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How to Make an Easy Transition from One Management Company to Another

person smiling at board meeting with peers in professional attire

Many homeowners’ associations (HOAs) partner with a professional community management company to help fulfill the duties of the board of directors. With a management company by its side, your community may enjoy benefits like reduced costs, increased efficiency, and stable and reliable operations; however, it can take time and effort to find the management company that best suits your needs. Read on to discover how to change your HOA management company, questions to help you find the right management company, and steps for making the transition as smooth as possible.

How to Change Your HOA Management Company

Not every management company will be the perfect fit for your community and switching from one management company to another does occur. Whether it’s poor communication, technology challenges, or adjustment issues, the reasons for changing management companies should be evident to all board members. As you consider removing your HOA management company, first review the current management contract with your board and attorney to establish timing and get crucial legal advice. Stick to the agreed-upon termination process, as there can be fines and legal ramifications for breaking the contract.

When it’s time to find a new management company, start by creating a search committee. A search committee will help ensure there's a combined community effort to consider, investigate, and choose an appropriate management company for the association.

The committee should work to solicit bids and send out a request for proposal (RFP) from the company or companies they wish to consider. The proposal, put simply, allows the potential management company to interview the board. With the information provided in the RFP, the management company can more accurately identify how they can best serve your community.

To get the most out of your RFP, be as detailed as possible and include:

  • The basics. Total number of homes and type of community (townhome, condo, single-family)
  • List of amenities. Pool, clubhouse, gates, deeded parking, etc. 
  • Board information. How frequently you meet and the number of board members
  • Assessment information. Are assessments billed monthly, quarterly, or annually?
  • The board’s expectations. Be transparent about your management strategy

Management companies will respond by sending their proposals, providing detailed information about their company and a pricing bid for their services. The board or search committee should carefully review all the proposals submitted. This will help streamline the selection process, establish clear expectations, and set your community up for a truly productive and long-term partnership.

Read More: 6 Reasons Your Community Should Hire an HOA Management Company

Interview Questions for Your Potential Management Company

After you’ve had a chance to carefully review, evaluate, and compare your list of proposals, you should be well-informed and confident enough to move forward with a select number of management candidates. It’s essential to conduct interviews with your potential community management company before agreeing to a partnership—the effectiveness of a board often depends on the type of management they choose. To make the most of these interviews and help decide who can best meet the association’s needs, ask the following questions:

  • What kind of services do you provide?
  • Are your services flexible?
  • How much do your services cost?
  • How are associations billed?
  • How are your managers educated?
  • What type of technology do you provide?
  • How will you communicate with the board?
  • Do you have additional resources, programs, or partnerships?
  • How will you add value to the community?
  • Are you up to date with current HOA regulations and laws?
  • Do you have the proper licenses, certifications, and insurance?
  • What truly sets you apart?

Requesting references and asking these key questions will give you a good idea of how the management company operates, how it can enhance your association, and how to change your  HOA management company. 

Read More: 6 Ways an HOA Management Company Can Help You Save Money

Steps for a Smooth HOA Management Company Transition Process

Once you know how to change your HOA management company and a transition or a significant change occurs, maintaining smooth operations, continuing ongoing projects, and staying on track with goals can be difficult. It’s essential that your new management team makes every effort to work with your current company and your association to ensure a professional, seamless transition. This process involves reviewing financials, governing documents, CC&Rs, and past minutes. It also involves assessing vendor contracts and scopes of services while collecting all homeowners’ fees and balances, performing vendor walks, and hosting a meet-and-greet. To keep the association running as it should, divide transition duties into actionable steps:

Step 1. Review all the official records and documents related to the business of the association with your new management company. Examples include:

  • Finance and accounting – Current financial statements, delinquent accounts, budgets, and existing collection letters
  • Operations – Community layout, residential guidelines, and reserve study
  • Communications – Current website, association contacts, contractors, and vendors
  • Compliance – Deed restrictions and enforcement and covenant modifications
  • Training – Training calendar, association policies, and board orientation

Step 2. Meet often with your new management company and familiarize yourself with their technology and recommendations. Similarly, ensure they’re aware and fully trained on your processes and procedures. Some processes to work through during this time include:

  • Association goals—annual and long-range
  • Collections processes
  • Rules enforcement procedures
  • Inspections
  • Software program training

Step 3. Communicate changes with homeowners. Make sure homeowners know who the new community association manager is and how to contact them. Get homeowners up to speed on any new technology or community improvements that will affect their day-to-day lives.

Finding the Right Service Providers for Your Association

Now you know how to change your HOA management company, but a well-run community association doesn’t come easy. The responsibility can be a lot for a board of directors to handle. That’s why many boards hire professional advisors and service providers to help them successfully fulfill their roles, complete requirements, and assist with duties. Read our ebook, “The Community Partners & Professional Service Providers Every Board Needs,” for a better understanding of the key partnerships you need, how to make the most of them, and more.