Hiring New Management When it’s Time for A Change!

There is an old adage claiming that “The more things change, the more they stay the same.” This is not a happy thought for a board or association looking to change property managers or firms. To go through the turmoil involved in replacing a management company and still not achieve the desired changes is a costly experience in not just dollars, but time and frustration for the board and indeed, the entire community.

If real change is the desired result, how does a board or association avoid merely swapping out one set of problems for another? Is there a formula to assure a successful change, or guidelines to ensure a positive move in the right direction? What questions should be asked of a prospective new management company before signing on the bottom line? What are the red flags to watch out for, and where and how do you start the search process? Since board members are generally volunteers, just getting started may be a challenge.

Begin at the Beginning

When a management change is imminent, the best place to start the question-and-answer exchange is right at home with the board. Collectively, the board—or hiring committee, in some cases—must fully understand what is not working with their community's current firm, and what changes are expected with a new company. Perhaps the very first question to be asked should be “Is there really a need for a different property management company, or is the problem more a personality conflict with the assigned manager?” If a different agent within the same company might better communicate and work with the board, the 'change' could be as simple as just trading the current manager.

By taking a critical inventory of the community's issues and expectations, a board can identify whether their dissatisfaction with the current administration is located primarily with their particular manager, or – if, for example, repeated requests made to the management office itself have gone unanswered or have been addressed unsatisfactorily – the trouble is deeper and at a company level. By identifying the areas where problems have occurred, the time frames and individuals involved, a board can develop a better idea of what is working and what must change.

Whether the issue is individual or more systemic, it's a good idea to have your association's attorney review the current contract early in the information gathering process to determine the best way to legally separate from the property management company if necessary, and to identify areas for positive legal change. When a decision is made to bring in a new management firm, the attorney should again be consulted for a review of the new contract and documents before anything is signed; while some board members may argue about the expense of involving the attorney in the process, some due diligence by a legal pro can spot potential problem areas and costly pitfalls, and head them off at the pass.

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