5 Costly Mistakes Communities Make When Choosing a Management Company
5 Costly Mistakes HOA & Condominium Boards Make When Choosing a Management Company
Here are five costly mistakes to avoid.
1. Choosing Based on Price — Not Value
Management fees matter, but the lowest proposal does not always represent the best value.
Boards should understand what is included in the management fee and what may result in additional charges. They should also consider the resources behind that fee.
Who will manage your community? What experience do they have? What support staff will be available? How are homeowner calls handled? What financial services and technology are included?
Don’t just ask, “What does management cost?” Ask, “What are we receiving for that investment?”
2. Overlooking Financial Transparency
A management company will play a significant role in your Association’s financial operations. Your Board should never feel disconnected from that information.
Before selecting a company, determine what financial visibility your Board will have. Can you easily access financial statements? Review invoices? See current bank balances and transactions? Monitor delinquencies? Access historical financial information?
Boards should have the tools and reporting necessary to understand their Association’s financial position and make informed decisions.
Financial transparency should be built into the management relationship.
3. Failing to Evaluate Long-Term Planning
Community management should extend beyond handling today’s maintenance requests and paying this month’s invoices.
This is particularly important for established communities throughout NJ, NY, PA, and CT, where aging buildings and infrastructure can require significant long-term planning.
A strong management partner should help Boards prepare for reserve funding, capital projects, preventative maintenance, contract renewals, insurance costs, and major repairs.
Without proper planning, Boards can find themselves reacting to major expenses instead of preparing for them.
Ask prospective management companies how they will help your Board prepare for what is coming three, five, or even ten years from now.
4. Accepting Reactive Instead of Proactive Management
There is a major difference between responding to problems and helping prevent them.
Reactive management waits for something to break, a contract to expire, or an issue to become urgent.
Proactive management looks ahead.
Your management team should be monitoring contracts, financial trends, maintenance needs, outstanding projects, and community conditions—and bringing concerns and recommendations to the Board before they become larger problems.
One of the best questions to ask during the interview process is:
“How will you help our Board identify issues before they become problems?”
5. Failing to Look for a True Partnership
Board members are volunteers. They should not be expected to be experts in every aspect of community operations, finances, maintenance, insurance, vendor management, and governance.
That is where professional management should bring value.
The right management company should do more than complete tasks. It should provide guidance, recommendations, resources, and experience that help the Board make better decisions.
It should also understand that every community is different. The needs of a New Jersey condominium may be very different from those of an HOA in Pennsylvania or a community in New York or Connecticut.
Are you hiring someone to manage a task list—or choosing a professional partner for your community?
Look Beyond the Proposal
Before choosing a management company, evaluate more than the management fee.
Consider the people, experience, technology, financial controls, communication systems, support structure, regional knowledge, and long-term guidance behind the proposal.
Ask questions. Request a technology demonstration. Understand who will support your community and how your Board will access important information.
Because the goal shouldn’t simply be to hire a management company.
It should be to choose the right management partner.
Considering a Change in Management?
For more than 40 years, Wilkin Management Group has partnered with condominium and homeowners association Boards, providing professional management, financial oversight, proactive planning, technology, and experienced guidance.
Serving community associations throughout New Jersey, New York, Pennsylvania, and Connecticut.
Changing What Community Associations Should Expect From a Management Company.