How To Choose An HOA Management Company For Your Community

by iupilon
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If you live in a neighborhood with a homeowners association and you are one of the HOA board members in charge of things—like maintaining the common areas, enforcing rules, and handling financials—you probably realized running that HOA is a lot of work. In fact, according to the Foundation for Community Association Research, of the over 350,000 HOAs in the United States, approximately 9,000 of them involve large-scale responsibilities.

That’s why most HOAs hire professional management companies to deal with the day-to-day responsibilities and administrative duties. But finding the perfect management company can be a challenging feat. With budgets, amenities, repairs, and more on the line, your community needs a reliable partner who can handle those unique needs for years to come.

But don’t stress! Read this article, as it will walk you through what to watch out for during your search. Follow these tips and you’ll have your residents happily calling your development home in no time.

Assess Financial Management Procedures

Because HOAs handle significant community funds, the management company’s accounting and controls process requires careful review. Request details on how they process payments, safeguard cash flow, and report financial statements. You want robust processes that minimize risk.

At a minimum, the company should provide an HOA audit guide detailing the separation of accounting tasks across multiple trained staff with oversight, provide monthly reconciled bank statements, maintain transparent records covering every transaction, establish homeowner payment plans if needed, and offer an annual audit.

Get Recommendations From Other Associations

Before calling up any management companies yourself, chat with some of your connections on neighboring HOA boards first. Get the scoop on which providers they partnered with and what they really think of them.

Your fellow board members have been in your shoes. They can give you the inside intel on things like how quickly a management company responds when issues pop up, how on top of things they are with maintenance requests, and how often they actually keep homeowners in the loop.

When you do start contacting companies, make sure to ask for some references you can contact yourself, too. Past clients will give you the straight truth on the pros and cons a salesperson might try to gloss over.

Define Priorities And Must-Have Services

Before setting up any interviews and tours, grab a notebook and jot down everything you expect an HOA management company to handle. How does their financial management process look? What kind of maintenance coordination will they do? Community newsletter? Coordinating annual meetings? Enforcing parking violations?

Mapping out these must-haves keeps your search focused. Come interview time, you can clearly explain your community’s priorities upfront and see if providers measure up. Comparing “apples to apples” between companies gets much easier, too, when you know exactly which services are non-negotiable from the start.

Think through the workload before agreeing to anything. Underestimating how much your unique HOA actually needs leads to headaches all around when companies fall short later. Save yourself future grief by being brutally honest now about what’s required to run smoothly!

Interview Multiple Companies

Don’t just review a single HOA management firm website and then move forward based on advertised claims alone. Even companies with glossy marketing materials and bold promises may not suit your community. Instead, take time to interview multiple providers thoroughly.

When interviewing service providers, inquire about their capabilities, work styles and company culture. Ask questions that reveal details on communities served, response times, staffing, issue escalation protocols, communication procedures, accounting controls and other operational details that indicate their ability to meet your needs.

Also, share specifics on neighborhood size, layout, budget, existing issues, and goals. Evaluating several options against your HOA’s needs can help identify the best overall fit beyond surface qualifications.

Vet Credentials And Certifications

Responsibly managing homeowner associations involves understanding intricate governance, finances, and legal frameworks under which communities operate. Management companies should have proper professional credentials and the right pool of skills to handle the nitty-gritty of the job.

Ask if organizations carry accreditations from nationally recognized bodies like the Community Associations Institute. Trade group affiliations validate expertise tested by established industry sources.

Also, review staff certifications in areas like public accounting, pool operations, insurance coverage, and education. Relevant specialty training demonstrates that a company commits resources toward management education. Don’t hesitate to ask for proof of claims if any credentials seem dubious or unclear.

Evaluate Communication Process

Consistent, thoughtful interaction with homeowners prevents issues and strengthens the community. Discuss the management company’s communication plan during interviews.

Ask how staff channels like email newsletters, website updates, annual mailings, and board meetings facilitate the sharing of information. Also, find out how the company tracks maintenance requests, routing concerns to the right people and closing loops with updates.

Finally, understand the firm’s philosophy around owner engagement. Do they follow through and build rapport with residents? Or stick to cold transactional exchanges? Clear ongoing dialogue tailored to your HOA’s demographic needs to prevent problems.

Check Client References

Once a management firm meets prerequisites on paper, take the next step, connecting with current and past client boards. Speaking directly with references offers unfiltered commentary on strengths and weaknesses.

Come armed with questions based on priorities uncovered during the interview process. Ask about responsiveness in emergencies, staff tenure, billing transparency, owner satisfaction, and even attracting new homeowners to expand the community. Also, determine if the reference would hire the firm again, knowing what they know now. Honest responses confirm whether management executes promises delivered during the sales process.

Choose Experience Serving Similar Communities

Property management needs for a high-rise tower vary greatly from a garden-style condo or single-family home planned development. Seek a firm well versed in governing structure, vendor landscape, and local regulations impacting your specific HOA category.

If the pool of capable companies seems small, expand horizons to firms in nearby major metro areas. Though not local, larger regional providers may have the right-sized experience managing an association exactly like yours elsewhere.

Review Contract Terms Thoroughly

Before contracting, carefully review the agreement’s terms and conditions. Consult a lawyer if any jargon seems vague. Verify if the contract specifies costs, services, communication commitments, and renewal provisions clearly.

Double check HOA fee breakdowns so recurring charges like management expense percentages, admin fees per residence, and hourly rates for tasks like meetings don’t balloon over time. Also, look for cancellation policies and termination notice periods to protect interests if the relationship sours. Signing the contract with all parties clear on expectations written in binding agreements will prevent conflicts.

Takeaway

Taking time to find the perfect HOA management company seems tedious. You just want to pick one and move on already. But don’t take shortcuts now, or you’ll likely regret it later. Doing your due diligence is crucial to finding a trusted partner truly invested in your community’s long-term success.

Yes, following the tips above takes upfront effort upfront, but it saves headaches down the road. Vetting several providers, checking references, and negotiating favorable contracts will set your HOA up with the right fit. A bit more patience on the front end pays dividends for years as your new partner helps your neighborhood thrive.

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