Scouting for Better Association Management

It is generally believed that most associations would not recommend the company that currently manages their community. One of the reasons they live with the “devil they know” is due to the time and effort it takes to find a new company. To show “good business judgement” the board is advised to interview 2 to 3 companies before terminating their current company and transitioning to a new one. So how do the board members assigned to the task of researching and finding a new company do so?

• Google Search. The default for most board members is to type in “what are the best association management companies in my city?”. That is a good start, but just a start to your search. Before taking a deeper dive, you need to know what kind of company you want. A small family-owned local operation or a large multi-state company? One with deep resources or one with deep connections to the city where your association is located? What is it about your current management company you don’t like so you can focus your questions and inquiries on that need. Once you find a company on Google, you should visit their website and Google page. Does their website look up to date, and does it have significant information on their company? Is it easy to understand their business model, the ownership, and how they can provide the service you expect. On their Google page, do they have good reviews? If they receive a bad review, which is common from owners in associations, does someone from the company respond to the negative review and follow up with the reviewer? Most companies will not provide pricing on their website and customize their monthly management fee for your community, so you will be required to fill out a form on their website: resist filling out a number of these forms otherwise you will be bombarded with follow up emails and calls.
• Beware APM. Some companies are “sponsored” and paid to be at the top of your search. One company, All Property Management (APM) which is prominently displayed, is not a management company at all. It is a lead generation company, and just a conduit to the actual management companies. They charge management companies a fee to have access to the information you put on their landing page, and whoever pays the most has a jump on the four other companies that also paid them. These management companies may not be the best, just willing to spend the most. Also, their salespeople may be quite aggressive since the company has paid for those leads and needs a return on that investment. It is not a bad tool per se, but when you receive 5 responses from management companies in 24 hours, the temptation is to focus on price since they will all claim to provide superior service. Just like a Google search, visit their website, Google page and still invest in some due diligence.
• Different Names, Same Company. There has been a recent trend in the past few years that large companies, particularly Associa, will buy a competitor, but not change the name of the company. Maybe, somewhere on the website they will mention an affiliation, but if you are interviewing Powerstone, Seabreeze and Associa, you are interviewing the same corporate owner.
• Word of Mouth. It would be great if you could ask another association for a recommendation, but few board members are friends with board members from other communities. Even if you had a friend, their community may not operate like yours or have the same issues. A recently constructed detached single family home community is nothing like a 30-year-old stacked condominium association. There are situations with a nearly identical community adjacent to yours is having a great experience with their management company, it is just rare.
• Google and Yelp Reviews. The best indicator of your future experience with a management company is the experience others have had with them in the past. Reviews are certainly the best tool to do so. But read the reviews and if negative, what is the source of the anger? Management companies don’t make decisions for the community, the board does, and if the board votes to increase dues, levy an assessment or not pay for a repair or improvement, owners tend to blame the messenger and slander the management company. A negative review for not returning calls or indifferent service may be valid, but remember, if you are investigating a larger company, one managing thousands of owners, it is likely that a small percentage of those owners will use social media to beat up on a company, even if the wrath is not warranted.
• You Like the Manager, but not the Company. Some boards will approach the Community Manager, whom they like, and encourage them to start their own company and the association will go with them. There are a few problems with this. An individual manager does not have the insurance, operations, financial resources and most likely, the skill to not only manage your community, but run a new company. Also, tampering with the staff of your current company may carry legal ramifications. When you hire a new company, you are primarily hiring the company, not the Community Manager. The company will strive to provide a manager that is a “fit” for your community, but Community Managers retire, move to other states, get promoted, are recruited by other companies or just burn out and leave the industry.
• Self-Manage. Some associations, as a measure of last resort, decide to “self-manage”. This almost never works out. You can be paid to be a manager of your community, but that voids your Director and Officers insurance. It is extremely rare for a board member to be paid due to the increased personal liability, so you are then an unpaid volunteer. You enforce the rules, conduct the elections, run the meetings, coordinate vendors, keep in compliance with Davis-Stirling and manage the finances. For many buyers, it is a “red flag” when a community self-manages and may negatively impact property values. Think long and hard before taking this drastic measure.

What is HOAScout?

What if there were website where vetted, qualified, certified and superior association management companies could be easily found? What if that site provided tools for boards looking for a new management company and general information to be used by board members to improve their skill set? A robust website that exists to help you make better decisions as a board member.

• Comparison Chart – Quickly and easily compare three management companies. They may provide their monthly management fee separately, but you will be able to compare fees, programs and company policies.
• Performance Guarantees – All of our participating companies provide performance guarantees.
• Board Director Success Seminar Links – HOAScout sponsors 3 “Board Director Success Seminars” a year where top industry professionals, including an attorney, a reserve study specialist, an insurance broker and a senior community manager share their expertise.
• The 20 “Mandatory” Questions – These are the 20 questions you should ask of any community before you interview them.
• Blogs and Industry Information – Current articles on industry trends and information to assist you with your board director duties.
• Free Book: “The ABCs of HOAs: The Ultimate Guide to Homeowner Associations for Buyers, Owners & Boards of Directors”.
• Free Guide: “Board Director Success Guide: How to Lead Your Community Without Losing Your Mind”
• Free HOASnapshot Report: The Carfax of HOAs. In just a few pages, you will have a curated report that provides a “health score” and a summary of your community.
• Link to the “The Condominium Bluebook”, the Complete List of Davis-Stirling Statutes
• Link to the “Uncommon Conversations: The Association Management Podcast”