Scott Brady is co-owner and principal of Progressive Association Management, a CACM-member HOA management company serving 228 communities and nearly 15,000 homeowners throughout Southern California. Since founding the association management division in 2020, Scott has grown the company into the fastest organically growing association management firm in California by limiting manager workloads, providing full back-office support, and holding every team member accountable to documented daily service standards. |
Only a few years ago, an association in Anaheim had plenty of choices when looking for a new management company. They could choose a small local “mom and pop” company with deep roots in the community. That company may have had just a few employees and limited resources, but they offered a high level of customer service, and often the owner of the company was also the Community Manager.
Or they could opt for a regional, mid-sized company within the county. This type of company managed 50 to 100 associations, had more resources and departments, and would assign a dedicated Community Manager to the account. Their pricing was usually higher than the “mom and pop,” but they provided better checks and balances and more oversight.
For larger communities with 150 to 500 owners or more, there were also very large, multi-county and multi-state companies that specialized in managing big communities with many amenities and significant resource needs.
But times have changed, and the choices for an Anaheim association have narrowed considerably. The small “mom and pop” companies have largely gone out of business. They could not afford to pay their staff what the larger companies could, and with ever-increasing laws complicating the management industry, they simply did not have the resources to keep up. Then the large companies began acquiring the mid-sized regional firms. Consolidation has been rampant in recent years, and where there were once 20 to 30 companies to choose from, that number is now closer to 10 to 15.
So what should an Anaheim board know before hiring a new management company? Here are our suggestions.
What to Look for When Hiring an HOA Management Company in Anaheim
Are You Local?
This still matters. Do you want the ownership of your management company to be shareholders buying stock for an expected profit, or a local, family-owned company invested in the community? Being local means understanding local nuances, having established relationships with local vendors, and being familiar with city statutes. It also means being able to visit the community for on-site walks, vendor inspections, board meetings, and owner interactions when necessary.
Do You Have the Necessary Resources?
Whether your community has 20 owners or 200, you need a company with adequate resources to service your account. You should expect a clear separation of duties, meaning the person approving a vendor invoice should not be the same person cutting the check. Only a company with separate accounts payable, accounts receivable, collections, and financial departments is truly qualified to manage your association. They should also use robust, user-friendly management software such as Cinc or Vantaca, which makes day-to-day interaction with the company far more seamless.
On Average, How Big Are the Associations You Manage?
In a perfect world, the company managing your association has an average portfolio size that mirrors your own community. For example, a company managing 100 associations with a total of 7,500 owners manages an average of 75 owners per association. If your community has 75 owners, that is a strong match. Generally speaking, the smaller the management company, the smaller the average community size in their portfolio. Large, multi-state companies prefer communities with hundreds or thousands of owners because there is simply more revenue to be made. Make sure to ask this question directly.
On Average, How Many Associations and Owners Do Your Managers Handle?
This answer can be hard to verify, but it is worth asking. If a manager is overseeing 20 communities with an average of 75 owners each, that is 1,500 owners and up to 80 to 100 board members. We use a Key Process Indicator (KPI) that owners, on average, require about 12 minutes of a manager’s time per month. If that manager is responsible for 1,500 owners, that adds up to 18,000 minutes, or 300 hours per month, which works out to 75 hours per week. That is simply too much for one or even two people to handle well. At Progressive, we limit our managers to no more than 10 associations or 1,000 owners. A smaller portfolio means more time and better service for every board we work with.
Can We Cancel Our Contract at Any Time?
Most companies require you to sign a one-year contract that cannot be cancelled in the first year. Even after that, many contracts do not go month to month. They typically include a narrow cancellation window, such as within 30 days of the contract’s start date, and many still require giving the management company an opportunity to address issues before termination is allowed. All of these loopholes make switching companies quite difficult, which is why many boards decide to “live with the devil they know” rather than making the effort to find a better fit. At Progressive, any board can cancel our agreement at any time with a 60-day notice. No hoops, no loopholes.
What Is Your Base Management Fee and What Are Your Other Fees?
Every company will provide a base management fee in their management agreement, but they rarely explain how they calculated it. What boards often do not realize is that the other fees a company charges can easily surpass that base fee. Common add-ons include software access fees, budget assistance fees, meeting minutes, ACH and eCheck fees, travel, vendor coordination, paper, envelopes, postage, and printing. It is not unusual to receive a monthly statement with 15 line items.
At Progressive, our monthly management fee is transparent and can be calculated directly on our website. We then charge an additional $5.25 per owner per month so that your total fee is “all-included.” For 11 months out of the year, you will see a single line item for our services. We do not nickel and dime. The only exception is the annual disclosure package sent to every owner, which we charge for separately due to its length and mailing cost.
Everyone Claims They Provide Great Customer Service. How Do You Actually Deliver It?
You will not interview a management company that admits to inferior service or mediocre operations. Every company will claim superior service, first-class management, and industry best practices. If they make those claims, you have every right to ask how they specifically and tangibly deliver on them, without the hyperbole.
At Progressive, not only do we limit the number of associations and owners each community manager handles, but we also allow our managers to work remotely from home, with the requirement that they live no more than 30 minutes from any association in their portfolio. A happy, not overworked Community Manager makes for a better board partner, and that is how we deliver on our promises. Check out our Google reviews to see what our boards and owners are saying.
In One Sentence, Summarize Your Business Philosophy.
Every company has a reason for being. They have a culture, a mission, and core values. If they have good reviews and are well regarded in the industry, those principles are usually what got them there. At Progressive, our promise is simple: we provide a better experience for our boards and owners, we deliver that experience with rock-solid back-office operations, and we document that accomplishment through constant feedback from our boards. Simply put, we promise, produce and have proof of a better business model.
If you are ready to explore what working with a local, family-owned Anaheim management company could look like for your community, we would love to connect.
