interviewing new management company

One more time:

RogerB (Colorado)
09/04/2008 4:29 PM Quote Reply
Marianne, You may want search and read previous threads on this subject. Following is one of my replies:

08/10/2006 9:07 PM Quote Reply
Robert, As you said proposals tend to say similar things with the exception of costs. And since most RFPs do not provide sufficient details on services needed, and are in some manner ignored in bids, variations may be very difficult to normalized for cost comparisons.

I would start with an RFP and from the responses I would select the top 3 companies to interview. I would require interviewing the Agent who would be the managing Agent - not a "salesman". During a 30 minute interview I would start with the Agent giving a 5 minutes introduction to get a feeling for the person who you will have to work with. Then allow up to 15 minutes for Board members to ask questions and about 5 minutes for the Agent to ask questions. The last 5 minutes can be used to finalize any "loose ends". Ask for a copy of their proposed contract which will include the final services you desire and their costs for these.

Some questions to ask a prospective Managing Agent are:
1) How many years have you been a Managing Agent?
2) What is the average timeframe you have remained as the Agent for each of the HOAs you have managed?
3) How many HOAs do you currently manage?
4) What percent of all homeowners accounts are currently delinquent?
5) How many of times have HOAs you manage been involved in litigation for delinquent accounts?
6) Explain in detail how you inspect, document, and handle violations of restriction.
7) How many times have the HOAs you manage been involved in litigation for violation of restrictions?
8) Explain in detail your money handling procedures and your financial reports.
9) Explain my fiduciary duties as a Board member (this or a simialr question should be asked to give you some indication of their knowledge and willingness to provide guidance to the Board on important matters).

Some questions the Agent may ask are:
1) Why do you want to change your Managing Agent?
2) How long has your current Agent managed the HOA?
3) How long has your HOA employed that Management Company?
4) How many units in the HOA?
5) How often are assessments paid?
6) How often do you hold Board meetings and for how long?
7) How often do you want inspection of the HOA?
8) What common areas and amenities does the HOA have?
9) Do you comply with and enforce your controlling documents and laws?

Roger,

In theory all you say sounds good but unless the management company is provided your list prior to the interview I doubt they will have the answers. I also doubt they will go back and get answers to most of the questions. But maybe in Colorado management companies are a lot more educated or desparate than in Florida. Ditto the board being able to answer many of the questions you cite since boards change so often. Basic questions can probably be answered but not in the detail you recommend.

My thinking is to decide what you want of a management company, see what they will charge and speak to other hoas they manage. Most management companies have their contract written by an attorney for their protection. I'd suggest reading their contract prior to the meeting and make sure it protects the hoa as well.

Ellen,
As I stated the HOA should start with a RFP. It would list all desired services and be sent to the management companies selected. I would not start with a MC's standard contract; and would have the HOA draft the final management agreement. I would request a list of all the HOA's managed by the specific agent who would be assigned to the HOA; and a sample contract with all costs in the RFP which would be reviewed prior to selecting the three companies brought in for an interview. IMO, only after this preparation is it time to interview.

As an HOA that just went self-managed, I will give you a little information on the Management Companies we have had:

The builder hired SM to be our property managers and at the time that we decided to switch management companies, we thought they were terrible, but after going through two management companies, we now see they were the best of the 3. They were the cheapest and they knew there stuff. They just weren't real flexible.

We first switched to SMoCF and the owner made lots of promises that they didn't deliver on and we left them primarily over poor initial service and for integrity reasons (meaning we didn't trust the owner, not that he was doing anything illegal or anything, just we didn't believe what he told us). Our manager at the time we left them was actually very good, but lacked a little tact when dealing with the homeowners.

Our final MC was ES and we were disappointed almost from the beginning. Fees upon fees upon fees, for this and that. No flexibility in handling requests from the board, etc. needless to say we dropped them as fast as we could.

With the economy and our homeowners turning against us, we opted to save the money. We expanded the board from 5 to 7 members and decided to self manage. We are 21 days into it and so far so good, but there is a lot we are still working out.

Good luck with your MC search, but don't always believe what they tell you and paying more doesn't always mean better service, as each MC charged more than the one before it, but the service level went down.

Notice I didn't list the names of the companies, but if you would like them, just let me know your e-mail address and I'll send them to you.