How to Find & Choose the Right HOA Management Company

How to Find & Choose the Right HOA Management Company

Last Updated: January 31, 2023 by Cameron Smith

If your homeowners association (HOA) is running out of time and volunteers, it might be smart to hire an HOA management company. The right HOA management company can cut down on the work your HOA board members have to accomplish each week, making running and maintaining an excellent community much easier.

How to Find an HOA Management Company

You can find an HOA management company for your community in a number of ways, including:

  • Ask People in Your Network
  • Google Local HOA Management Companies
  • Visit Other Homeowners Associations and Ask for References

Ask People in Your Network

If you’re a member of an HOA board and need a new company to help tackle administrative or other work, it may be wise to ask your peers, coworkers, and others you know personally whether they live in an HOA and if the HOA uses a management company. Ask them:

  • How they’ve liked the experience with that company so far
  • What kinds of services the company provides
  • How much the company charges for all of its services
  • Whether they would recommend it for you and your homeowners association community

Google Local HOA Management Companies

When doing a Google search, include “local” in the search query so that you only get results that are relevant for your community.

Unless you live in a relatively isolated place, there should be several potential companies your community can work with. At this point, it’s down to you to compare those companies to each other based on factors like price, services, reputation, and much more.

Visit Other Homeowners Associations and Ask for References

If you know of a high-quality, good-looking neighborhood that’s run by a homeowners association, you can approach the front office or one of the HOA board members and ask whether they work with a management company. If so, you can then ask them questions about services, prices, recommendations, etc.

This may be particularly wise if you need a full-service HOA management company. In that case, the neighborhood may very well have a front office and on-site HOA management company manager you can connect with.

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How to Choose an HOA Management Company

Once you’ve identified one or more HOA management company candidates, you need to know how to pick the right company for your HOA’s unique needs. You can choose the right HOA management company by:

  • Determine the Kind of HOA Management Company You Need
  • Forming a hiring committee out of HOA board members
  • Investigating a company’s services
  • Determining how much the company’s services will cost in total
  • Holding an interview with prospective HOA management company partners
  • Checking a given management company’s reputation
  • Reading through a proposed contract carefully

Determine the Kind of HOA Management Company You Need

There are three different kinds of HOA management companies:

  • Full-Service  – They perform all of the on-site needs, including repairs, maintenance, fee collection, enforcing rules, and more.
  • Remote – They don’t perform on-site needs, but do help with accounting, paperwork, and other administrative needs.
  • Consulting – These types of companies are hired for one-off instances, such as enforcing rules, negotiating with vendors, or putting together a local event.

The type that you need is dependent on the size of the HOA, as well as how functional the board is.

For example, a few streets of townhomes requires different services than a huge neighborhood with parks, lawns, a gym, and a pool.

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Form an HOA Management Company Hiring Committee

Why put together a hiring committee? Practically all homeowners association boards are democratic; one person doesn’t make the majority of decisions for the community all by themselves. Since the decision to work with a management company affects everyone in the community, it only makes sense to involve the board as much as possible.

Your hiring committee also allows you to focus your efforts rather than leaving everything up to a raw vote, which can be cumbersome and time-consuming. You should put together an HOA management company hiring committee comprised of:

  • Board members who have experience hiring management companies or working with contractors
  • Board members who are interested in doing research with you
  • Board members who may be interested in contacting and communicating with the management company regularly (depending on its size and its policies)

For the best results, make sure your committee is anywhere between three and 12 people in total. The larger the committee gets, the longer it could take for you to contract with a worthwhile management company and settle the matter.

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Investigate Company Services

Your hiring committee should break down exactly what your community needs from a management company, then set about analyzing each candidate accordingly. If, for instance, your community needs a management company that will handle litter removal across several blocks, you can automatically ignore companies that don’t offer trash pickup services.

Common Services for HOA Management Companies

A given HOA management company may offer a wide range of different services. Depending on the company’s type, size, and expertise, your future HOA management partner may offer services like:

  • Groundskeeping and communal area maintenance
  • In-unit repairs
  • Policy enforcement
  • Violation reporting and tracking
  • Bill collection
  • Administrative work
  • Event planning

Remember, full-service HOA management companies offer the widest range of different services and are best suited for large communities that have a lot of needs. The other types of HOA management companies are best if you have plenty of willing volunteers to help maintain your community and ensure that community members act within policies or guidelines.

Determine an HOA Management Company’s Fees

HOA management company fees can be broken down into several different types. Depending on how much money your community has to spend, you may be able to afford more expensive companies or have to go with a more cost-effective solution, like a remote HOA management company.

An HOA management company can cost several hundred dollars per month or much less – it all depends on things like the size of your community, the kinds of services you require, and whether you will regularly require the management company to do extra services or tasks. HOA management company fees can be broken down into:

  • Monthly fees – These are the standard charges for an HOA companies service. This usually falls between $10-$20 per unit per month. Discounts are often available based on size and amenities that need to be serviced.
  • Initiation fees – These one-time fees are for getting up to speed with policies, rules, and procedures of the community, as well as potentially hiring staff or setting up offices. These can be $30,000 or more for larger communities.
  • Extra fees and charges – The most common of these are repairs or non-standard landscaping. Often, there will be an escrow account for the management company to dip into.

Hold an Interview with the HOA Management Company

Once you’ve determined what an HOA management company does and how much it costs, it’s time to hold an interview with them. You should ask:

  • How the management company takes care of other communities in the same area.
  • Whether the management company has ever run into problems with boards or with residents and, if so, how it solves those problems.
  • How much the management company charges for its services. Ask this question to make sure that the answer is the same as what is displayed on its website or brochure.
  • What the management company offers to homeowners associations in terms of services. Again, this helps you to double-check that the management company doesn’t participate in false advertising.
  • What the HOA management company thinks of your community, and whether they’ll be able to make a positive impact on its residents.

You can also ask any other questions desired by your board members. As the hiring committee, you’re in charge of choosing the right HOA management company for all of your residents; take the time during the interview to ensure that the organization for you is up to the task.

Investigate the HOA Management Company’s Reputation

An interview is important, but so is performing outside research before contracting with any company. Your hiring committee should investigate a given HOA management company’s reputation before offering to work with them or hiring them.

You can investigate a given management company’s reputation in a few key ways:

Check Google and the BBB

A simple Google search for the company’s name will immediately tell you whether the company is legitimate, whether they’ve been in business for a while, and whether the company operates in your area. This can all verify the information you learned in the interview with the management representative or executive.

The Better Business Bureau, meanwhile, is an important resource you can use to verify the reputation of an organization. If a given management company has an average to good rating on the Better Business Bureau, odds are that company may work well for your HOA. The better the rating, the better a pick that company likely is.

In addition, you should Google the company’s name and look for reviews from previous residents for homeowners association boards. If you come across a negative review, try to determine whether the review is legitimate and, if so, why the management company may have made such an egregious mistake in the past.

All of this can serve as valuable personal information to help you and your committee members make the best decision possible.

Ask Peers About a Company’s Quality

It’s also wise to ask peers about an HOA management company’s quality.

For example, if you are friends with someone on the HOA board for a different community and they’ve used the same management company, ask them their honest opinion about the organization. If they have only complaints, you may need to find a different HOA management company for your community.

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Read Through the Contract Carefully

If an HOA management company has an excellent reputation, it may be time to ask for or draw up a business contract. If you receive a contract from a management organization, be sure to read through the contract carefully.

For starters, you need to make sure there aren’t any excessive or exorbitant termination fee clauses that can drain the coffers of your HOA board. You should also make sure the contract includes all of the services and fees you discussed with the management company representative in your interview with them.

Hire a Lawyer to Review the Contract

At this stage, it’s wise to hire a lawyer to review the HOA management contract thoroughly. Unless you have legal experience, a trained legal representative will be able to scan the document and locate any loopholes or potential legal problems your homeowners association may encounter later down the road.

If your lawyer reviews the contract and says everything is good, you and your committee members can vote on signing it and partnering with the management company for the good of your community. If the lawyer points out a problem, you can always ask the HOA management company about the issue and see if they are willing to amend the contract. If they’re not, reevaluate the situation and consider partnering with a different organization.