is similarly ignorant though sh's been with us for 2-1/2 years. So in my opinion. the MC has slipped badly in it straining of local PMs.
(in the mgmt staff's defense, their protection, maintenance & enhancement of our common areas--any HOA's primary job-- has been quite good.)
Shelia & MarkM offer good insights. This may sound trivial, but off & on over the years we've had quite a few committees thus committee members. Certain members just seem to barge into the manger's office about trivial things related to their committee. Anything related to committees should be handled only at committee meetings, which should occur once a month. There should be guidelines for all committees that include that only committee chairs may meet with the PM. And only the board president may. The latter is in our contract with our MC.
I'm thinking that the board should require that their onside manager have some sort of management credentials. Maybe others will disagree. I do think minimal mgmt. instruction is required in FL.
Our current firm was recommended by our large developer's VP-of-something who, as required by our Bylaws--they own about 5% of our HOA-- sits on our Board of 7. The MC seems to have become sloppy over the past few years. We've had a new full-time onsite PM for over year now and he still know very little bout our governing docs or CA HOA statutes. His full-time onsite asst.mgr. is similarly ignorant though sh's been with us for 2-1/2 years. So in my opinion. the MC has slipped badly in it straining of local PMs.
(in the mgmt staff's defense, their protection, maintenance & enhancement of our common areas--any HOA's primary job-- has been quite good.)
Shelia & MarkM offer good insights. This may sound trivial, but off & on over the years we've had quite a few committees thus committee members. Certain members just seem to barge into the manger's office about trivial things related to their committee. Anything related to committees should be handled only at committee meetings, which should occur once a month. There should be guidelines for all committees that include that only committee chairs may meet with the PM. And only the board president may. The latter is in our contract with our MC.
I'm thinking that the board should require that their onside manager have some sort of management credentials. Maybe others will disagree. I do think minimal mgmt. instruction is required in FL.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Anna
Before changing MC's one should sit down with them and see if the issues can be worked out. Much easier and maybe less expensive to do so.
Before changing MC's one should sit down with them and see if the issues can be worked out. Much easier and maybe less expensive to do so.
NA1 (Massachusetts)
Posts: 190
Posts: 190
Posted:
We found putting together a RFP outlining scope, service expectations, challenges was very useful in getting targeted proposals.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
RFP = Request for Proposal
A good RFP should include info on your Association (number of lots/units, location, % of new owners per year, etc.) along with specifics of what the board is looking for (services, etc.) in a management company.
A good RFP should include info on your Association (number of lots/units, location, % of new owners per year, etc.) along with specifics of what the board is looking for (services, etc.) in a management company.
LoriM15 (Florida)
Posts: 1,009
Posts: 1,009
Posted:
We changed management companies May 1 of this year. Although we know it is ultimately the right decision, the transition was not easy. We are a large, fairly complicated HOA so that may be different from your situation. But you have to be prepared for a little bit of chaos.
1) Financials are not transferred quickly. Your records will probably not be completely correct for at least three months, if not longer.
2) You will have lots of people making payments to the wrong place, since there will be new bank accounts opened for the association and all those auto-payments have to be changed. So your number of delinquent accounts will be very high. This can affect your cash flow if you don't have money in contingency or reserve.
3) You will most likely have new employees. If you are lucky, you will be able to interview your new employees. If not, you may be stuck with someone who does a bad job or the board has trouble working with.
4) Expect everything that needs to get done (maintenance, compliance) to take a much longer time. The new PM has to have time to get up to speed.
We are just now settling into normalcy.
We interviewed the company we chose, knowing what we didn't like about the old company. They promised many things they haven't quite delivered, but overall we are very happy with them. We found all the companies are competitive in price, so for us it wasn't about cost savings - it was about the quality of the work of both our old PM staff and the accounting.
This is not an issue to take lightly or be done quickly. From my experience, if you don't have a very engaged, hands on board then it could be a pretty rough experience.
1) Financials are not transferred quickly. Your records will probably not be completely correct for at least three months, if not longer.
2) You will have lots of people making payments to the wrong place, since there will be new bank accounts opened for the association and all those auto-payments have to be changed. So your number of delinquent accounts will be very high. This can affect your cash flow if you don't have money in contingency or reserve.
3) You will most likely have new employees. If you are lucky, you will be able to interview your new employees. If not, you may be stuck with someone who does a bad job or the board has trouble working with.
4) Expect everything that needs to get done (maintenance, compliance) to take a much longer time. The new PM has to have time to get up to speed.
We are just now settling into normalcy.
We interviewed the company we chose, knowing what we didn't like about the old company. They promised many things they haven't quite delivered, but overall we are very happy with them. We found all the companies are competitive in price, so for us it wasn't about cost savings - it was about the quality of the work of both our old PM staff and the accounting.
This is not an issue to take lightly or be done quickly. From my experience, if you don't have a very engaged, hands on board then it could be a pretty rough experience.
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
LoriM15,
This is a great addition and I second all of your comments.
This is a great addition and I second all of your comments.
JackieB4 (California)
Posts: 398
Posts: 398
Posted:
LoriM15, excellent advice. Sharing your current "hands-on" experience is priceless.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
In your RFPs do make it clear that the Board wants to interrview prospective PMs, especially it you need one full-time onsite. Our last new MC was the end of '06 and the new MC did a national search for our compicated twin high rises with multiple budgets and reserves studies. The MC hired some hot shot from NYC with high rise experience. What a disaster. He had no understanding g of open meetings nor of CA Civ. Code about HOAs.
He spoke flawless French. He bragged about the women he bedded. He had a closed-door office policy. I'm unhappy with our current PM, and we may have a change coming. But that first one was our worst over about 7 PMs since he, um, "resigned."
He spoke flawless French. He bragged about the women he bedded. He had a closed-door office policy. I'm unhappy with our current PM, and we may have a change coming. But that first one was our worst over about 7 PMs since he, um, "resigned."
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Our Board announced at a special meeting today that it will hire a new Management Company eff. 2//24. At this time, I don't know if the Board wants to keep our current PM & his asst., who just made an immense error yesterday that went out to the whole world on our public website, & who have several flaws. I had to literally screech a text to our president to delete part of of the message ASAP.
But he is good at maintenance/infrastructure. I'm going to print the above to refer to in the next several weeks! Thanks to all.
But he is good at maintenance/infrastructure. I'm going to print the above to refer to in the next several weeks! Thanks to all.
LoriM15 (Florida)
Posts: 1,009
Posts: 1,009
Posted:
Quote:
Posted By KerryL1 on 11/14/2023 6:52 PM
Our Board announced at a special meeting today that it will hire a new Management Company eff. 2//24. At this time, I don't know if the Board wants to keep our current PM & his asst., who just made an immense error yesterday that went out to the whole world on our public website, & who have several flaws. I had to literally screech a text to our president to delete part of of the message ASAP.
But he is good at maintenance/infrastructure. I'm going to print the above to refer to in the next several weeks! Thanks to all.
Our Board announced at a special meeting today that it will hire a new Management Company eff. 2//24. At this time, I don't know if the Board wants to keep our current PM & his asst., who just made an immense error yesterday that went out to the whole world on our public website, & who have several flaws. I had to literally screech a text to our president to delete part of of the message ASAP.
But he is good at maintenance/infrastructure. I'm going to print the above to refer to in the next several weeks! Thanks to all.
If you remember our situation, we were prohibited from keeping our old PM and assistant when we changed management companies. They both had non-competes and even though we offered to buy out their contracts, their company refused to let them go.
However, for us it was a blessing in disguise. We discovered after she left that our old PM was not doing anything but the minimum on her job. We had cut her slack because of a series of bad events in her life (major hurricane damage to her house, car accidents, family illnesses, etc.) You don't know what you don't know. Our new PM and assistant are the most professional and competent employees we have had in over 20 years at the association.
Sometimes it's better to start fresh -
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
I do remember, Lori, that your HOA'd wanted to keep the PM & Asst. Our contract with our current MC has the same language. I hope that they decide they want to keep both the PM & Asst.
After I wrote my last post on this thread yesterday, I received via US mail the required 2024 annual budget, reserves summaries, policy statements, etc. 30 page package. GAH! Most owners here have signed a statement saying they're happy to receive these via email, which we did a few days ago. I signed such a statement years ago. The problem is the PM/asst. do not know CA Civil Code on this topic.
I don't know how much 200+ such packages cost to mail and in some ways it's a small amount. But this kind of error happens way too often and makes me crazy. I feel like I want our current MC to reimburse us for this ridiculous mistake.
After I wrote my last post on this thread yesterday, I received via US mail the required 2024 annual budget, reserves summaries, policy statements, etc. 30 page package. GAH! Most owners here have signed a statement saying they're happy to receive these via email, which we did a few days ago. I signed such a statement years ago. The problem is the PM/asst. do not know CA Civil Code on this topic.
I don't know how much 200+ such packages cost to mail and in some ways it's a small amount. But this kind of error happens way too often and makes me crazy. I feel like I want our current MC to reimburse us for this ridiculous mistake.
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