Switch Homeowners Association Management Company

Steps Your Board Should Take

Begin the Change

The steps you need to take to switch homeowners association management companies can be intimidating.  For new HOA Board members this is especially true. The frustrations you experience or the want to improve your community necessitate a switch in HOA management styles. Here are some steps to help you make the switch in management companies more smooth and efficient from a cost standpoint. 

Some reasons you may switch companies would be that your current management company is slow to collect on outstanding owner debt. Owners falling behind  in their assessments can spell trouble for your budget. Secondly the management company has troubles with accounting or transparency. Clear concise reports and transparent budgeting are necessary for a board to act and plan. Lastly you might not get knowledgeable support. New managers can spell trouble with turn-over at a management company. If they won’t give you an experienced knowledgable rep who hustles for you this may be a reason to make the change. Calls aren’t returned emails aren’t answered or complaints from owners are stacking up.

Whether your board inherited an HOA management company that has been around for decades or has only been working with your HOA management company for a couple of years there comes a time when your HOA management company is no longer the right fit.

When you decide to change switch homeowners association management companies the process  can appear complicated. It is challenging to change HOA management companies as they are so integrated into your organization. But if that management company is no longer serving the needs of your community it is worth it to switch. To follow are common reasons associations switch HOA management companies. We will provide you with the steps that are taken to make that happen.

Signs It’s Time- Switch Homeowners Association Management Company

Red flags. You have more than wondered if it is time to switch up your HOA management company. Some of the most common signs it is time to start shopping for a new HOA company.

First it is very important that your board has access to all financial records. This means being able to easily find them online and on-demand as well as getting complete information. Often times a great accounting solution will provide the board with instant access to reports. HOA Accounting firms can provide each owner access to their accounts important financial reports and shared board reports on demand. HOA Boards are finding that accounting-only solutions can be enough to run their community with a full-scale management company. Strong boards can reduce expenses and improve financial reporting in one step. 

Moreover if the board requests records the full records should be delivered immediately. In conclusion if the company cannot or will not supply financial records it’s probably time to look for new community management. The fog created by delaying reports is a huge red flag. A board of directors can request all their financial records (and keys) at any time they wish. Thought should go into already having selected the new company before making the change – switch homeowners association management company. We will help.

Secondly the perception is that the community manager is falling too far behind on key projects. For instance if you’ve requested a street light be repaired and it seems like they’ve fallen through the cracks that is a red flag. Make sure that you see vendor communications and that the manager has been sending updates. In addition if you’re still waiting to hear about bids from potential landscapers that would also be a red flag. Slow reporting is a sign that your manager is not on top of these processes. 

Another possibility another sign of problems is if too many mistakes are made. Your board has reported having problems getting compliance drives or walks completed in a timely manner. Moreover owner compliance issues not being handled in the manner that the board has requested can be a lingering problem. In addition violation letters going to the wrong houses would be another mistake to be aware of. This indicates as lack of community knowledge and is lazy. To sum up these errors can add up and mean it’s time to find a company that can successfully follow through on with the needs of your community.

Lastly poor communication is a big sign that the old management company is not serving your community. Complaints from board members or owners are finding their way to your email inbox. Next it is very important to make sure that the board has open communication. Your board needs to know what problems are occurring and solutions are about to be implemented. Also the HOA management company needs to hear and handle the board’s concerns right away and seriously. You may request a change in mangers or improved accounting reports. All board members should be included in the beginning of the change process. Emails and updates should be sent to all not just one or two board members.

In addition the board has to have answers for homeowners. Whether these questions are due to expense reports vendor contracts or insurance claims all questions should be answered clearly. If the HOA management group or community manager doesn’t communicate return calls or emails that is a huge problem.

Steps to Switch Your HOA Management Company

Firstly you need to get your timing down. Most importantly the process of reviewing your management contract with the full board needs to be executed. For assistance a new management company can help guide your board through this step. Your board should also get legal assistance to go over the current contract. This is important to determine how and when the contract can be terminated. Many common contracts come up for renewal or expire annually for instance. Or it could also be a two or three-year contract. It’s important to know whether the contract renews automatically or it must manually be renewed by your board.  If an automatic renewal is used in the contract you need to know how long it the contract is renewed for.

Next now that you know when the contract comes up for renewal some questions need to be considered. First what amount of time does the contract give for notice of termination? Is the termination notice required 30 days or 60 days or 90 days? Moreover is the timing counted from the effective date of the contract?  These are all important questions for figuring out the best way to end the contract. These are best figured out by an attorney or an experienced management company. Both experts will help your board out a great deal.

Form a Management Company Search Committee

The next step is to form a management search committee. This board committee will be the one to collect information solicit proposals and interview the management company candidates.

Subsequently before looking for new HOA management companies the committee will want to assess the community’s needs. With these needs in hand it will be easier to determine what you are looking for in a management group. In short any company considered should have specific qualifications and services needed to be spelled out from the committee. Your committee may find the needs are entirely in accounting communicating and reporting. This can be provided by an Accounting Only Management Company.

A few things to also consider include the fees that will be required (which is dependent on what kind of and how many services the homeowner’s association needs); and whether you want to stay with a management company that is the same size larger smaller or accounting-only. In addition recommendations references who the manager will be and how communication will occur are things to also consider. Communications capabilities of the new management solution may entirely be better billing and letter capabilities. Communications to the community should be a priority as great communications often reduce complaints to the HOA Board a great deal. 

Since you’ve already had some experience with a management company you’ll want to ensure your new candidates will not have the same problems you faced. You do not want to change companies and find the exact same problems.

Lastly once the committee has assessed options reviewed bids talked to references and has an idea of the best candidates they can make a recommendation to the board of directors. A vote may be required by the full board or the committee’s decision can be the final call. Once this is in place you will be headed in the right direction and ready to take the final steps to change your homeowner’s association management company. Do not skip assessing the community’s needs and what is lacking. This is a crucial step to determine your direction.

Final Steps to Switching Your HOA Management Group

After the committee decides on a management group they should vote to send notice. This notice will be for termination to the current manager. You have already voted to hire the new management group (subject to signing a new contract). Don’t forget you also will have to have followed all of the requirements for termination in your current contract. Not doing so could prove very costly to your community in extended charges termination costs and anything buried in the terms of the contract.

Next the current property manager should work with the new community management company or HOA accounting firm to ensure a smooth transition. They should prepare files and records for pickup or delivery answer questions and provide needed information. Certainly there is a chance this could be awkward or difficult. The current HOA property manager hauled work to end the relationship on a professional note. It is in their best interest as you may return. Many times homeowners associations re-hire past property managers from other management companies. So as long as everything has been handled professionally by all parties they likely will understand the change is not personal. This makes it more likely a smooth transition will occur. Regardless of the change climate your board has legal rights. 

Finally if you’re having trouble getting your current management group to cooperate with the new management group the HOA board should know all records belong to the HOA. That is to say bank accounts are already set up in the association’s name. Importantly you will need changes in that new signature cards and a corporate resolution transferring control. Old managers should be removed from accounts. New managers will need access and signature cards on accounts to assure the transition is completely. Finances should not experience too long a transition but time should be allowed for checks being transitioned to new addresses or new online billing. The new HOA accounting  or management company will assist in this process to keep the books balanced. 

Lastly changing management groups can sometimes seem complicated or challenging but if specific needs of the community aren’t being met switching can immediately be worth it. And to sum up with these steps you will be well on your way to successfully switching your HOA management company or accounting solution. Ready for a change to switch homeowners association management company? We will help

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