An HOA management company can make a huge difference in the efficiency and effectiveness of association operations. The HOA board can easily decide to hire one, but finding the right company takes more work than it seems.
What is an HOA Management Company?
A homeowners association, through its HOA board, is responsible for maintaining common areas, enforcing rules, collecting dues, and performing other related tasks. Due to a lack of time or expertise, many boards opt for professional assistance.
This is where a homeowners association management company comes in.
An HOA management company provides professional services to community associations, including HOAs and COAs. For a fee, this company handles a variety of tasks, including but not limited to:
- Accounting
- Collections
- Financial reporting
- Reserve planning
- Maintenance and repairs
- Vendor coordination
- Rule enforcement
- Violation tracking
- Resident communication
- Insurance reviews
- Administrative work
Of course, the specific scope and duties of an HOA management company will depend on the association’s contract with them. Some associations require full-service management, while others only need financial services.
Who Needs an HOA Management Company?
Homeowner association management is no easy feat. Many HOA boards hire professionals because they can’t handle the work alone. After all, board members are simply volunteers, and they don’t always have the time or resources to dedicate to the job.
In addition to a lack of time, many boards are inexperienced. They lack the necessary expertise to fulfill all the responsibilities of the association. Financial management is a common pain point, with legal compliance coming in at a close second.
Furthermore, operations and enforcement require consistency. Professionals are better equipped to maintain standard procedures in these aspects.
Smaller associations can often rely on self-management without significant issues. Larger associations, on the other hand, are significantly more challenging to manage alone.
What to Look for in an HOA Management Company
Professional management offers many benefits to associations, but choosing the wrong company can jeopardize the community’s long-term success. It is not enough to simply pick one and leave it at that. Boards must find the right company for the job.
Here are the key factors to consider when selecting an HOA management company.
1. Experience and Expertise
The company should have the necessary expertise and adequate experience in handling similar associations. If a company has only ever worked with condominiums, it might not be the right fit for a single-family HOA.
2. Full-Service Capabilities
Look for a company that comes with full-service capabilities. This means the company offers all the HOA management services along with on-site support. Services include financial management, rule enforcement, vendor coordination, and more.
Even if an HOA does not require full-service management at present, it’s beneficial to have the option to upgrade in the future.
3. Licensing and Certifications
The company should have all the licenses and certifications required in the state. Certain accreditations also add credibility and authority to a management company. A good example of this is the Accredited Association Management Company (AAMC®) designation from the Community Associations Institute (CAI).
3. Transparent Pricing Structure
Vague pricing is a huge red flag. Associations should also be aware of hidden fees and additional costs for optional services. The contract should indicate the fee structure with no room for doubt.
4. Strong Communication and Customer Service
A good HOA management company practices clear and responsive communication. Associations don’t want a company that takes forever to reply or gives confusing information.
It’s also best to look for a company that offers 24/7 emergency support. This way, boards have a point of contact in case of an urgent issue in the middle of the night.
5. Technology and Tools
Traditional methods are giving way to modern tools, paving the way for the future. Associations should opt for a company that leverages technology and utilizes online tools. These include owner portals, online payments, maintenance requests, and centralized document storage.
6. References and Reviews
Associations should check online ratings and reviews before proceeding with a company. If a company has a long history of complaints or a bad reputation, it’s best to move on and look for a different one.
How to Find an HOA Management Company
Selecting a management company is a long process, but starting on the right foot can streamline the search. When searching for a company, utilize online searches, referrals, RFPs, and interviews. Don’t forget to review the contract with an attorney before signing, too.
1. Online Search
Boards can look for potential candidates online. Even a simple Google search will turn up hundreds of results. Ensure that you tailor the search to the area where the association is located. Companies with local knowledge are always preferable.
Never trust a management company that doesn’t have an online presence. That’s a bad sign that the company isn’t trustworthy or is hiding something.
2. Referrals
If a board trusts word-of-mouth recommendations more than online ones, asking for a referral is the best course of action. Board members can talk to neighboring associations or other community leaders. Of course, just because a company comes highly recommended doesn’t mean boards can skip other steps in the selection process.
3. Request for Proposal
Once an HOA has a list of candidates, it can send out a request for proposal (RFP). An RFP helps standardize proposals, ensuring that they include all the information the association wants to know about a company. From these RFPs, the board can compare services, pricing, and other factors.
4. Interview
Sitting down with candidates helps the board gauge compatibility. An interview will allow the board to glean more information from the company and its managers.
Here are the best questions to ask homeowners association management companies:
- How many communities do you currently manage?
- How many managers do you have on staff, and how many communities does each manager oversee?
- What services are included in your standard management contract?
- Do you offer customizable service plans tailored to our HOA’s specific needs?
- What software or technology do you use for accounting, communication, and maintenance tracking?
- What is your process for handling homeowner complaints or disputes?
- What is your approach to handling delinquencies and collections?
- What is your process for hiring and managing vendors?
- What happens if we’re unhappy with your services? What is the termination process?
- What is your fee structure? Are there any additional charges we should expect?
- Do you offer 24/7 emergency support? How is it handled?
- Will we have a dedicated manager or a rotating team?
- What makes your company different from other HOA management firms?
- How do you handle transitions from another management company?
5. Contract Review
Finally, associations should negotiate and review the management contract before signing. Be aware of automatic renewal clauses, early termination fees, and hidden costs. Don’t be afraid to talk to the management company and re-negotiate the terms.
It’s best to have an attorney look over the contract as well. An attorney can help the board determine if the contract is disproportionately unfavorable to the HOA.
A Reliable Partner
An HOA management company can alleviate the board’s responsibilities and help the community thrive. Still, finding the right company is essential, so board members should not rush the process.
Keymont Community Management offers expert management services to associations in Virginia, Maryland, and Washington, DC. Call us today at 703.752.8300 or contact us online to get started!
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