When Does Our Self-Managed Association Need a Management Partner? 6 Questions Your Board Should Ask
Even the most successful HOAs and condo communities can’t do it all. But how do you determine the type of support you need, and when you should hire a management company? An excellent place to start is by assessing your association’s needs to help you make the right decision. Read on for 6 questions you should ask before choosing a management partner.
1. HOW IS OUR BOARD’S TIME BEING SPENT?
Does your board manage day-to-day tasks, oversee vendors, take calls and handle routine (or surprise) maintenance projects? This may not be the most effective use of your time. Effective and thriving boards are not burdened by day-to-day tasks; instead, they invest their time developing a solid vision and effective policies that propel the community forward.
WHEN TO CONSIDER A MANAGEMENT PARTNER:
A professional management partner can help boards use their time most effectively by providing full-time associates that help manage day-to-day tasks, including your association manager, assistant manager and support team, to provide responsive service to both your board and your residents. They also provide access to a host of local and national resources and staff that can help make your job easier, including financial professionals, executive leadership and human resources. This allows you to operate as a “policy board” and spend your time making decisions that can profoundly impact the association for years to come.
"Boards can benefit greatly from working with a professional management company," said Jeff Musselman, vice president at FirstService Residential. "The right management partner will provide support, resources and qualified staff, allowing them to focus on the community’s bigger picture.”
2. ARE WE MAXIMIZING OUR BUDGET AND FINANCIALS?
As a board member, you know the importance of maximizing your budget – both operating and reserve – and making wise and timely financial decisions. Some associations rely on outside vendors or committees, while others depend on internal knowledge and expertise on the board itself. These methods are certainly valid, but there are other aspects to consider if you want to obtain the most value for your community or building.
WHEN TO CONSIDER A MANAGEMENT PARTNER:
Many associations desire more in-depth financial guidance, protection and value from a management company. A full-service management company can provide dedicated accounting support, insurance services, investment guidance and budget planning specific to your association. For instance, FirstService Financial works exclusively with FirstService Residential’s managed communities to provide dedicated financial services, including cash management, investment solutions, loans and insurance services.
Read this helpful article to learn how a property management partner can support condo and community association boards.
3. DO WE HAVE THE SUPPORT NEEDED TO SET A VISION AND ACHIEVE OUR GOALS?
Creating a vision and a strategic plan are crucial to establishing and strengthening your association now and in the future. Your association will be in excellent shape if you have the resources and support to develop your vision, evaluate your plan, and accomplish your goals, even as new board members enter the board.
The “rudder that steers the ship”
Why create an association vision? Watch this short video to learn why it’s important for your board, your budget and your future.
WHEN TO CONSIDER A MANAGEMENT PARTNER:
The development of your vision and strategic plan often requires outside guidance and various perspectives and best practices from like-minded communities. An effective management company has the resources and in-depth network of support (such as finance, operations, technology, training and staffing) to help you establish and execute your plan. Most importantly, they will work closely with your board to ensure your community follows the goals and objectives of your association.
4. ARE WE EQUIPPED TO HANDLE A MAJOR EMERGENCY?
An association that is well-run has the resources, tools, and plans in place to handle an emergency. Furthermore, they are financially prepared for the unexpected costs associated with one.
WHEN TO CONSIDER A MANAGEMENT PARTNER:
A major event can put a self-managed property at risk or put its budget under severe strain. In these situations, it's important to have a management company that can not only execute your emergency plan, but also provide guidance. The right management partner can help communities and buildings develop comprehensive emergency plans and use technology to distribute on-demand communications (e.g., email, text messages, autodialers, etc.).
“Communities and buildings must be prepared for the unexpected,” said Andy Sorenson, vice president at FirstService Residential. “The right property management company can build and support a robust emergency plan tailored to a community's needs making it easier to respond during a crisis."
Hurricane and storm preparation
From sourcing supplies to lining up recovery providers and developing detailed communication plans, FirstService Residential equips boards with the tools and resources needed to properly prepare for storms. Watch this video to learn how to prepare your residents and property before, during and after a storm.
5. IS OUR ASSOCIATION TAKING THE RIGHT STEPS TO REDUCE LEGAL RISK?
To help protect your association from liability and risk, your board should collaborate with legal counsel to ensure compliance with federal, state and local laws, as well as a management partner to assist with lawful employee processes (e.g., recruitment and benefits). Does your board know how to incorporate properly? Did you know your vendors are required to sign a W-9 tax form and that you must issue them all 1099s? Do you carry D&O (Directors and Officers) insurance?
WHEN TO CONSIDER A MANAGEMENT PARTNER:
Partnering with a management company can help reduce risk in many areas. If board members make critical errors or omissions, individual property values may suffer, and board members may even face personal liability. The most effective management companies have access to in-house legal and risk experts who educate managers and board members on the latest legislation that may impact their association. The right partner will also support recruiting, hiring and training staff, making sure to comply with all necessary laws.
6. WHAT LEVEL OF SERVICE DOES OUR COMMUNITY OR BUILDING NEED?
Many critical responsibilities fall to board members in self-managed associations, such as finding and vetting vendors and setting up a community website. The time spent on less-critical tasks can, however, limit the time available for more-critical responsibilities. Your association's property values will remain strong if your board has the experience, knowledge, and time to fulfill their duties.
WHEN TO CONSIDER A MANAGEMENT PARTNER:
Partnering with a management company can improve the resident experience and elevate your association's reputation, which can have a significant impact on property values. Service and responsiveness at this level require 24-hour attention, experience, and knowledge. A team of specialists is also required, including operations, maintenance, finance, collections, legal, lifestyle, and customer service.
IS A PROPERTY MANAGEMENT PARTNER RIGHT FOR OUR ASSOCIATION?
As a self-managed association, the decision to partner with a management company is not one to take lightly. However, by evaluating your community’s needs, determining the level of service residents require and understanding the risks and benefits, you will be able to make a long-term and fulfilling decision.