Whether your community is a massive development or a pocket sized co-op, you will need a dedicated team of professionals to remain solvent and operational. This team includes a property manager, an accountant or financial advisor, and an attorney. While all of these individuals are vital, of particular importance is having a competent property manager.
Hiring new management is never an exciting prospect. There is the turmoil involved in replacing the existing management company; balancing the books, and making sure that all necessary details are attended to. Is there a formula to assure a successful change, or guidelines to ensure a positive move in the right direction?
“We are not rapacious weasels,” quips property manager Jonathan Louis, CEO and managing partner of American Management Group in Pembroke Pines. “Getting past negative stereotypes is our biggest hurdle. We’re there to help.”
How do you determine whether a prospective management company is trustworthy? What are the warning signs or red flags to be aware of? How do you begin the search process?
Finding the Right Partner
Developing a successful relationship with your property manager is akin to a healthy marriage. That might sound like a stretch, but in reality, it is very accurate.
When you begin dating, often friends or family will jump in with suggestions. They know your personality and life circumstance and want you to be happy. Furthermore, you’ll come with a great recommendation.
“Most associations hear about property managers by word of mouth,” says Louis. “Someone we already manage knows our reputation. It’s then up to the board or association to do their due diligence and check into the firm’s qualifications and background.”
In dating, oftentimes compatibility can be assessed within the first few minutes or series of questions. Similarly, a board can determine which property management firm is a suitable match.
When a management change is imminent, the best way to start the process is by having a lengthy discussion with the home owner’s association board (HOA). The board must fully understand what is not working with their community’s current firm, and what changes to expect with the new management company. Sometimes the issues stem from a personality conflict than the actions of an entire company. In these cases, assigning a different manager is all that is needed for positive change.
Finding What You Need
When you are building a personals ad, you want to represent yourself accurately, so you have the greatest chance of finding a partner that meets your needs. For example, perhaps you want someone to accompany you to the movies and discuss them with you afterwards. If someone responds saying they dislike cinema, you’ll probably dismiss them immediately. However, if they are an avid cinephile and frequent film festivals, then you may possibly be “swept off your feet”.
A property management firm has the potential to sweep you off your feet too if they provide all the services your board needs.
“You want a property manager that can service the diverse needs of your community, not just collections,” says Louis. “They should have the ability to confront all the issues of the organization, as well as any unforeseen roadblocks.”
Whether the issue is individual or systemic, it’s a good idea to have your association’s attorney review the current contract and determine the best way to separate from the current management without incurring additional costs. Additionally, when signing with a new management firm, it is important to make a thorough review of the new contracts and documents before anything is signed; while some board members may argue about the expense of involving the attorney in the process, due diligence can be a huge cost saver when making these decisions.
“Find a company that fits the level of service you want and expect,” suggests Louis, “If you go wrong here, it’s hard to correct.” When determining which services your community requires, make sure to budget for them in advance. For instance, if you have a pool that requires a towel attendant, make sure your association can afford it.
“Make sure to visit the management firm’s corporate offices, and make a point of meeting the support team,” advises Louis. Ask to see policy and procedural manuals, and learn how both expected an unexpected issues are dealt with.
It is imperative to perform proper screening protocols for potential property managers. The scope of responsibility is high, as are the potential consequences of hiring an incompetent firm.
“Boards and residents absolutely need to conduct due diligence prior to making any hiring decisions. Be sure to check how many years they have been in operation as well as reviews from other associations,” says Louis. “Also, do they have relationships with vendors that might pose a conflict of interest for your community? Check now before the contract is in effect.”
“Be proactive about reference checks,” Louis adds. “Ask for a list, and the freedom to call different associations, not just the three references they give you.” Speaking to both present and past associations managed by the prospective firm will give community decision-makers an understanding of a company’s management style, and whether that will fit with their own community. It is also a smart idea to see what other subsidiaries a property management company owns. Insurance companies, cleaning firms, security and even landscape vendors may be part of a larger package if they are fully or partially owned by a prospective insurance company.
When developing a new relationship, it can be a little bit of a guessing game when it comes to setting expectations. Who is going to call first?
It is the same when developing a relationship with your property manager. It is never too early to start talking with your property manager, remember, it is their job to help your community function as effectively as possible. Getting their advice before problems arise, especially legal ones, is essential to creating a safety net for your board. Cleaning up the mess of a board-gone-rogue is not fun and is better to be avoided; so give your manager a call.
When searching for the right property management company, it is important to identify the level of commitment that a CAM is prepared to take on; do their managers address issues directly, or does the board make most of the decisions and call upon the manager as needed? If hired, will the company supply their own vendors? Will the vendors invoice directly to the association?
In addition to checking references, it is important to determine proof of proper licenses, insurance, and workers compensation coverage for all employees. Other important points: make sure to examine the management company’s monthly financial reports, and make note of when those reports are available.
“It is important that the management firm have excellent customer service. You want to know how they deal with owners, especially during after-hour emergencies,” commented Louis. “South Florida represents many different languages, cultures, and customs, making courteous and efficient customer service a top priority.”
Break Ups Are Easy
Sometimes, despite the best of intentions, relationships do not work out. Make sure your contract with your management firm provides for a “termination without cause,” in case you need to get a better match. Most management firms will be up-front with their termination policies.
In any case, successful relationships require lots of work and communication. If all goes well, a fairytale ending is possible.
American Management Group is the leader in providing turnkey community management solutions to communities across South Florida. With over 25 years of experience in property management, AMG has the confidence and vision to help with your organization’s daily functions, as well as execution of long-term plans. Contact AMG today for insight on how to navigate your organization’s needs.