Considering a New Management Company In With the New

Any number of things can happen to make an association question its choice of management company. The company the board originally hired might be making mistakes, or there might be personality conflicts that threaten the all-important management/board relationship. Or the reason to change management could be something as simple as a disconnect between the manager and the board members, who don't feel as though they are getting the service they signed up for. Even when the reasons are simple, however, changing management companies is not a transition to be undertaken lightly. It's a big decision, and a difficult process to navigate for even the most well organized, professional boards and agencies. It's important to make the decision with full knowledge of what's involved and a commitment to minimize disruption of a community's daily business.

The Love Affair Is Over

No board ever signs a contract with a management agency expecting that the relationship will last forever. But, just as some personal relationships occasionally go bad, so may those relationships between an HOA and its managing agent or firm. The reasons could be many—and given the headache it can be to switch after a years-long relationship, it should probably take more than just one for a board to seek better service elsewhere.

That doesn't mean your HOA's management company shouldn't work for it. Tony Smith, the current president of the Institute of Real Estate Management (IREM) explains that every association board transitions itself every few years, since it will rotate out with newly elected members. Because of this turnover within a board, a management company has to continually remind the client why they are the best fit for the job.

"After a few years, the sitting board may likely have little connection to the original decision to hire management company 'A' and may feel a need to seek alternatives," he says. "Management which fails to resell itself to each new board member should not be surprised when the account goes into play."

A board's grounds for seeking new management can be simply that they don't trust the old manager to do the job they need him/her to do.

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3 Comments

  • SHOUDN'T UNIT OWNERS BE ADVISED AT A MEETING OF THE CHANGE OF MANAGEMENT? AREN'T UNIT OWNERS ALLOWED TO BE AWARE OF THIS CHANGE AT A MEETING BEFORE THE NEW MANAGEMENT IS UNDER CONTRTACT? AREN'T UNIT OWNERS ALLOWED TO VOTE REGARDING THIS CHANGE?
  • The Board has the authority to change management. However they should be in compliance with the Open Meetings Act and ratify the decision at the next membership after they reached their decision in the executive session. My board just fired management and is now self-managing. They are calling themselves The Management Team which is a Breach of Duty. There isn't anything in our governing docs that says the Board is Management. It does state the board can self-manage and that is very different. They now want compensation. At the meeting I will stand in front of everyone and inform them the Board is Self-Dealing! They are telling us that they want free maintenance. Then they won't need a W9 because they won't show income!
  • If the management company is collecting money doesn't require a real estate license ?