I know everyone usually thinks its easy to change management companies that work with your community. Its not as simple as sending an email and everyone will live happily ever after. Here we have compiled some things to actually look out for when you finally decide that your community wants to make a change. The first thing people have to understand that in Florida in order for a property management company to manage a HOA or Condo community they need to have the specific licenses and hopefully the proper insurance or bonds. These licenses tell the community that the company or person they have hired understands the changing FL statutes and can professionally manage their association. So before you ever let go or your current manager or management company please make sure that you verify this information with the new company.
Notice:
The first thing you want to do is give notice to your current manager or management company that you will not longer be using their services in the future. Before you do this take a look at the contract that was signed to get a better understanding as to how the notice needs to be sent out and what the time frame would be to relinquishment. Check if you have to give a 60 day notice or a 90 day notice. You may have to give no notice at all depending on how the contract is set up. Please don’t go through a process of looking for a new management company unless you are sure this is the right choice. Wasting other companies time may hurt your community in the future when you really need the help.
Tip: If the current management company has no way of receiving feedback for the work that they are doing, alerting them that you are looking to cancel your contract with them may help them see the light and provide the service that you expect from them. If not it may at least open up a channel of communication that can be used to explain your grievances in more detail.
Cancellation Fees:
Does the Contract that was signed have cancellation fees included? If so, what would it cost you to cancel the contract? These are some of the choices that you have to think about when looking to change management companies. How bad do you want to get rid of your current manager? Is the service so bad that you are willing to pay the fee and get someone else? In some situations it might be better for the community to wait till the right time to cancel the contract. Other instances may be dire and the community may want to bite the bullet and get ride of the management company.
Committee or single person search:
Some communities set up a committee to search for prospective management companies to get quotes from. This way frees up the board to handle the day to day operations without having to deal with pushy sales men. This can also weed out the best from the list of prospects. If you don’t have enough people to create a committee then having one person in charge of finding the management companies to get quotes from will help.
Three of a Kind:
After you find the management companies to get the quotes from you then pick the best 3-4 out of the lot. This is normally done by requesting a RFP (Request For Proposal) from the top 3 or 4 companies that you would like to give you a formal quote. The Request should entail what services you are looking to have and what information your would need from the company. Using a RFP helps streamline the quoting process while also making sure that the quotes are comparable. After that is done then you will hold a meeting with the board that may include the management companies to go over the services and vote on who the board would like to choose. The time the board spends together going over the different services and the pros and cons of each offer.
Transfer Process:
This usually happens within 30 to 60 days before the termination of the previous company. This is a usually a scary time for most communities because they want to make sure that all of their documents are transferred properly and nothing is missing. By law the management company should transfer all documents that they have over to the new manager. But you have some questions to ask your self. Do they have any documents? For boards who leave everything to the management company they don’t know what the company has kept records of. In some major cases the management company hasn’t kept record of anything at all! For the good management companies that do their job properly they should have everything in a online files or paper format. Also update all bank accounts that the previous management company would have access or control over. This can be as simple closing the account or removing the rights granted to the current manager. Some banks have a simple form that property managers and board members fill out that will transfer and update the account information. This is also a good time to update the signature cards on the bank account if it hasn’t been done in a while.
TIP: Save the major documents that you receive from the management company (monthly reports, budgets, bids from contractors). If you have an issues come up and you receive nothing from the management company at least you will have the documents that you previously received.
Notices to homeowners:
One of the last things to make sure of is that all homeowners know of the change in managers or management companies. This helps keep everyone on the same page. You don’t want homeowners still making payments to the wrong company. You also don’t want them calling the management company for issues going on in the community only to be told that they called the wrong place. This is usually done by the new company taking over or the company that is leaving. Notices can be simple and straight to the point. You don’t really need a newspaper sized explanation as to why you are switching. You just need to alert the homeowners of the changes.
Tip: Homeowners that have not updated the association with new addresses can cause them not to know there was a change in management. This is especially true for residents that live out of the country. Make sure to keep and updated email contact list to help with the transition.