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Subject: How to fire a property management company
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Author Messages
DamnR
(Georgia)

Posts:1


10/04/2018 8:31 PM  
Hey all,
We've had our property management company for about 6 years now. and as many do over time, they have become very lazy. Long story short, we, as a board, do not feel they represent our community, as we believe they should. During my recent phone call with the CEO, he gave me a long list of excuses as to why they did absolutely nothing wrong, so we're ready to move on.

And we have no idea where to start. I've read over a dozen blog posts on how to replace a property management company, are speaking with our lawyers tomorrow, are planning a committee for the new selection, and even have a few potential management companies we've heard of, but we still want to ensure we're doing this correctly. Are there any pro tips any of you would recommend to ensure we don't overlook?

Any advice is appreciated!
JohnC46
(South Carolina)

Posts:7872


10/05/2018 1:03 AM  
Look for PM's that are presently managing associations of your relative size and needs. Get names and contacts at these associations from the PM and contact the associations for a reference.


SheliaH
(Indiana)

Posts:2319


10/05/2018 5:29 AM  
Adding on to what John said - think about what you want your property manager to do and prepare your request for proposal accordingly. When you start comparing companies, it should be based on the same criteria. Perhaps one reason you're not happy with the current bunch is because you were asking for services that weren't part of the contract.

Remember the board is responsible for overseeing the property manager's work, but that doesn't mean stepping back and letting them make decisions that are the BOARD's responsibility. It's OK for the manager to make suggestions, but the board makes the final call and should capable of thinking for themselves.

Conversely, the property manager has been hired to handle the day to day operations - micromanagement is annoying and shouldn't be necessary, so get out of their way and let the company do what it do.

Although cost is important, service is critical and you WILL get what you pay for, so don't let the price alone be your deciding factor.

Your committee should also be putting together a transition plan so you'll know what will need to be done once a decision is made. By the time the new company comes in, you want to make sure everything has already been done so you don't have to chase the old company for records, money, etc. Your association attorney can also help with creating a checklist.

When you finally announce to the old company that you're cutting them loose, feel free to explain exactly why you've made the decision. It might be too late for them to save your business, but maybe they'll behave more appropriately with their other clients. And if they don't, well, let them deal with the consequences.

Good luck!
JohnC46
(South Carolina)

Posts:7872


10/05/2018 10:17 AM  
Sound advice from Shelia:

think about what you want your property manager to do and prepare your request for proposal accordingly. When you start comparing companies, it should be based on the same criteria. Perhaps one reason you're not happy with the current bunch is because you were asking for services that weren't part of the contract.
MarkM19
(Texas)

Posts:160


10/05/2018 11:11 AM  
DamnR,
How many homes or Condos? Full time or Portfolio PM needed?

If you are going to be a Portfolio account it is very important to know how many other properties your manager will be managing. Most companies will just add more workload to an existing PM which may get you worse service than you currently have now. Make sure you interview the manager that they want to assign to your HOA. It is very important that this person fits your HOA and also your board. I know that members change often but it is important that this person does not try and bully board members but instead works with your board. In my opinion the best PMs are the most detailed person you have ever been around. How quickly will they respond to board emails? So many little things that can drive boards crazy. I would also ask them theoretically how they would handle the specific problems that you have had in the past.


Good luck

BarbaraT1
(Texas)

Posts:107


10/05/2018 12:04 PM  
It's very hard to make an informed consumer choice when you're choosing an HOA management company because the information you most need (what HOA boards have fired them and why) is all but impossible to find.

Presumably the prospective companies you are looking at will give you references. How long have they been clients? If all their references have only been with them a year or two, that's a red flag. Look them up on Glassdoor - what are employees saying about the working conditions there? Look on Indeed and see how often they have posted job openings, that will give you an idea of employee turnover. Know that whatever questions to ask the company directly are going to be answered with the rosiest version of the truth. They'll tell you that they aim to give their porfolio managers no more than 8 properties, but leave out the part where that's just a theoretical goal and the manager really has 12 properties. Unless you are seeking an on site manager, it's not standard to have you meet interview the actual manager you'll get, but if the contract is large enough or the company is small enough they may let you.

Ask for a complete list of fees - from late fees to transfer fees to scans and copies. Ask for a sample contract - look for multi year contracts, cancellation penalties, automatic increases, automatic renewals, 'on boarding' or 'off boarding' fees.

It takes about 60 days for the new management company to get up to speed, and your current company probably wants a 30 or 60 day notice so I'm going to suggest waiting until next spring to make the change if you have annual assessments that are due on January 1. Transitioning companies is always a pain, but it is exponentially worse if you do it during an assessment billing cycle. If you're monthly, there's never a good time though.

And when you do make the change, know that you will have to tell your homeowners over and over and over again for at least 2 years. I would often have owners call me upset because they jut found out about a management company change that happened years prior. Be prepared to send out multiple letters, emails, post notices, call meetings and remind ever owner you come in contact with.



MarkM19
(Texas)

Posts:160


10/05/2018 12:20 PM  
Barbara,
All great points. I forgot to add that you should compare their transfer fees on Sold properties to the old companies transfer fees. Every person that see those closing statements near escrow time will try and challenge and once the contract is signed between HOA and Management Co. they get locked in and become a profit center for the MC.
KerryL1
(California)

Posts:5961


10/05/2018 2:04 PM  
You've rec'd a lot of good advice, Damn, including the in important points made by JohnC & Sheila. And then Mark & Barbara added really important points too.

You also might try careful reading your current contract with your MC. What would you like to add to it? What's not needed after all? What did they tend to neglect. Were they supposed to b on your premises 40 hours a week (onsite), 12, or? Would more or fewer hours work for your HOA?

Committee: Unless your board is really large, I think the whole board should be involved. If you want an executive committee of th board,, OK. I would not have a committee of non-board members. In my high rise HOA anyway, non-derictors know cry little about our budgets or technical/mechanical systems.
KellyM3
(North Carolina)

Posts:1325


10/08/2018 8:12 PM  
Posted By DamnR on 10/04/2018 8:31 PM
Hey all,
We've had our property management company for about 6 years now. and as many do over time, they have become very lazy. Long story short, we, as a board, do not feel they represent our community, as we believe they should. During my recent phone call with the CEO, he gave me a long list of excuses as to why they did absolutely nothing wrong, so we're ready to move on.

And we have no idea where to start. I've read over a dozen blog posts on how to replace a property management company, are speaking with our lawyers tomorrow, are planning a committee for the new selection, and even have a few potential management companies we've heard of, but we still want to ensure we're doing this correctly. Are there any pro tips any of you would recommend to ensure we don't overlook?

Any advice is appreciated!




Having been through a management change where our HOA left a long-time relationship......let the contract naturally expire and do not renew it. Even if it's a year, it gives you time to really vet replacement companies and do your homework.

Breaking contracts mid-stream is very disruptive to HOA operations, especially at the Property Management level, as it confuses your dues payers. It's not worth it to feel the satisfaction of getting rid of a lazy service provider.
LetA
(Nevada)

Posts:551


10/09/2018 4:49 AM  
Consider this, the lawyer for your HOA was hired by your property management company. I would go to a different lawyer, one that is well versed in contract law.
FredS7
(Arizona)

Posts:860


10/09/2018 11:57 AM  
Read the contract first to figure out the procedures/ timeline for termination.
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