The board of directors that you are serving on has decided that it should go out for bids for a new management company and you agreed to head up the selection committee. Where should you start?
The following are some tips and recommendations that may make your job easier:
- Finding Management Companies to Provide a Proposal—When beginning your search, think of the management company as an integral part of your team. It will become the face of your association and carry out tasks that you assign. One of the first places to start your search is the Rocky Mountain Chapter of CAI. Go to www.hoa-colorado.org, click on Membership, Service Providers and then HOA Management Firms. Additionally, ask your friends that live in other community associations for recommendations, ask your association’s legal counsel for referrals or go directly to the vendors that provide services for your community. Each of these resources will be able to help you.
- To Write a Scope of Service or Not?—Consider how the bids will be obtained. Many boards take time to write a very detailed scope of work that details exactly what they are looking for. Other boards simply make calls to management companies and ask them to submit a proposal. Both methods work but consider some of the pros and cons before proceeding:
If you have a very short timeline to review bids, simply reaching out to management companies can speed up the process. You will need to be prepared to answer questions regarding your association, which may include: the type of community, the amount of dues, how many serve on the board, what amenities are offered within the dues, how often board meetings are held, questions regarding delinquencies, what landscaper you work with, who your legal counsel is, etc. This provides the basis for a management company to prepare its bid. The initial call to the management company can be informative and provide a basis as to your initial reaction to working with them in the future. On the other hand, if this task has been assigned to more than one person on the selection committee, the information provided to management company representatives may be vastly different and the proposals may reflect that difference.
Writing a scope of services prior to requesting a proposal will provide the detail that you may be looking for. While it does take time to develop the scope it may be well worth the investment in time so that you can compare cost of services from company to company.
The basic scope of services typically includes the collection of assessments, payment of invoices, attendance at board meetings and the annual meeting, preparation of meeting minutes, providing a board information packet prior to the meeting, inspections, reporting of violations and maintenance issues, obtaining bids, working with all vendors and legal counsel and “other duties as may be determined by the board.” Those are the basics but times have changed so don’t forget that technology plays a huge part in providing services. Make sure to include items such as maintenance of websites, e-mail communication with board members and homeowners, newsletters that may only be sent out by email, etc.
Now the Request for Proposal has been sent out and returned; the selection process starts.
- How do you narrow down your selection?—While there can be a comparison of services based on the written documentation received, my guess is those proposals will have many similarities. Above and beyond the basic services that are offered, was information included as to fees for items to be reimbursed like postage, copies, storage of records, additional meeting time, etc.? These charges can vary quite a bit from company to company. It is worth looking at the reimbursable items with a little extra attention. What did you learn about the management company, how long has the company been in business or what is the experience behind the management company, what are its values and what can it bring to your association?
While all of the above plays a huge part in the final decision to be made, I have found over the years that the most important aspect of selecting a new company is the initial conversations with the management company whether by phone, email, and, most importantly, face-to-face. Change is never easy but the relationship that is established from the initial meeting will be the key in establishing the working relationship in the years ahead. Don’t hesitate to ask questions; you want to make sure you are making the best decision for your community.
Good luck in your search!!