Management companies come in all sizes and shapes, as do community associations and their boards, and there is no clear answer to the question of how to choose the company best suited for your Board and your community.
Like most things in life, there can be advantages and disadvantages to everything. A small company may be able to provide more personal attention, but are they small because the service they provide is not in demand? An established company may tout its years of experience, but will a newer company try harder to please? A less expensive company will be easier on your budget, but will their service be low in quality as well? A more expensive company may provide top quality service, but will you need to raise assessments to pay their fees – and is that necessarily a bad thing?
A management company may want to take over responsibility for the day to day affairs in running your community – which may be a good thing – but is your Board too “hands on” to allow that to happen – which could result in endless conflict? All of these questions can only be answered by you and your Board as you interview different companies and survey their offers.
I would suggest, however, a few guidelines that I have come to recognize over the years as significant regarding the choice of a new management company:
1. The most important person in the relationship is the property manager you will be interacting with on a day to day basis. Oftentimes, the owner of the company or director of property management attends the interview, and while you may sign a contract based, at least in part, on that meeting, it may be the last time you see him/her. It is equally important to interview the person who will be your property manager to determine if that person is competent and compatible with your Board. While it is always possible that the property manager initially assigned to you may not be your manager forever, the quality of that manager is also probably an indication of the quality of personnel employed by that company.
2. Possibly the second most important aspect of your relationship with the management company will be the “back office” personnel who do the record keeping, billing, etc. Pay a visit to the office of the management companies that you are considering so that you can see how they operate and meet the people behind the scenes who are so critical to the success of the relationship.
3. Ask for a one year contract to start. The management company should be amenable to this, even though they may prefer a multi-year deal. If you are satisfied with the management company’s performance after year one, you can consider a multi-year contract at that time.
4. Look before you leap. Property management is a difficult job in the best of circumstances, and no management company can provide service that will satisfy all Board members and all residents all the time. The transition period in changing management companies is also not simple, even under ideal circumstances (and the circumstances are almost never ideal), and it inevitably causes substantial stress and chaos for the board and homeowners due to the need to transfer files and adapt to new staff and procedures. And there is never a guarantee that the new management company will be better in all respects than the old one. Every company has its strengths and weaknesses, as does every individual property manager. Have you tried your best to iron out differences with your current management company by communicating to them the sources of your dissatisfaction and allowing them a fair opportunity to resolve things? If so, and if the response has been less than satisfactory, then maybe it is indeed time to make a switch, but expect some rough spots, especially at the beginning.
5. Ask for names and contact information for Board members at other communities managed by the company you are considering. At least some of those communities should be similar in size and type to your own. Don’t necessarily expect glowing recommendations from everyone. As I said, property management is a tough business. Look for comments that indicate whether the management company is providing a professional service and is responsive to Board requests.
6. Don’t spend too little. Remember – your job as a Board member is not to save money. Your job is to maintain and manage your community in the best manner possible. Hiring a great management company may be the best decision you make. If it happens to cost a few extra dollars per unit per month, so be it.
I often compare a board’s relationship with its management company to a marriage. No relationship is perfect and while keeping together requires effort, understanding and patience from both sides, there are often benefits to be realized. Nonetheless, there are times when a divorce may indeed be the best solution. Learn from your past mistakes. Choosing a new company (akin to a second marriage!) first requires an introspective evaluation and reasonable expectation of what your community and your Board needs most from its manager, followed by a diligent search for the closest match out there. Then everyone has to get to work in trying to forge a successful relationship.
