Switching management companies for your community association may sound like a rather daunting task, and, in many ways, it can be. Though you may not be satisfied with your current management partner, making changes can be difficult. Selecting a new company will involve carefully reviewing your current management contract, researching new management companies, requesting proposals, and deciding who you'd like to bring on to manage your community. Any reputable professional management company will have an onboarding process in place that will allow your board to be relatively hands-off during the transition once you've signed your new contract. Keep reading for reasons you may be considering a change and some tips on beginning the process.

Why make a change?

Before diving into some best practices for transitioning to a new management company, let's discuss why your board may consider a new management partner.

Lack of communication

Is it impossible to get in touch with your current management company? Or, when you do get in touch with them, do you get passed around to eight people before you speak to the person who can help you? Not only is that inefficient, but it's also impolite. Instead, you need a management partner who will promptly respond to calls and emails. And, if they're unable to answer your questions or solve your issues quickly, they will keep you updated on where they are in the process of getting the information you need.

Another issue might be that the only way to contact them is by phone. Though being able to chat with someone on the phone is still very much necessary, most people like to have the option to send a quick email. Suppose your current management company doesn't have an online portal that allows you to send messages to your community manager, submit maintenance requests, and keep track of communication. In that case, it may be time to partner with a more modern company.

Lack of financial transparency

One of the primary responsibilities of a professional management company is assisting the board in keeping up with the association's financials. And the company must provide 100% transparency to the board when handling their accounts. Does your current management company regularly provide you with financial reports? Do you know when to expect those each month, or do they show up randomly? Do board members have 24/7 access to the community's financial information? If you've answered no to those questions, you may want to consider looking for a new management partner (and may also want to take a hard look at your finances to ensure everything is as it should be).

Outdated technology

As we said earlier, online portals and other electronic communication means are vital for operating a business efficiently, but it goes further than that. For example, does your management company provide convenient ways to pay your assessments online? Are you able to submit ARC requests electronically? Are they able to meet with you via Zoom or other similar platforms? As we all learned during the Covid-19 pandemic, the ability to conduct business and other day-to-day activities online is crucial and, sometimes, necessary.

Getting Started

So you've decided to start looking for a new management company, but what do you do next? Here are a few tips on getting the process started.

Review your contract and speak to your attorney

When considering switching management companies, the first step you should take is to review your current contract. Does it expire soon? If so, then you need to send your cancellation notice. Most contracts have a deadline by which you have to submit your cancellation (perhaps 30, 60, or 90 days before it expires), so be sure you take care of that promptly.

Are you in the middle of your contract and seeking to terminate it? Unfortunately, that can make things more difficult as each company's contracts will have different requirements for cancellation. For example, some may require termination fees or have other stipulations surrounding early termination. As a result, early termination can get complicated, so the best thing your board can do in this instance is to consult your association's attorney to help you explore your options.

Researching new companies

Once you've figured out when and how to terminate, you'll need to research some other management companies and decide which ones may be a good fit for your community. Fortunately, you can do this pretty quickly online. Any reputable management company will have reviews left by current and previous clients that should give you insight into how the company operates and what others have experienced under their management. You may also want to talk to some friends who live in communities managed by the companies you're vetting for feedback.

Request a Proposal

If you've decided on a few companies you'd like to learn more about, the next step is making contact and requesting a proposal. This stage of the process will allow you to tell the potential new management company about your community and provide them with the details they need to provide a proposal.

Proposals will differ for each community as pricing can vary depending on the size, location, and type of community. The proposal will also give you some insight into what services the new company can provide and give you a chance to think about your community's needs and budget.

So, what information will you need to provide the potential new company to get the ball rolling? They'll typically want to know:

Contact information for the board member who is submitting the request

The community's location

What type of services you're looking for (e.g., full management or accounting services only)

General information such as how many homes your community has, what types of homes they are, community amenities, and anything else you feel would be helpful to let them know early on

Questions to Ask New Management Company Candidates

If you've narrowed down your list and are ready to meet with representatives from the potential new management company, it'll be your turn to ask some questions as they present you with an overview of their services. But what kinds of questions should you ask? Here are a few that will give you a better idea of how the company operates and if they'll be a good fit for you:

Ask any specific questions you may have about the services they provide. Have an example of something that went wrong with your current manager? See if they've handled a similar situation before.

Ask about their staff. Do the community managers have support staff, or are they responsible for everything? Do you have an accounting team? Is company leadership involved in day-to-day operations? Does your staff pursue educational opportunities and industry certifications? Those are all great ways to gain insight into what kind of team you'll have watching over your neighborhood.

What types of technology solutions do they offer? Yes, we've brought this up a few times already, but it's worth mentioning again. Ask about the software programs they use. Do they have an online portal for members? What types of things can you do through the portal? Are you able to pay assessments online? What about submitting maintenance requests? Is the manager able to electronically communicate with the entire association in the event of an emergency? Will they train community members on how to use these programs?

What makes you unique from other management companies? There could be dozens of answers to this, so what you're looking for will vary. Truly listen to how the company representatives respond to this. Do they offer solutions you've never even considered? Do they have plans and processes for handling various situations that may arise? Though every business claims to be unique, the right management company may be able to tell you about services and other benefits they offer that perhaps you didn't even realize your association needed.

What does the new company need from you?

If you've decided on a new management company, it's time to get the transition started! As you may assume, the new company will need some information from you and your previous management company to set you up in their system. Remember that cooperation from your outgoing management company is essential at the onset of the transition. They have a great deal of information that the new management company will need to begin onboarding.

Firstly, the new company will need access to your association's records and documents. These things will be financial records, governing documents, association policies, service provider contact information and contracts, information on assessments, and homeowner names, addresses, and contact information. Though your board may have all this information themselves, the outgoing management company should have it as well and be able to pass it along to the new company quickly.

Another thing your board will need to do is provide the incoming management company with information on collections policies, processes surrounding inspections, violations, and enforcement. And, if your community has any particular circumstances, issues, etc., you feel the new company should be aware of, it's good to mention them early on.

Though the incoming management company will be able to obtain most of this information from the outgoing management company, there may be times when they need your assistance in encouraging the old company to provide these documents.

What else do boards need to do?

It sounds like the new management company has it all under control, right? Well, yes, they do, but that doesn't mean the board is entirely hands-off in the process.

Depending on your community, board members may need to take responsibility for notifying members of the management change. As we all know, some people don't like change, so for them, it may be better to hear from someone they know vs. getting an email from a stranger.

Other than making sure the board is available to answer any questions the new company has during the onboarding process, you should be able to sit back and let them handle the transition. And, if they're experts in transitioning and onboarding, your members should notice a minimal disruption in how they do business with the association.

At CAMS, we have a proven onboarding process and a dedicated onboarding team to begin working on the transition process as soon as the new contract is signed. They will handle everything from collecting information from the previous managing agent, adding your community's data into our software system, and sending welcome letters from the management company to the members (with board approval). These welcome letters provide some essential information on payments, portal use, office locations, and where to find things on our website.

And the best part? Our onboarding and business development teams will keep you updated every step of the way until the transition is completed and your account is ready to be passed along to your new community manager. Sounds pretty easy, right?

Are you considering transferring to a new management company? If so, you can learn more about some of the fantastic services CAMS offers and reach out to us here or call us at 877.672.2267.