How to replace your property management company

Started by DanT1 • 5 replies • 10335 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

DanT1 (California)
Posts: 1

Posted:

I am a member of an HOA in Fremont, CA and over the years I have felt that the property management company that we are using is doing a poor job. Each year HOA rates continue to rise and we are now paying nearly 300.00 per month for our condos. During this down economy I know that many companies have re-negotiated contracts and lowered costs while for some reason our property management company always finds ways to raise costs and our board members seem to always approve them. Being someone who grew up in a family of contractors, I can know bad work when I see it and currently we are having our units painted and its terrible. I guess it my fault for not getting on the board but I plan to change that next election period.
A specific example is a special assessment we had last year of 7k to replace our decks. I contacted a contractor and got a bid to do my deck and his price came in at 2k. How is that possible?
My questions are simple. Isn't an HOA for they people and by the people of the particular community? Well, I can tell you that our property management company makes it feel like they own the place. That is not right. Our budgets also do look kind of shady.
I want to know if anyone has every replaced their property management company and what the process was like.

DonaldM3 (South Carolina)
Posts: 132

Posted:

Hey Dan,

Read your post and can’t help but believe you’re on the right track; it seems, from what you write, that your board has let you (the HO’s) down – that they are not fulfilling their Fiduciary Duty to the HOA for which they have a legal obligation to do. It is essential that when committing for a large dollar repair item that they get bids for the job; although you post is not clear on this, it does not appear that that is what your board (with the help of your management company) did.

Although they like to be referred to as a management company, they are really a service company – they serve the HOA that they are contracted with; more specifically, they do the bidding of your Board of Directors who are really managing the HOA. Your BoD has a legal obligation to act in the best interest of the HO’s – to put the needs of the HOA before there own needs. Based on what you have written it appears that your board may be failing the HO’s in that regard.

Although I’m not going to be able to help you with specific information about changing your management company, there are some pretty savvy posters on this site who will. They will not necessarily want to rehash material that has already been posted and this subject has been gone over in previous threads.

So, take a look at the page where you initiated your post at the upper right corner; there is a button called “Search”. Left click on the button, and type in the box “Change management company” then left click on the “Search” button. The system will bring up previous threads on the subject with much material for you to read from past discussions on this subject. From there you may want to modify your post with some specific questions regarding your needs. You sure seem headed in the right direction, however, and I wish you the best of luck; it sounds like your board needs someone like you serving on it. Can’t help but wonder how many homes are in your HOA?

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

A specific example is a special assessment we had last year of 7k to replace our decks. I contacted a contractor and got a bid to do my deck and his price came in at 2k. How is that possible?

Because the HOA is run by volunteers who know nothing about construction and the contractor is taking advantage of that. Surprised? If you do know about construction...... you should volunteer or you will just pay higher dues.

RogerB (Colorado)
Posts: 5,067

Posted:

Dan, the process to change management companies is:
1) Review your Bylaws to determine hiring authority; usually the Board selects and hires a management company.
2) Review the management agreement; it should state the term of the agreement - usually either party may terminate upon X days written notice or when the agreement expires or is up for renewal.
3) If the Board can be convinced to consider changing management companies they can develop and send out an RFP (request for proposal) to management companies which are considered as replacement candidates.
4) Based on the response the Board could interview 3 management companies.
5) Select one and investigate, if not previously done, to determine their performance with other HOAs- preferably try to contact HOAs which no longer employ them.
6) Once another management company has been selected terminate the current company in compliance with the management agreement and sign an agreement with the new management company. Some overlap may be needed.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Dan,

You're preventing your community from enjoying your expertise by not volunteering. Some contractors and handymen smell ignorance in an HOA, especially passive HOAs, and jack up prices. Your board thinks it's getting good work (and might be) but it's paying through the nose and doesn't know it.

An HOA that doesn't pay attention could receive multiple yet too-highly priced, bids for work.

___________________

Regarding your deck quote, the HOA is likely required to hire companies with high insurance and workers' comp insurance policies, which will raise prices above other contractors that you could hire at lesser rates.

However, a $5,000 swing in price for a deck rebuild seems a wide gap in price no matter what.

DanielH1 (California)
Posts: 482

Posted:

I'm with a HOA in San Jose, CA which is very close to Fremont. Contact me at [email protected] and we can discuss California management companies.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here