Questions to Ask HOA Management Company
For association boards interviewing management companies, or reviewing the one they have. These questions cover the fee structure, who your assigned manager really is, bank account controls, collections, vendor markups, reporting deadlines, transition work and exit terms.
The questions
Open any question for the note
Which communities of our size and type do you manage now, and may we call two of them directly?
Why ask it
A company that manages mostly large high rises will treat a forty unit townhome association as filler, and the reference calls are where that shows. Ask for a community that recently had a hard project, not the one they always hand out.
Who would our community manager be, how many other associations do they carry, and can we meet them before we sign?
Why ask it
You are hiring a person more than a brand, and portfolio size is the single best predictor of response time. A manager carrying a dozen or more associations cannot attend evening meetings for all of them, so ask who covers when they are out.
What is included in the base management fee, and what gets billed on top of it?
Why ask it
The base fee is rarely the real number. Ask specifically about extra meetings, mailings, site inspections, annual meeting support, project oversight and after hours calls, then have them mark each one included or billable on their own proposal.
What do you charge owners directly, and do those fees come to you or to the association?
Why ask it
Resale certificates, transfer fees, portal charges, late notices and payment processing fees are often kept by the management company, which means part of their compensation is invisible in your budget. Owners will complain to the board about those charges, so the board should know the amounts.
How would our funds be held: whose name is on the accounts, are operating and reserve funds separate, and who can move money?
Why ask it
Association funds should sit in accounts titled to the association, not pooled with other clients, and reserves should be separate from operating. Ask what approval a transfer above a set amount requires and how many people have to sign, because that control is what limits the damage of an internal theft.
What financial reports will the board receive each month, and by which day of the following month?
Why ask it
A named date is the commitment; a promise of monthly reporting is not. The package should include a balance sheet, income statement against budget, bank reconciliations, an aged delinquency list and copies of paid invoices, and boards that never see reconciliations have no way to catch a problem.
Walk us through your collections process, from first late notice to attorney referral.
Why ask it
You want the day counts and who decides each step, because collections is where a board is most likely to be accused of treating owners unevenly. Also ask who pays the legal fees up front and whether they mark up collection costs.
How do you bid out contracts, and do you or any affiliate receive a fee, commission or markup from vendors?
Why ask it
Markups, rebates and in house maintenance divisions are common and legal, but they change whose interest is served when a bid is recommended. Ask for the answer in writing and for a sample of three bids on a recent project so you can see the spread.
What licenses or certifications do your company and our manager hold, and what insurance do you carry?
Why ask it
Several states license community association managers, so this can be verified rather than taken on trust. The coverage that matters to a board is the fidelity bond or crime policy, since that is what responds if someone inside the company takes association funds, and errors and omissions coverage for when their advice turns out to be wrong. Ask for certificates that name the association.
How do you handle after hours emergencies, and who answers the phone at two in the morning?
Why ask it
Ask whether it is a manager on call, a shared answering service, or a voicemail checked in the morning, and what the service is authorized to dispatch without approval. A burst pipe on a holiday weekend is the whole reason boards hire management.
What is your response standard for owner calls and emails, and how do you know whether you meet it?
Why ask it
Two business days is a common commitment, but the useful follow up is how it is tracked and what happens when it slips. If there is no ticketing system and no report to the board, the standard is a sentence in a proposal.
Take us through how you would handle a rule violation, from first notice to hearing.
Why ask it
Enforcement is where associations get sued, so you want to hear notice, cure period, hearing right and documentation, all matched to your state statute. A company that says it just sends letters until the board decides is handing your legal exposure back to volunteers.
What do you prepare for board meetings, when does the packet arrive, and who writes the minutes?
Why ask it
A packet that lands the night before guarantees decisions made without review. Ask how many days ahead it goes out, whether the manager drafts the agenda with the president, and how quickly draft minutes come back.
What is your role in the reserve study and long range planning?
Why ask it
Some companies coordinate the study and build funding scenarios into the budget, while others treat it as the board's homework. The difference determines whether your association drifts toward a special assessment or plans past it.
How do you handle an insurance claim for the association, and who deals with the adjuster?
Why ask it
Large water losses involve the master policy, individual owner policies and a deductible allocation argument, and boards rarely have the time to run that. Ask for a recent claim they managed and what the association ended up paying.
What software will the board and owners use, and what can we see without asking you?
Why ask it
Self service access to financials, work orders, violation history and architectural requests removes most of the friction in this relationship. Ask whether the board keeps access to its own records after the contract ends.
What happens in the first ninety days if we hire you, and what do you need from us?
Why ask it
Transitions fail on records: bank signature cards, vendor contracts, owner ledgers, violation files and architectural approvals. A company with a written transition checklist and a named person running it is telling you they have done this before.
How many communities have left you in the last two years, and why?
Why ask it
Every company loses accounts, so a claim of none is either a very small book of business or an unwillingness to say. The reasons matter more than the count, and a candid answer about a bad fit is more reassuring than a polished one.
What are the contract term, notice period and termination rights, and what does it cost us to leave?
Why ask it
Auto renewal, a long notice window, termination only for cause, and charges for producing your own records can lock a board in for a year past the point of regret. Ask for termination without cause on sixty or ninety days notice and see how they react.
What do the boards you work with find most frustrating about working with you?
Why ask it
This is the one question a rehearsed pitch has no answer for, and a real one, such as slow architectural reviews or manager turnover, tells you what to write into the contract. Deflection here usually predicts deflection later.
Selecting and Managing a Management Company
Practical guidance for the conversation itself
Comparing Proposals on More Than the Monthly Fee
Build one annual number per bidder
Take the base fee times twelve, then add the billable extras each company listed: additional meetings, mailings, project oversight, annual meeting support, inspections. Add an estimate of what owners will pay directly in transfer and resale fees. The cheapest base fee frequently finishes second or third once that total is on paper.
Send every bidder the same written question list
Ask for answers in writing before the interview. Comparing written responses side by side surfaces the differences a presentation smooths over, particularly on bank account controls, vendor markups and reporting dates, and it gives you language to attach to the contract.
Interview the manager, not the salesperson
The person who wins the account is usually not the person who runs it. Require that the proposed community manager attend the interview, ask how many associations they carry and how many evening meetings a month that means, then ask what they would need from your board to succeed.
Terms to Settle Before Signing
- Scope: exactly which services sit inside the base fee, with billable items priced individually.
- Fees charged to owners, the amounts, and who keeps them.
- Bank accounts titled to the association, operating separate from reserves, with the board able to view them directly.
- Approval thresholds and signature requirements for transfers and for spending outside the budget.
- Reporting: the specific documents due each month and the day they are due.
- Vendor policy: disclosure of markups, rebates and any affiliate ownership, plus a bid requirement above a set dollar amount.
- Insurance the company carries: general liability, crime or fidelity bond covering association funds, and errors and omissions.
- Manager continuity: notice if your manager changes, and the board's ability to request a replacement.
- Termination without cause on sixty or ninety days notice, both directions.
- Records on exit: everything returned within a set number of days at no charge, in usable electronic form.
- Indemnification language, read closely, since some agreements shift more risk onto the association than a volunteer board should accept.
Answers That Should Give a Board Pause
- Association funds pooled with other clients, or accounts the board cannot view directly.
- No monthly bank reconciliation in the standard reporting package.
- Vendor markups or affiliate ownership that only surface when you ask twice.
- A proposed manager who will not say how many associations they carry.
- Auto renewal with a long notice window, or termination only for cause.
- Charges for returning the association's own records at the end of the contract.
- No written transition plan and no named person responsible for it.
- References limited to one community, or reluctance to let the board call anyone directly.