Before you hire any HOA management organization to play a big role in your community, you should sit down for an interview with one of their representatives or managers. In the interview, it’s important to ask certain key questions.
What to Ask an HOA Management Company Before Hiring Them
- How Many Homeowners Associations Do You Manage?
- Do You Exclusively Manage Homeowners Associations?
- Do You Manage Local Communities?
- How Long Have You Been in Business?
- Do You Have Any References I Can Check?
- Are You Fully Licensed and Insured?
- Are Your HOA Managers Qualified?
- What Vendors Do You Work With?
- Are You Up to Date with HOA Regulations and Laws?
- What Services Does Your HOA Management Company Offer?
- What is Your Fee Structure?
- How Do You Track Maintenance Tickets/Projects?
- How Do You Handle Communications?
- What is Your Average Response Time for Inquiries?
- How Does Your Company Respond to Emergencies?
- How Does Your Company Handle Accounting?
- How Do You Market Vacant Properties?
- How Do You Evaluate Homeowners?
- How Involved Will Your Company Be in HOA Meetings?
- What Elements Make Your HOA Management Company Stand Apart?
- Do You Offer Supplementary HOA Programs?
- What is Your Transition Process Like?
1. How Many Homeowners Associations Do You Manage?
If the company is large, the organization may oversee many hundreds of units and several distinct neighborhoods or HOAs. But if the company is relatively small, its workers will be able to focus more of their efforts on your community.
Any answer can be acceptable depending on the size and the resources of the HOA management company in question. If the HOA management company is cagey or doesn’t want to answer, consider it to be a red flag. You don’t want your community to settle for second-rate service because the HOA manager is trying to juggle too many balls at once.
2. Do You Exclusively Manage Homeowners Associations?
Ideally, your HOA management company will only manage homeowners associations. While there are some similarities to managing other property types, managing an HOA is not the same thing as managing a long-term rental property for a traditional real estate investor. There are different rules, different fee structures, and different services and implied responsibilities for all the parties involved.
If an HOA management organization exclusively manages homeowners associations, that means it’s more likely to have extensive experience in this area. It’s also more likely to provide excellent results for each of its clients.
3. Do You Manage Local Communities?
HOA managers that only manage local communities know the ins and outs of local real estate deals, local regulations, and the distinct problems and challenges that neighborhoods face. A management company that focuses on local properties in people is more likely to be a better fit for your neighborhood than a corporation than manages associations all over.
That said, a company that manages HOAs in many different communities is not necessarily a bad partner. It just means you need to get extra reassurances that they know how to run your particular community effectively and successfully.
4. How Long Have You Been in Business?
A low number isn’t always a sign that you should cancel the interview and look for someone else. But, if a company has been in business for a while, you and your fellow HOA board members will be able to find reviews and recommendations for that company more easily.
After the interview, double-check what the representative tells you in response to this question. If it turns out that they lied, take it as a sign that you should look for a different management partner.
5. Do You Have Any References I Can Check?
Good references will tell you all about their partnership with the HOA management company in question, including:
- What the company does well, including special perks
- Whether they had any issues with the company, like problems with response time or surprise fees
- Whether they would recommend the company to your HOA
6. Are You Fully Licensed and Insured?
Your state might require certificates and licenses for HOA management companies to be in business. You should only do business with a company that has the appropriate licenses and certificates, not only because it’s safer for your community, but also because it proves that they operate legally.
Furthermore, the best HOA managers will have at least one nationally accepted certification proving their knowledge and value. These include certificates from the Community Association Institute (CAI), of which the highest certification is Professional Community Association Manager (PCAM). That certificate is awarded to individuals, so if you sit with a company’s representative, ask whether any of the managers have that certificate.
The same goes for insurance. Good HOA management companies will be fully insured for their employees and for equipment.
7. Are Your HOA Managers Qualified?
As touched on above, the best managers will have PCAM certification. They’ll be knowledgeable and effective partners for your homeowners association. But other state certificates or licenses can also be good signs that a company is worth your time.
At this stage, consider asking which property manager specifically your association will be working with. If you’re lucky, you’ll be interviewing with them right now! But if you aren’t, ask whether you can contact them and have a separate interview with an individual, as they would likely be your point of contact going forward.
8. What Vendors Do You Work With?
Find out about the vendors they frequently work with. Some examples include:
- Cleaning companies
- Background check organizations
- Security companies
For example, if an HOA management company provides security services to a gated community, the management company might not do the security itself. It might outsource the work to a security agency to get the job done.
By asking which vendors an HOA management company works with, you’ll get a better idea of what work the company takes care of itself. Furthermore, you can look up the names and contact information of those third-party vendors to see if they have good reputations are not.
Note that an HOA manager working with vendors is not a bad thing. These vendors often have more specialized skills and can handle specific needs even better than the HOA management company can.
9. Are You Up to Date with HOA Regulations and Laws?
Your HOA board will likely be comprised of part-time volunteer members. Therefore, you and your fellow board members may not be expected to keep up-to-date with current HOA regulations and laws. Your management company should, though.
Any HOA management company worth your time and money should know the law. This is important so they don’t accidentally cause your community to break laws or rack up excessive fees.
Furthermore, a strong knowledge of local, up-to-date HOA regulations and laws allows the management company to provide your HOA board members with sound legal advice. If you’re ever unsure whether you can add a home to your neighborhood in a specific area, for example, your management company should be able to tell you.
10. What Services Does Your HOA Management Company Offer?
Most HOA management companies provide services such as:
- HOA dues collection
- HOA meeting organization
- HOA security and cleaning services
- HOA rules enforcement
- HOA marketing and tenant interviews
- Community organization
However, the exact duties and responsibilities an HOA manager has depend on its size and the type of company you contract with. A full-service HOA management company will provide all of the above services and potentially more. A remote HOA management organization may only assist with specific things, like financial management or HOA board administration.
It’s important that you and the HOA board you work with fully understand what you’ll get from a deal with an HOA manager. That way, you know what things you’ll still have to do after signing on the dotted line.
11. What is Your Fee Structure?
Most full-service HOA management companies charge both an onboarding fee and a recurring monthly fee based on the number of units they oversee.
The one-time onboarding fee compensates the company for all the paperwork and labor associated with taking on a new client community like your homeowners association. The monthly recurring fee is usually between $10 and $20 per unit managed, although it can be a lot more if your community is located in a high cost of living area. So, if your community includes 100 homes, your HOA may need to pay a monthly fee of between $1,000 and $2,000.
Be sure to ask both how much your HOA will need to pay each month, how much the initial fee is, and whether they are any late fees or extra expenses associated with the organization. Some HOA management companies charge extra fees if you break your contract with them early—get a solid number on this fee so you know the penalties associated with switching HOA management providers ahead of time.
12. How Do You Track Maintenance Tickets/Projects?
For example, does a potential HOA management company have a maintenance ticket system? Can homeowners submit maintenance tickets online? If so, can they view the maintenance tickets after submitting, make edits, or cancel tickets if they solve the problem themselves? All of these are valid questions that homeowners in your association might ask at some point.
Plus, how a company handles and tracks maintenance tickets and projects tell you a good amount about whether you can trust them to tackle maintenance projects on time. A company that doesn’t have a good ticketing or tracking system, for instance, may not be very reliable if a homeowner needs major help with their lights, doors, or plumbing.
13. How Do You Handle Communications?
Any good HOA management company worth your time and money will be communicative, plus offer multiple communication channels (e.g., a phone number and email address).
That way, you’ll be able to tell your community members how they can get in contact with the management company if they need to. If a company only has one communication channel or way to get in touch with it, it might be a good idea to look for a different organization.
14. What is Your Average Response Time for Inquiries?
From time to time, a homeowner in your HOA may need a fast maintenance fix. If the average response time from an HOA management company is within an hour, that’s a great sign. Even if the problem in question needs a little longer to fix than is ideal, at least the homeowner will know what to expect.
If the HOA management representative doesn’t have an answer for you, or if they admit that their response time isn’t the best, consider signing with a different organization entirely.
15. How Does Your Company Respond to Emergencies?
Before signing a contract with an HOA management company, ask how they respond to emergencies, such as fires, emergency maintenance requests, burglaries, and injuries.
Ask the HOA management representative if they have a specific time when they solved an emergency for a community member. Based on the answer and the story they tell, you’ll be able to extrapolate how the company will handle emergencies in your community.
You want an HOA management company that responds promptly, comprehensively, and confidently. The company needs to be able to provide resources or assistance to homeowners in need, plus employ people who know how to contact emergency services if an injured homeowner is unable to do so.
16. How Does Your Company Handle Accounting?
Do they have a dedicated accountant? If not, who handles the financial tracking and balancing at the end of each quarter or year? How does the company handle taxes?
In some cases, an HOA management company might not do the accounting at all. The company might leave that responsibility to the homeowners in a given association instead. There’s no right or wrong answer here – some HOA boards like to keep their own books. But others prefer to offload that work to the management companies they hire.
Be sure you know what the situation will be ahead of time. In some situations, it may be advantageous to partner with the HOA management company to handle all the accounting work. That way, both the HOA board and the management company see the same numbers and can check each other’s work for errors or issues.
17. How Do You Market Vacant Properties?
Different companies may use different technologies or techniques to market vacant properties. Some companies might have comprehensive networks of realtors and real estate agents, who they can rely on to get new prospective homeowners to the community ASAP. Others might use tech tools and platforms like real estate listings sites or community websites to spread the word about new openings.
In any case, you want a clear, confident answer to this question. Furthermore, it’s a good idea to ask what marketing materials the management organization will use when marketing homes in your association. If possible, ask to see those materials, especially if you are concerned about new tenants.
18. How Do You Evaluate Homeowners?
The best answer will be a mixture of:
- Thorough background checks
- Credit checks
- Calls to employers or previous references
These are all legal things that HOA management organizations can look into to determine whether an applying homeowner is a good fit for an HOA community. At this point, you can offer your advice or opinion about evaluating new homeowners for the association. As a community member, you know what your fellow board members are looking for and can pass that information on to the management company.
If the company takes your opinion into account, it’s a good sign. This is more common with smaller or more local HOA management companies, although some larger organizations may also be willing to work with HOA boards regularly.
19. How Involved Will Your Company Be in HOA Meetings?
Some HOA management companies are heavily involved in HOA board meetings and community events. They may take minutes, offer opinions, and organize efforts. Others are much more hands-off.
You may also prefer one type of HOA management company over another. For instance, if your HOA board is hurting for volunteers and you can’t take care of most administrative work by yourself, it might be good to have an involved HOA management company at your side.
In contrast, if your HOA board has plenty of people and volunteers, you may not want another presence in most meetings. Whether or not you and the prospective HOA management company match in this regard can tell you whether you should go through with hiring them or look for a different partner.
20. What Elements Make Your HOA Management Company Stand Apart?
Any good company should have at least a few suggestions or points to provide, ranging from low costs to quality of service to online reviews. If the company can’t provide you with any concrete answers, it’s not a good sign.
If possible, press the HOA management representative for details. The more specific they can be about their unique advantages or benefits, the better you and your fellow HOA board members will be able to make the best decision for your community.
21. Do You Offer Supplementary HOA Programs?
Supplementary HOA programs can include things like community-building events, fundraiser programs, and more. Regardless, any supplementary program should provide direct value to your community. If a large, well-known HOA management organization has some of these programs, inquire further; ask whether your community qualifies for them and, if so, how you can take advantage of them.
Depending on the programs offered, the HOA manager may offer pamphlets, booklets, or other guides to break down what the programs entail, whether they come with any increased costs, and what your HOA board members need to do to take advantage of them.
22. What is Your Transition Process Like?
You need to know about the transition process so you know:
- Whether you’ll be charged extra money for transitioning to a different company or terminating your contract on time/early
- What your HOA board members need to do to facilitate a smooth transition
- How long the transition will take
- What documents and information the HOA management company will take with it
- Whether your current HOA manager will provide any support for the incoming management company
All of this is vital information to ensure that your homeowners association doesn’t go too long without a respectable company overseeing things. It’s also important so you know that you won’t be charged any fees when the contract ends or if you want to leave the contract early.
But an HOA management company should never charge you a high termination fee if your contract expires naturally.