Property values and quality of life are in the balance with every board election and vendor interview, when you’re running an HOA. Search committees will hear countless sales pitches about innovative technology and competitive pricing. It’s hard not to get swept up in a beautifully crafted sales deck — but those glossy pages won’t weed out problematic contractors, or pick up after unruly neighbors.

The truth is that there are dozens of questions you should ask before signing a contract with an HOA management company. Ultimately, you want to know if they have your best interests in mind.  You aren’t just hiring another vendor — you’re hiring an HOA management company to become an extension of your board. Today we’re looking at how to weed out the companies that aren’t right for your neighborhood.

Ask the Right Questions to Evaluate Your HOA Company

Look beyond dollar signs and scrutinize the way your potential HOA company runs their business. The following questions will help your community land an HOA management company that values transparency and fits your neighborhood’s unique needs.

Are You Licensed and Insured?

Let’s get that out of the way first. If your HOA management company cannot provide proof of licensing and professional liability insurance, what else might they be hiding? Errors and omissions insurance covers the association if something goes terribly wrong in the management firm’s judgment. 

Each state has specific requirements for community associations, so make sure they can practice business legally in your area. Ask to see their fidelity bond certificate, which safeguards your association from anyone stealing checks or funds from the HOA company.

If they hesitate to hand over these documents during your first meeting, consider it a red flag for the board members present.  

What Is Your Staff Turnover Rate?

One of the most common complaints of board members is how often community managers come and go. It’s frustrating — you spend all this time getting to know who oversees your neighborhood’s daily tasks, just to have another intro meeting six months later. 

Inquire about the staff turnover rate at every HOA company. Frequent turnover can indicate internal culture issues and even manager burnout. When HOA management companies don’t invest in their managers, your neighborhood will eventually feel the impact. What you want to see is a track record of long-term employees, manager tenure before you allow them to work for your community association.

How Many Communities Do You Manage?

Bigger isn’t always better! Your HOA company will have multiple properties under management, that’s a good thing — but how many? The manager who will serve your association could also be serving fifteen others. Will your emails and phone calls really stand out to them? Ask how many communities each manager is responsible for internally. You want your neighborhood to be their top priority, not just another community in a database.

What Software and Technology Do You Use?

If your HOA company still has homeowners writing you checks and submitting physical applications, call it quits! Don’t worry about learning how to use new technology — your HOA management company should be providing a platform that educates. Residents should be able to pay their HOA fees, check their account balance, and submit work orders all from their phone. As a board member, you should be getting dynamic financial reports and easy-to-analyze data. Transparent HOA companies build that transparency by making information accessible to everyone.

How Often Are Your Inspections?

Enforcing covenants isn’t always easy or popular, but someone has to do it! Ask your prospective HOA company how often they walk their properties for compliance. Monthly? Bi-weekly? Will they send someone out when you submit a complaint? Regular inspections prevent your community from falling into disrepair and lost value. Try to get an example of their inspection reports to be sure they’ll be thorough about notifying the board of violations.

What Services Does Your HOA Company Offer?

HOAs range from financially-driven organizations to communities looking for a full-service solution with on-site staff. It’s important to know if your potential HOA management company will send someone to your board meetings, prepare your annual budget, or manage the annual meeting. Some community management companies only charge a low monthly fee, but then charge extra to “stuff your envelopes” or return your phone calls. Having your HOA services itemized will save your community thousands of dollars and headache at the end of the year.

Is your HOA Company Current on HOA Regulations & Laws?

Property laws are always evolving. This is especially true for associations located in high-growth counties like Denver, CO or Travis County, TX. Your HOA management company should be up-to-date on local legislative changes to keep your board out of trouble and in compliance. How do they plan on providing your community with a comprehensive assessment as laws continue to change? Ask about their team’s continuing education opportunities.

Do You Have Any References?

Ask for success stories! Every reputable community association management company should be able to provide anecdotal and professional references at the drop of a hat. Instead of accepting the first name they throw out, ask to speak with neighborhoods similar to yours in size and age. When you call them, ask about response time and how they handled an emergency or drastic project. If they need to improve, you will hear about it. High employee and community retention rates are both great signs.

How Do You Handle Delinquencies?

Every community manager knows collections are important, but how does the HOA company handle delinquent accounts? Do they have an in-house program? Are they partnered with a certain law firm? It’s essential to know how your HOA company will communicate with homeowners who fail to pay on time. You want to ensure your association can collect enough revenue to maintain the property without negatively impacting the homeowners that pay dues consistently.

How Do You Manage Maintenance Emergencies?

Nobody likes to think about worst-case scenarios, but they happen. What happens if a pipe bursts from the community pool at 2 p.m. on a Sunday? Will you need to call your HOA company first, or will they alert you? Verify the HOA company has a 24/7 emergency hotline that routes to an actual person. What is the process for notifying you and dispatching vendors outside of regular business hours? You want to rest easy knowing your HOA company has your back during times of crisis.

Do You Manage Vendor Contracts?

Vendor management is a huge responsibility. Not only do you need to ensure every vendor your HOA company works with is properly insured, but that they’re providing the best service. Ask how vendor contracts are stored, documented, and rebid each year. Proper documentation allows your HOA company to stay on top of contracts before they expire, and holds vendors accountable should a problem arise on your property.

Partner with Goodwin and Company | Your Partner in Community

Searching for the perfect management company can be stressful, which is why we strive to make the process easy for you! At Goodwin & Company, we don’t take your business for granted. Our contract terms are month-to-month because we are confident in our service and want you to be happy. With over 45 years of experience serving Texas and Colorado homeowners, we understand what your community needs to succeed.

Whether you are a millennial looking to simplify the way you interact with your HOA or a seasoned board member familiar with HOA management, we can help. That’s why we offer customer service you can trust, professionals with experience, and the leading HOA mobile app, TownSq. From accurate financials delivered on time, to consistent enforcement, let us manage the small stuff — so you have more time to enjoy your community.