With all the HOA property management companies out there, it can be overwhelming to try and decide which is best for your community. However, choosing an HOA property management company is an important decision because it will have an effect on your everyday life.
Below are a few questions to ask an HOA property management company that your board is considering hiring. It is also a good idea to sit down with the board members to discuss what your community’s specific priorities are for hiring a property management company because each property has unique needs and challenges. Knowing how to choose an HOA property management company is a skill that will have a long-lasting impact on your community.
How Long Have You Been in Business and How Many Properties Do You Manage?
According to research company IBISWorld, the United States contains nearly 300,000 businesses specializing in property management, and none of them have a market share of more than 5 percent. To speak colloquially, that means you’ll find a lot of small fish in a very big pond when conducting your property management company interviews. That’s why it makes sense to speak somewhat bluntly when initially sorting through companies.
High up on your property management company questionnaire should be this pair of questions:
- How many years of experience your HOA property management company has?
- How many units/properties your HOA management company currently manage?
If the company is new to the field and has minimal experience with managing multiple companies, strongly consider moving on to another more seasoned candidate immediately.
What Service Does Each HOA Property Management Company Offer?
Just as each property is different, so are property management companies. It is important that you understand what their role will be and what kind of services you should expect from them. Common HOA property management services include:
- Administration
- Maintenance
- Customer service
- Financial
- Communications
However, not all property management companies offer all of these services, while others offer a more robust service package. It’s important that you are clear about the service options of each potential HOA property management company so that your expectations are aligned before you choose a partner to work with.
How Does the HOA Property Management Company Charge for Services?
Hiring a property management company is an investment in your community and your well-being. As such, you should expect that the management company will charge fees for their amenities. However, unless your state mandates fees, there isn’t a set fee schedule and each company will charge their own rates.
Some common fees types include:
- Initiation fees, which include the work it takes to transition the day-to-day operations to the property management company
- Ongoing fees, which are set monthly fees that you pay the management company, typically charged per unit; and
- Exit fees, which consist of the work it takes to switch from one management company to another.
These are just a few examples of fees that a HOA property management company may charge, but there could be many more. Make sure you are aware of the exact fees each property management company charges for their services. Having a fee schedule will be especially helpful when trying to compare HOA property management companies.
What Value Does the HOA Management Company Bring to Your Community?
Aside from the day-to-day functions, ask what value-added services the management company will provide. Do they see opportunities to cut your costs? Will they review your contracts to ensure your HOA is receiving the best rates? Remember that the HOA is hiring them to make the board’s job easier. It is important that you get clear answers about how they plan to do that.
With Whom Do You Partner and What Additional Resources Do You Bring with You?
No property management company can do everything in-house, and part of a successful relationship with a property-management company includes choosing one with extensive connections in the community. Why is this important? Just consider the following hypothetical situations.
The community pool at your HOA has begun developing visible cracks and water usage bills have begun to climb. Residents have begun to express concern about a lack of security measures in common areas. And the landscaping around the community park constantly looks unkempt.
If your property management company lacks connections with general contractors, security companies, or landscapers, it won’t be able to stay on top of the numerous tasks that an HOA community requires. That translates into unhappy residents — and an unsuccessful community. So during your interview, make sure to ask, “Do you have a team to help out HOA property manager in day to day tasks?”
Is the HOA Property Management Company Licensed and Insured?
Some states require HOA property management companies to be licensed; however, not all states require this. Do some research to see if your state is one of them and, if it is, make sure the company you’re considering is licensed and can provide you proof upon request.
In addition, you may want to consider a company that has been certified by the Community Associations Institute (CAI), a membership organization that provides its members with the resources and knowledge to be professional and effective property managers.
Any property management company your HOA is considering should also be able to provide proof of insurance. State laws will determine the minimum amount of insurance required, but liability and workers’ compensation insurance are also good things for them to have.
Also, make sure to check each prospective HOA property management company’s references. How they do business with other properties is a good indication of what you can expect from them in the future.
How and What Do You Plan to Communicate with Us?
Executive coach Joseph Sommerville has said, “We take communication for granted because we do it so frequently, but it’s actually a complex process.” That’s absolutely true and clarifying exactly how communication will take place is incredibly important when determining how to find the right HOA property management company for your needs. Effective action simply can’t happen without timely communication, and any HOA property management company needs to answer in a way that furthers your community’s goals and fits with its culture.
