Whether your board has only been working with your HOA management company for a couple of years, or your board inherited an HOA management company that has been around for decades, there can be times when it is no longer the right fit.

It can appear complicated and challenging to change HOA management companies, as they are so integrated into the organization. But if they are no longer serving the specific needs of your community, it is worth it to switch. We’ll go over common reasons associations change HOA management and the steps that are taken to make that happen.

Signs It’s Time to Start Shopping for a New HOA Company

You might be wondering if it is time to switch up your HOA management company. Here are some of the most common signs it could be time to start shopping around for a new HOA company.

First, poor communication is a big sign that the neighborhood management company is not the right fit. Next, it is important to make sure that the board has open communication, knows what problems are occurring and that solutions are being implemented. Also, the company needs to hear and handle the board’s concerns right away and seriously. In addition, the board has to have answers for homeowners as well. If the HOA management group or community manager doesn’t return calls or emails, that is a big problem.

Secondly, sometimes the community manager is falling too far behind on key projects. For instance, if you’ve requested a streetlight be repaired, and it seems like they’ve fallen through the cracks, that is a red flag. In addition, if you’re still waiting to hear about bids from potential landscapers, that would also be a red flag.

Another sign of problems is if too many mistakes are made. Boards have reported having problems getting compliance drives or walks completed consistently. Moreover, compliance issues not being handled in the manner that the board has requested can be negative. In addition, violation letters going to the wrong houses would be another mistake to be aware of. To sum up, these types of errors can add up and mean it’s time to find a company that can successfully follow through on everything.

Lastly, it is very important that the board has access to all of the financial records. This means being able to easily find them online and on-demand, as well as getting complete information. Moreover, if the board requests the records, the full records should be delivered immediately. In conclusion, if the company cannot or will not supply financial records, it’s probably time to look for new community management.

Steps to Switching Your HOA Company

Firstly, you need to know your timing. Reviewing your management contract with the full board, for example, will help guide this. The board should also get legal assistance to go over the current contract. This is important to determine how and when the contract can be terminated. Many of them come up for renewal or expire annually, for instance. Or it could also be a two or three-year contract. It’s important to know whether the contract renews automatically or not.  And if that is the case, you need to know how long it is renewed for.

Next, now that you know when the contract comes up for renewal, some questions need to be considered. First, what amount of time does the contract give for notice of termination? Is it 30 days or 60 days or 90 days? Moreover, is the timing counted from the effective date of the contract?  These are all important questions for figuring out the best way to end the contract.

The next step is to form a management search committee. The committee will be the ones to collect information, solicit proposals, and interview the candidates.

Subsequently, before looking for new HOA companies, the committee will want to assess the community’s needs. Then, it will be easier to determine what you are looking for in a management group. In short, any company considered should have specific qualifications and services needed to be spelled out from the committee.

A few things to also consider include the fees that will be required (which is dependent on what kind of and how many services the homeowner’s association needs); and whether you want to stay with a management company that is the same size, larger, or smaller. In addition, recommendations, references, who the manager will be, and how communication will occur are things to also consider. Since you’ve already had some experience with a management company, you’ll want to ensure your new candidates will not have the same problems you faced in the past.

Lastly, once the committee has assessed the options, reviewed the bids, talked to references, and has an idea of the best candidates, they can make a recommendation to the board of directors. As a result, sometimes the board will simply take the recommendation. However, sometimes they will want to interview the final candidates themselves instead. Either way, you will be headed in the right direction and ready to take the final steps to change your homeowner’s association management company.

Final Steps to Switching Your HOA Management Group

After the committee decides on a management group, they should vote to send notice of termination to the current manager and vote to hire the new management group (subject to signing a new contract). And of course, you also will have to have followed all of the requirements for termination in your current contract.

Next, the current property manager should then work with the new community management to ensure a smooth transition. They should prepare files and records for pickup or delivery, answer questions, and provide needed information. Certainly, there is a chance this could be awkward or difficult, but usually, the current HOA property manager works to end the relationship on a professional note. Many times homeowners associations re-hire past property managers, so as long as everything has been handled professionally by all parties, they likely will understand the change is not personal. It’s also likely they have other properties in common or have had to work together in another capacity, which makes it more likely a smooth transition will occur.

Furthermore, if you’re having trouble getting your current management group to cooperate with the new management group, the HOA board should remind them all records belong to the HOA. That is to say, bank accounts are already set up in the association’s name. So, all that is needed are new signature cards and a corporate resolution transferring control.

Lastly, changing management groups can sometimes seem complicated or challenging, but if specific needs of the community aren’t being met, switching can ultimately be worth it. And to sum up, with these steps you will be well on your way to successfully switching your HOA management.

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