Running a homeowners association (HOA) is a big undertaking and involves a lot of moving parts. That is why many associations employ the help of an HOA management company to assist with day-to-day operations, administrative tasks, communication, vendor management, financial planning, and more. This can be a huge benefit to the board allowing them to focus on more pressing issues that cannot be delegated. It can also be advantageous for members because they are able to get assistance and information more quickly. Kuester Management Group offers a wide range of services and solutions to associations across North and South Carolina including providing HOA management services in Charlotte NC, Huntersville NC, Wilmington NC, Myrtle Beach SC, and Fort Mill SC.
But if your current management company is falling short of expectations, it can be frustrating, not to mention expensive. You are paying for services that you are not necessarily receiving, and it can hinder the success and enjoyment of the community. As a result, the board of directors may decide that it is time to fire your HOA management company and find a different provider. Here are some tips for going about that process and creating a smooth transition.
Steps for Switching HOA Management Companies
Before you move forward with firing your management company, evaluate the situation. What is it that the board is unhappy with? What challenges are you facing that the company is not addressing? Was there poor communication or follow through with tasks? Then think about whether the HOA has let the community manager know about any of these issues previously or if this is the first time they are being mentioned.
Consider talking to the management company and giving them a chance to resolve some of these problems and improve their performance. You may want to set a specific time period for these changes to take place. If the improvements are short-lived, or they are still failing to meet expectations, then cutting ties and finding a new HOA management company may be the best option.
Read Your Contract
Your management agreement will contain a lot of critical information. First, look at the duration of the contract. If it is nearing its expiration, it may be worthwhile to let the contract run its term and then not renew or extend it. If the reasons for wanting to terminate the management contract make it such that finishing out the rest of the term is not appropriate or practical, then check to see if there are any conditions or penalties for breaking your contract. You may be required to pay out a portion or all of the remainder of the management fee.
It can be a good idea to talk to your HOA attorney about your options and have them review the current management agreement as well. Together you can decide the best course of action and how to go about terminating the contract. If the management company was in violation of the terms and conditions, you may have legal grounds for getting out of the contract without penalty.
Provide Written Notification
The next step is to let the management company know that you are either ending your contract or not renewing. This should be done in writing so that there is an electronic or physical paper trail. The agreement may state how much advanced notice you are required to provide. This usually ranges from 30 to 90 days. It may also note how and where the notice should be delivered. Your attorney can help you draft this correspondence and make sure that is it legally sound and enforceable.
The HOA will want to ensure that it restricts access to accounts and changes its passwords as necessary once the agreement has been ended. This is especially important if the management company has access to bank accounts, financial documents, and other sensitive information.
Communicate with Members
Keep HOA members in the loop and let them know what is happening. Their dues pay for the HOA management services, so they should know if you are switching to a different provider and why. Reassure them that they will be informed about what they can expect and any changes that will impact them, such as where to send their payments or who to direct questions to.
Update Vendors
Don’t forget to notify any vendors that work with the HOA as well, as many of them probably interact with the community manager. You will want to let them know that you are switching companies, when your current management agreement will end, and then what company you will be transitioning services to, including the start date and any contact information they need for that company.
Search for a New HOA Management Company
Finally, you will want to start the process of finding a new HOA management company. Consider creating a committee so that members can be more involved and give their input. They can assist with developing an RFP, reviewing proposals, interviewing potential candidates, and selecting the provider they feel would be the best fit. You want a community manager that is as passionate about your neighborhood, its members, and doing what is in their best interest as your board is. The right partnership can make all the difference.
If you have any questions about HOA management services in North or South Carolina, including the process to terminate an agreement or begin working with a new company, feel free to reach out to Kuester Management Group.
