Homeowners associations and their boards should routinely conduct an HOA manager performance review. In doing so, they can objectively evaluate how their manager or management company is doing and decide whether or not it is time for a change.
HOA Manager Performance: Good or Bad?
Homeowners associations function much like a business corporation. But, instead of earning a profit, HOAs exist to serve their community. At the helm of every association, there sits a Board of Directors consisting of volunteer members elected into office.
The HOA board is responsible for day-to-day operations as well as more large-scale decisions in the community. Due to the immense amount of work and responsibility involved, it is easy to understand how an HOA might need help from a professional manager.
Smaller associations can usually get by with a self-managed approach. Larger associations, on the other hand, can quickly prove to be challenging to manage. But, that does not mean only large associations can hire an HOA manager or management company. In fact, most associations today are professionally managed.
With third-party assistance, though, comes the possibility of poor management. This is why it is important that boards evaluate their HOA manager on a routine basis.
Some HOA boards feel that it is awkward to assess the performance of their current manager or management company. But, this type of thinking essentially places the manager on a pedestal, making it impossible to rate them at all. Just as an employer conducts regular performance reviews of their employees, it is imperative for HOAs to assess the performance of their managers.
How to Conduct an HOA Manager Performance Review
Conducting a performance review may sound easy on paper, but a lot more goes into it than most people think. Board members should not let their own personal views and feelings cloud their judgment. Just because an HOA manager is nice or easygoing does not mean they are doing their job well.
Here is how associations can do their own HOA manager performance assessment.
1. Use the Contract as a Guide
Every association signs a contract with its manager or management company. That contract should tell boards everything they need to know in terms of what the manager’s duties are. Go through each responsibility and determine whether or not the manager has fulfilled it in a satisfactory way. It is also a good idea to maintain a log throughout the year. This way, boards can look back on what transpired and evaluate from there.
2. Check for Value Outside of the Contract
An association’s manager or management company should obviously follow what is included in the contract. But, boards should also consider the things that are not in the contract yet still offer value.
First of all, boards in professionally managed associations should not feel like they are working too hard. Unless the contract stipulates minimal services, most of the operating and administrative work should fall under the responsibility of the manager.
Boards should also take a look at other aspects of community management. If an HOA manager is getting the association better deals on services or staying informed on law changes, that is a plus. It is a good sign if a community is generally happier than it was before hiring a manager.
Although the contract should outline the manager’s roles, it usually does not include the skills that the manager innately has. For instance, an HOA manager may be good at communicating, always keeping the board up to date without being asked. An HOA manager may also be great at problem-solving or dealing with people. These are traits that are typically harder to quantify.
3. Ask Homeowners
An HOA manager does not only communicate with the board. They also interact with other members of the community.
Sometimes, a manager might act friendly towards the board but will show an entirely different attitude when dealing with homeowners. As such, boards should also ask community members for feedback and take those into account.
4. Send Out an RFP for Comparison
It is often hard to evaluate an HOA manager or management company when boards have nothing to compare them to. A good way around this is to send out a request for a proposal to other companies. Of course, boards should inform their current management ahead of time that the RFP is only for evaluation purposes. It does not automatically mean the association is looking for a replacement.
An RFP will allow associations to compare prices and services. Is the current HOA manager providing high-quality services at a competitive price? Keep in mind, though, that just because another company offers lower prices does not mean they are necessarily better. Boards should also take expertise and experience into consideration here.
5. Outsource the HOA Manager Performance Evaluation
For boards that would like to take a hands-off approach to the evaluation, outsourcing it to a consultant may be the best option. There are consulting firms or independent consultants that provide HR services, including performance reviews of HOA managers. Such services, though, are not free.
Start With a Detailed Contract
Many associations conduct an HOA manager performance review only to find unfavorable results. Most of the time, this is due to vague or unspecific terms within the contract. To ensure an HOA gets the full benefits of a management company or manager, it must begin with the management contract.
Every management contract should detail what services the association should expect to receive. This includes responding to homeowner complaints, collecting dues at regular intervals, overseeing maintenance, and the like. The contract should also outline other things, such as:
- How quickly a manager must respond to a board member or homeowner
- The standard of maintenance required
- How often the manager should update the board on association business
- Whether or not the manager should attend board and/or annual meetings (and how often)
- What and how often financial statements should be prepared (if any)
The Bottom Line
It is important to regularly conduct an HOA manager performance review. In doing so, an HOA can determine whether or not their current management is meeting their expectations as outlined in the contract. If their existing manager is unsatisfactory, they can ask the company for a replacement or hire a new company altogether.
Elite Management Services provides high-quality management services to homeowners associations of all sizes. Call us today at (855) 238-8488 or contact us online to request a proposal.
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