How to Switch HOA Management Companies
Do you encounter issues with your HOA management company? You might be unsure of what to do if the board has determined that your current management is ineffective.
How to Change Your HOA Management Company: A Guide
Having an HOA management company on your team has a lot of advantages. What does an HOA’s management company do?
The board typically receives assistance from an HOA management business with daily chores that maintain the community’s operations. This can involve getting assessments, talking to owners, tracking service requests, and other things.
Is a management company required by an HOA?
It varies. Some associations, usually those with fewer units and lower sizes, can function without them. Self-managed HOA software makes it possible to operate your HOA on your own, although most HOAs do need professional assistance.
While many companies excel at assisting HOA communities with management, there are some that fall short. There’s a strong probability that it’s time for a change if you’ve ever wondered, “How do I get rid of the HOA management company?”
Can an HOA management company be changed, though?
They can, of course. After deciding to change HOA management company, you must ensure that the transition is handled as professionally as possible.
Here are some tips on how to properly fire an HOA management company:
Review your management agreement and seek counsel.
How can I switch my management company?
The majority of HOA board members ask such questions. However, you should first consult your management contract. Typically, this legal document will include instructions on how to switch HOA property management companies.
If your contract is about to expire, you can start looking for a new business without too much difficulty.
Make careful to cancel it before the deadline if it is scheduled to renew.
However, you must review the termination clause if you want to stop your agreement early.
A termination clause will be present in a typical contract.
The period of time you have to notify the company of your intent to terminate is usually outlined in contracts.
While some agreements provide for a 30-day written notice, others call for a 60- or 90-day written notice.
Additionally, you should confirm that the timing is taken into account as of the contract’s effective date. You can send your notification on time in this manner.
When studying how to get rid of an HOA management company, bear in mind that if you’re terminating the services of your management company before the conclusion of the contract, there may be fines and other procedures involved.
It is best to review the contract with an attorney.
Create a Search Committee
A search committee will be helpful in replacing the current HOA management with new management. The task of the search committee will be to gather data, ask for proposals, speak with potential candidates, and evaluate the bids.
Before making recommendations to the HOA board, the committee will take everything into account.
The next step is to determine what needs your association has.
What qualities are you looking for in an HOA management company?
When describing the services you need and the qualifications you’re seeking, it’s crucial to be specific.
You should also think about your budget. Perhaps you can only spend a particular amount on new management or that price is the upper limit. You might need to reduce the scope of the services if you wish to pay a lesser cost because management fees are directly related to them.
Examine The Bids
When you have their proposals, you can move on to reviewing the quotes. Examine the cost of each company’s services in relation to their charge schedule. Keep in mind that sometimes, cheaper isn’t better. You could receive poor-quality services while paying a modest price from a company.
The size of the management business you choose to engage with is another important factor to take into account. Larger businesses typically have more resources at their disposal as well as more customers. On the other side, smaller businesses typically have more time to devote to your neighborhood because they typically oversee fewer communities.
Check on References and Credentials
When evaluating potential providers, it is important to confirm that they are licensed and insured because the top HOA management businesses are. You should individually get in touch with the references for each business. You might get a better idea of what to anticipate by speaking with some of their previous or present customers.
Final Candidates for an Interview
Plan interviews with them once you’ve reduced your alternatives to a sensible number. A wonderful way to evaluate the personalities of potential HOA managers is to meet them in person. It’s important that your personalities don’t clash because you’ll be working with your manager for a while.
Additionally, scheduling an interview provides you the chance to voice critical concerns. Inquire about their costs, their approach to solving particular issues, and their customer service procedure. This is an excellent moment to address those issues as well because you don’t want to run into the same issues with your new business.
Choose a New Company
The HOA board will still have the final say despite the search committee being in charge of the process. After considering everything, the committee can advise the board.
The board will occasionally accept it as is. But other times, the board might want to speak with the candidates one last time. The board should then decide whether to revoke the current agreement and appoint a new HOA management.
Notify Everyone and Limit Access
It’s not enough to know how to terminate an HOA management company when switching; you also need to know how to handle the fallout.
You must first let your community members, employees, and suppliers know about the change. This is due to the fact that they also communicate frequently with the HOA management business. They can already limit contact and discontinue doing business with the corporation if they are aware of the change.
Boards should let the previous company know that the new one will contact them. By doing this, the old business will be prepared when the new management asks for documents, such as an arrears list, the maintenance roll, secondary parking fees, and the corporation’s tax reports.
There is a good chance that the old management company had access to the bank accounts, financial records, passwords, and other information of your organization. The board should take precautions by limiting their access or making the necessary adjustments to safeguard the association’s data.
Make Sure The Transition is Smooth
Although some transitions can take up to two months, most are finished in less than 30 days.
A smooth transfer to the new management company should be made possible by the current management. They should compile the required papers and documentation and offer assistance with any issues.
The following are the primary documents that must be transferred: the job file for any ongoing capital improvement project (including contractor and subcontractor contracts, architectural plans and specifications, engineer’s notes, and payment requisitions), the rent rolls, the arrears list, the tax ID number, copies of most recent bank statements, insurance policies, vendor contracts (laundry room, parking, elevator repair, etc.), and the insurance policies.
The possibility of a difficult or uneasy transition is a common worry shared by HOAs. But more often than not, management companies and managers do behave professionally when assisting with the changeover to new management.