Knowing how to choose a Property Owner’s Association management company is key to protecting your investment.
This is especially true because such companies abound in every real estate market.
And while competition tends to help an industry improve rather than stagnate, being too spoiled for choice can also make telling the good from the bad more overwhelming than it needs to be.
Here are our best tips to help you make the right choice.
1. Identify Your POA’s Needs
The first step to choosing the right Property Owner’s Association management company is identifying your specific needs.
It’s always a good idea to dedicate a portion of your Board of Directors meeting to making sure everyone properly understands what a Homeowner’s Association management company is and what they do.
By getting that out of the way, you’ll be in a better position to discuss and identify your community’s specific needs. This, in turn, helps you tackle the next tip!
2. Set Good Expectations
Now that you have a better understanding of your community’s needs, it’s time to set expectations for how those needs should be met – including by whom.
Compare a list of identified needs to the strengths and abilities of the volunteer community members that make up your Homeowner’s Association. This will help you identify your Property Owner's Association needs even better by allowing you to delegate tasks within the community responsibly.
Communication will be crucial here.
Never forget that your POA is made up of volunteers. Just because a member has the necessary skills and expertise to fulfill a particular task doesn't mean they can dedicate the time required to do so effectively.
3. Identifying Potential Candidates
Before you can choose a Property Owner’s Association management company, you need to identify some candidates.
It’s always worth looking for lists of the best HOA management companies in your area to start with.
But never underestimate the value of word-of-mouth recommendations. If you know someone that’s part of another community’s POA, don’t be shy of asking which management company they use and how they find the experience.
Every state has its own requirements regarding an HOA management company’s credentials, i.e., licensing. You have to make sure you properly understand what those requirements are.
That way, you can more easily identify which potential candidates are worth considering based on their credentials.
If a POA management company cannot provide details on their licensing, scratch them off your list. There are plenty of good excuses a company might give for being unable or unwilling, but there are no good reasons.
And, of course, it goes without saying that meeting your state or county’s specific requirements is an absolute must!
4. Vetting Potential POA Management Companies
After whittling down the list of potential candidates, you’ll need to start vetting them.
This can be more work than you might expect – which is why we’ll break this section into a couple of different parts.
Even if you originally discovered a POA management company through a personal recommendation, always ask for references and follow-up on them.
At the very least, you should ask these references:
How well does the management company communicate with the Property Owner’s Association and Board of Directors?
How promptly do they respond to calls and emails, and are they offering satisfactory responses?
How well does the management company handle conflicts, including those between HOA and/or Board members and those between these bodies and other community members?
This gives you practical, firsthand insight into how the POA management company operates from their clients' perspectives.
4.2 Ability to Meet Expectations
Remember your list of expectations? If a POA management company passed all the previous checks, it’s time to see how well they can answer your community’s specific needs.
Your list might look a little different, but here’s a good guideline of responsibilities to talk about with your potential candidates:
Property maintenance and repairs
Tenant marketing, screening, and retention
Vendor marketing, screening, and retention
Setting and collecting rent, including the handling of Association Delinquency
Handling tenant, owner, and association funds
As a final consideration in terms of the management company’s ability to meet expectations, talk about availability.
The last thing you want is for a candidate to tick all other boxes, only to end up being put on hold or getting shunted from one representative to another due to availability conflicts.
4.3 Fees and Contracts
The last step to vetting potential POA management companies is to sit down and discuss their fees and contracts.
Always determine what the fees are, what services they include (and what, if any, services are charged at additional rates), and what the fee schedule is.
Related to this is the management contract. This will include duration and termination clauses. The ideal balance is a 1-year contract with a 60-day termination notice clause.
Choose the Right Property Owner’s Association Management Company for You
We strongly recommend vetting at least three Property Owner’s Association management companies before making a final decision. This will help you choose the right POA management company for you and your community.
Don’t be shy of coming back to a company you’ve already talked to with new questions. This can make or break your decision, either by confirming an initial preference or helping you identify a better candidate!