Best Practices for Working with Your HOA Management Company

Every HOA board member has, at one time or another, felt overwhelmed by their volunteer job. Sometimes it’s the day-to-day responsibilities, sometimes it’s a contentious community meeting, and sometimes it’s just not enough hours in the day.

One of the best options for lightening the load for your HOA board is hiring a property manager. They can handle daily tasks, help with budget planning, work with vendors, and many other chores that board members find daunting.

If your HOA board is on overload, it’s tempting to hire the first property management company you meet. Resist that temptation. Hiring and working with a property manager or management company requires the same due diligence as every other HOA board task.

That due diligence begins before you contact a single company.

What Does Your HOA Need?

Every HOA community is different. The first thing you need to do is determine if your governing documents allow hiring a property management company. Once the board knows they can hire outside help, the next step is to figure out what you need them to do.

Smaller homeowner’s associations might only need help with budget planning, special assessments, or overseeing large projects. A larger community may want to hire a full-time property manager to handle every aspect of the association. Most HOAs will fall somewhere in between.

Property management companies often offer many different levels of service. The best way to avoid overpaying is to plan ahead. Your HOA board should meet to decide precisely what your community needs.

Once you’ve determined what it is you want from a property management company, start looking for the best fit for your HOA.

Ask around for recommendations and check references. Good property management companies have good reputations in their communities. Choose a company with experience managing properties in your geographic area. One of the greatest benefits of having a property manager is extra help in keeping the HOA compliant with state and local regulations.

Do background checks and get bids. Talk to at least three companies. Check licensing and insurance. It is your responsibility to spend the association’s money wisely.

A good property manager can improve life for the board and the community. They can handle daily tasks, schedule and supervise regular maintenance, and assist with fee collection (including overdue fees). They can guide your board through the long-term planning process and provide feedback on vendors, services, and more.

In short, they can turn your HOA board member job into something you enjoy. They can help your board improve your community and avoid burnout.

Get It In Writing

The foundation for a good working relationship with your property management company is a well-written contract. The contract spells out the responsibilities of the manager and the board. It also details fees and other charges.

Most property management companies have a standard contract. It’s a good place to start, but not a wise place to finish. Remember you’ve already determined the scope of services your HOA requires. Make sure they are spelled out in the contract, everything from routine maintenance to financial oversight.

Property managers who know exactly which duties are their responsibility and which go to the board have a better relationship with the entire community.

For example, a contract that spells out which member calls are dealt with by the property manager and which go to the board avoids all sorts of misunderstandings. Your property manager cannot be expected to manage the daily operation of the HOA and field every email or phone call.

A good contract may identify that maintenance calls go to the property manager but complaints about neighbors go to the board. That concrete division of labor helps the property manager and the board work together.

On the other hand, a contract that leaves out that detail is one that’s destined to fail. Confusion about who is responsible for various operations is the enemy of good working relationships. A property manager overloaded with complaints about noise or dogs or the color of a front door cannot effectively run your HOA.

At the end of the day, the board is responsible for the well-being of the community. Hiring a property manager does not relieve the board members of their fiduciary duties. Make sure your contract spells out any financial and other reporting responsibilities of the property management company.

Your contract should also detail every fee and charge your HOA will incur using the service. It should have specified terms and conditions under which either party can terminate the contract. Some contracts have large termination fees. Check before you sign.

When you hire your first property management company, try to get a trial period. Perhaps three months. This allows you to fine-tune your needs and establish a rapport with your property manager before signing a longer contract.

It’s common for property management companies to offer contracts with up to three-year terms. Look for a contract that has the option to renew yearly.

Best Case/Worst Case Property Management

The best case scenario when you hire a property management company is that your HOA thrives with professional help. Your property manager becomes a trusted part of the community and a valuable resource for the board.

Your HOA board can sleep easy knowing the association is abiding by all laws and regulations, and that tasks they struggled to manage are in the capable hands of a trusted professional.

Worst-case scenarios, although unusual, do sometimes happen. Most are the result of poor communication or lack of due diligence in hiring. An unethical property manager with too much authority might steal or mishandle HOA funds. A poorly organized property manager can fail to provide required reports and updates.

Avoid bad outcomes by following good hiring practices. Assure good communication with a solid, detailed contract. Always have financial checks in place so that no one, board member or property manager, has sole discretion over funds.

With good hiring practices and detailed contracts, your HOA can build a positive relationship with your property management company that will last for years.