Property management companies can be a great thing for condo and homeowner associations – or a nightmare if you select the wrong one. A reputable company will enhance your community’s premises, including pest control, landscaping, and special projects, provide emergency services 24/7, accounting, and keep up on local laws that might affect your community. Follow these do’s and don’ts to ensure you’re getting the right property management company for you and your community’s needs.
- ensure 24/7 rapid response and real time information
- verify years of service
- confirm the type of properties the PMC manages
- learn about back office capabilities
- verify special project capabilities
- confirm vendor relationships
- ask about Generally Accepted Accounting Principles (GAAP)
- skip the reference checks
- assume they know every service needed
- hire without asking all the questions
- forget the work orders
Fire, flood, outages – none of these things happen only between the hours of 9 to 5. Make sure your prospective property management company (PMC) is able to give immediate response. Also, many Associations’ boards are voluntary, which means the members are usually working during the day, and working on Board matters after hours. It is important to be able to provide 24/7 access to critical information as well. A property management company should provide real time, online accounting information for Board Members to access at any time, day or night. These kinds of provisions are critical for your Board, and for your property to effectively maintain the highest level of service for your homeowners.
Property management companies can alleviate countless challenges for HOA and condo associations – landscaping, renovations, accounting, governance, pest control and more – but not every management company is equal. When interviewing a potential property management company (PMC), be sure to ask how many years the company has been in business. Tried and true PMC’s are most likely to stay abreast of regulatory changes in the law, as well as keeping current with best practices in all areas of property oversight. Also, even if the PMC has multiple years in business, it is important to verify experience in each facet of oversight.
Too many associations are offered various services only to discover that while the PMC may have been in business doing landscaping, for example, for a number of years, it may be inexperienced with governance, pest control, or special projects. Find a PMC that offers complete management services, with experience in each area of oversight. Additionally, the company has relationships with a number of other vetted vendors to ensure you get quality work done in a timely manner, the first time.
If you represent an HOA for a gated community, ensure that the PMC you are interviewing is experienced with similar communities. Should the PMC you are interviewing have multiple condominium clients, and only one or zero HOA clients, they are probably not the best fit for your community.
The workers are out maintaining the landscape. The maintenance crew is beautifying the neighborhood, so all must be well with your PMC, right? Unfortunately, this is not always the case. The PMC may have skilled workers who specialize in their jobs “in the field,” but not necessarily in the back office. And while the back office is not always seen, it is most critical for your community’s well-being. Is the work order process streamlined? Is there an available representative in time of emergency? Who is responsible for overseeing governance and procedures between the PMC and the community, and what is his/her experience? Are the finances kept by a qualified, certified financial expert? Is the PMC up to date on all laws governing the running of an Association? These are all questions which need to be asked and verified before selecting your PMC.
Revenues for Condo and HOA Associations are on the rise. This year, most Associations surveyed said they plan at least one special project for their communities. Creating a new playground, enhancing entryways, redesigning landscaping – the projects are varied, and so are the skills required to complete them. Is your PMC capable of fulfilling the special project? Many times the PMC begins work on the special project with workers not skilled in the task; or tells you after they have been retained, that they are unable to perform the project and need to outsource, leading to additional spending. Verify the experience, skill and tools needed for any special project before hiring your PMC.
New landscaping, construction supplies, playground or pool equipment – vendor relationships are vital to a community’s needs and to a community’s budget. As your management company, the PMC will oversee the vendors during the implementation of new projects, repairs and updates. Knowing they have a good relationship with the outside vendor is key to not only ensuring consistency, but also keeping each project on time and, most importantly, on budget. Does your PMC regularly get multiple quotes for services? Does the management company have strong working relationships, or at least knowledge of, multiple vendors for the same service need? Ensure the company you hire has diverse properties and experience in the local industry, have had the benefit of working with numerous outside vendors, and know which ones will work well within budget, and which ones simply won’t work! This saves time in the vetting process, and in the overall project as well.
Does the PMC adhere to Generally Accepted Accounting Principles (GAAP)? GAAP are a combination of authoritative standards (set by policy boards) for given locales, and the standards used for most businesses. The GAAP in the U.S. is different from other countries, and even state to state has variances; however, the GAAP ensures that all accounting formats can be easily given and, most importantly, understood by the auditor as well as any certified accountant. Without the right GAAP compliance, simple exchanges can become a nightmare for the Board treasurer.
When interviewing a PMC, ask for contact name and number of current or former clients, and then follow through with the calls. Taking the time to ask their clients about the strengths and weaknesses of the PMC may take some time, but it could save you a headache later if you discover that the PMC is not a good fit. Sometimes there was a problem with accounting, sometimes it was deadlines for projects, poor communication – not every PMC will have a strong record of accountability, but the reference check is the best way to find out if the company will work out. A good company will be happy to share their lists of references.
Be sure to itemize all of the key needs you require from your PMC at the onset. As mentioned before, not all PMC’s are truly full-service, and a good one will let you know what they can, or cannot, manage right away. However, have your list ready when you meet with them to ensure they are aware of what you expect, and can assure you of what they are, or are not, capable of providing.
References, vendor relationships, capabilities, special projects, back office skills and years of experience – form your questions and be sure to ask them!
Ask to see a copy of the PMC’s blank work order. Many companies have vague descriptions with spaces to fill in the task. While this may appear “flexible” to some, it actually causes more mistakes over time. Different verbiage to describe the problem or need, incorrect location markers – each small “flub” can lead to a large mistake. Even a general work order should still include itemized details and concise checklists to remove any question, and to ensure each task is properly accounted.
Property Management Companies are the engine behind many well-run communities. They handle landscaping, pest control, special projects, governance and accounting; but not all PMC’s are equal. Before you hire a property management company, look for: Established years of service; back office capabilities; ability to handle all special project needs; and strong vendor relationships. Be sure to ask the right questions, check references, and explain exactly what you expect from your PMC, being as detailed as possible. The “open book” relationship with a verified and established PMC , will be the beginning of a prosperous community for everyone.