Selecting the Management Company and Manager
Updated: May 27
Awarding the Management Contract
What are you looking for in a management company for your association? If it’s a low price, then you may get less than stellar service. The truth is most companies will provide an association with similar pricing. Most of the time the pricing is based on a per-door basis, and you are left with colorful, long-winded sales brochures telling you how great their services are.
I recommend you ask some questions that will translate into the level of service you are expecting. Here are some of the more important concerns:
1- Will the management company provide the financial services? (Paying invoices and collecting dues)
2- Can the association expect to receive the financial statement monthly by the 15th of the following month?
3- Will the management company provide board member training?
4- What level of experience will the manager have assigned to the property?
5- Will the board have a choice in selecting the manager?
6- What is the intended salary for the manager?
7- How many meetings is the manager obligated to attend per month?
8- Will there be a monthly management report from the assigned manager?
9- Does the management contract provide for bidding of minor work and major projects?
10- Does the management contract provide for construction oversight? If not, how much will that cost the association?
11- What is the background of the corporate leadership? Are they experienced managers, or do they have expertise in other fields such as accounting?
12- What are the services expected after hours and for emergencies?
Asking the questions above will give a better understanding of the service you will receive. Depending on whether you have an on-site manager, or a portfolio manager will also give you an idea on response times and services. Many associations that have portfolio managers assigned do not realize that their manager may have another ten or twelve properties they manage. It’s good to know how much of the management contract dollars is going to the manager.
For example, many portfolio HOA properties may pay as little as $800 per month for financial and management services. Many are under the impression that most of that money goes to the manager. Unfortunately, less than twenty-five percent of that will go to the manager. Take that example of $200 per month for a manager to go to your property, meet with vendors, provide violation reports, attend meetings, and respond to residents. How does two hundred dollars even come close to paying for fuel and tolls? These are details many management companies don’t want to share with customers for fear that they may be assigned an overworked manager.
While the management company you are considering may be fantastic, the board must know the details above. There are many a great manager working at small unknown management companies. There are also huge national management companies with a great sales package, that will provide a sub-par manager. The board’s main concern should be the manager’s experience, education in the industry, and that their salary is well within the current standards. The manager is the person the board will interact with daily and count on for the most current information.
What To Expect From The Manager
The role of a community association manager is to implement the decisions of the board of directors; administer the services, programs, and operations of the association within the policies and guidelines set by the board; fulfill the terms of his or her contract or agreement; and provide information, training, and, often, advice and assistance to the board as it sets policies and makes decisions.
A manager’s authority and responsibility are defined and limited by:
• Governing documents that define the authority of the board to enter into a contract (some governing documents also require the board to retain a community association manager).
• The manager’s management contract or employment agreement with the board.
• Actions of the board that delegate specific authority and duties to the manager
It is important for the board to be proactively involved in selecting the manager and possibly other employees with greater responsibilities. For many of the positions at community associations, the management company will conduct the interviews and ask most of the qualifying questions. If the board is involved in the interviews, some standard procedures apply.
Interviewing Employee Candidates
Having the right employee join your association’s team is critical. Experience will tell you that the correct fit for your team is someone that will encourage teamwork and have a generally good attitude. While the staff is mostly selected by the agreed upon subcontractor or the management company, when it comes to hiring the manager, the Board usually gets involved in the selection process.
The Board’s participation in interviewing potential employees should proceed only after the participating board members are educated on the do’s and don’ts of EEOC guidelines. Board members should use their management resource to assist in conducting interviews. A Board, or board members should not conduct interviews without assistance or participation from the management company or their attorney. The potential liability is quite great. If the wrong questions are asked, the association may be looking at a lawsuit that could have been easily avoided.
Prior to the actual interviews, the pre-employment process also has a few laws to be followed. Per the EEOC’s pre-employment guidelines, the information obtained and requested through the pre-employment process should be limited to those essential for determining if a person is qualified for the job, whereas information regarding race, sex, national origin, age, and religion are irrelevant in such determinations. It is illegal for an employer to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.
You will want to set a process whereby every candidate is asked the same set of questions. This will allow for a fair selection of the best qualified person for the position. Asking different questions may lead to suspected discrimination if the questions differ greatly. You should not ask questions that relate to any of the following:
o Family Status
o Gender or gender identity
o Birthplace / Country of origin / Geography
o Sexual orientation
o Marital Status
o Salary history (in some states)
Taking the preceding information into account, here are some sample questions or comments that should NOT be asked:
How many children do you have?
Do you plan on having more children?
Are you married or divorced?
What is your maiden name?
Are you Latin (Hispanic)?
What country are you from?
Do you spend a lot of time with your kids?
What type of discharge did you receive from the military?
How many times have you been arrested?
Although one might think it is easy to follow these guidelines, the conversation can get away from you quickly if you establish a good rapport with the candidate. Try to stick to the questions that should have been prepared prior to the interview. It’s natural to relax and begin what is usually small talk, but it should be avoided when conducting a formal interview.
Once employed, these laws protect employees against employment discrimination when it involves:
· Unfair treatment because of your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.
· Harassment by managers, co-workers, or others in your workplace, because of your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.
· Denial of a reasonable workplace accommodation that you need because of your religious beliefs or disability.
· Retaliation because you complained about job discrimination or assisted with a job discrimination investigation or lawsuit.
· To review the laws in detail, go to www.EEOC.gov and surf their site. You may also wish to google phrases such as “questions to avoid when interviewing a candidate” or “EEOC laws that apply to interviews”. Seeing that each state may also have specific laws in place, you will want to ascertain those details as well.
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Selecting the Condo HOA Management Company