Hiring an HOA Management Company

guest blog by Jill Schweitzer

As a Realtor in Arizona, I recently went to a class presented by an HOA property management company. The topic was the various ins and outs of HOAs hiring a management company. But as the class progressed, I thought it really would be better taught by an attorney and not somebody within the HOA industry.

Here are my conclusions after going through this class:

1. Absolutely, have an attorney review and make changes to the contract! Have the attorney tell you what items to add in to the contract items that are missing in the laws to protect the both the HOA and the individual homeowners…thereby holding the management accountable and responsible for any misfeasance or malfeasance. Also have the attorney remove the indemnification clause! Why pay to defend a management company for its bad actions?
2. Check court records online and in person to examine lawsuits the company may have been involved in.
3. Recommend that boards either eliminate or lower transfer and disclosure fees!
4. Recommend the board get a website independent of the management company. This would ensure that the HOA’s connection with homeowners survives any future change in management.
5. When hiring a management company, HOA boards should be careful of all the extra junk fees; printing, copies, coupon books, violation letters, etc.
6. Finally, mandate that any management company hired by an HOA certify that it has insurance against all misfeasance and malfeasance by management company owners, executives or employees.