While the switch may seem like a big undertaking, specific steps can streamline the process. We have prepared some of the basic steps below on how to change HOA management companies to assist you during this process.

Review Your Current Management Company Contract

As you prepare to change your HOA management company, any transition requires familiarity with your contract so that you don’t take any legal missteps. If necessary you may want to consult a lawyer, and review your contract for clauses pertaining to the transition. 

For example, look for contractual conditions surrounding:

• Notice that must be given to your current management company before your contract renews - could be 30, 60 or even 90 days in advance of the transition

• Fines that may apply for the early termination of the contract

Another important step to remember is to restrict your current HOA management company’s access to important documents, financial information, and accounts when the time comes. Depending on the access, passwords may need to be updated and certain user permissions removed.

Define What The Association Is Looking For In Its Next Management Company

After determining that a transition to a new management company is both warranted and legal, it’s time to decide what services and features are essential. For example, you may need a management company that offers a la carte services or different tiers.

A good place to start is understanding your goals around HOA management. Some questions to consider when determining your needs might be:

• Do we want to decrease our monthly/yearly spending, or can we afford to have the management company take on more responsibilities?

• Do we need better, more frequent communication with the management company? 

• Do we want the management company to manage vendor relations such as for projects or monthly maintenance services? 

• Do we want the management company to handle association financials? 

Establishing your overall needs and future goals will help set the parameters for HOA management companies to provide you with the appropriate bid. 

Establish A Search Committee

Hiring a new company can be a job in itself, which is why you should consider establishing a search committee. A search committee is a group of two or more people tasked with interviewing and evaluating HOA management companies. 

Consider assembling a diverse group so that you make sure to cover each area of the HOA. For example, choosing your treasurer and secretary to serve on the search committee ensures that they will focus on both bookkeeping and homeowner communication during the search. 

Establishing a search committee should be done before your current management company is phased out. This is an important component when it comes to how to change HOA management companies. The process of transitioning to a new company in can be lengthy, requiring many interviews, process reviews, and board meetings to make determinations.

Review The Bids

Once you receive the prospective management proposals, you can then proceed to review the bids. Compare each company’s fee structure with the services they offer. Remember that cheaper isn’t always better. A company may charge a low management fee but then also have higher ancillary charges which ends up costing more.

Another thing worth considering is the size of the management company you want to work with. Larger companies tend to have more resources at their disposal, but they also usually have more clients and therefore you may be treated like “a small fish in a big pond”. Smaller companies, on the other hand, can usually focus more on your community since they tend to manage fewer communities.

Check Credentials & Interview Final Candidates

Once you’ve whittled down your prospects to a manageable number, schedule interviews with them. Meeting your potential HOA managers in-person is a great way to gauge their personalities. Keep in mind that you’ll be working with your manager for a long time, so it’s critical that your personalities don’t clash.

Setting up an interview also gives you the opportunity to ask important questions. Ask them about their fees, how they handle specific problems and their customer support process. You don’t want to experience the same problems with your new company, so this is a good time to address those as well.

Decide On A New Company

Although the search committee (if using one) may be charge of the search process, the final say will still come from the HOA Board of Directors. The search committee can make a recommendation to the Board after evaluating everything.

Sometimes, the Board will take it as is. Other times, though, the Board may want to conduct a final interview with the prospects. The Board should then vote on the termination of the existing contract as well as the hiring of the new HOA management company.

Share the News with Homeowners

When making the switch, it’s not enough to know how to terminate an HOA management company — you must also deal with the aftermath.

During a time of transition, it’s crucial to maintain clear communication across the Board. With full transparency, you are able to keep everyone on the same page and build trust in your community. That’s why when legal requirements are satisfied and a new management company is selected, it’s time to inform everyone of the transition, including homeowners, vendors and HOA personnel.  You should ensure that the the newly selected management company announces the change at least 30 days in advance of their start date if possible. This is because they also regularly interact with the HOA management company. If they are aware of the change, they can already limit interaction and stop doing business transactions with the company.

It’s also highly likely that your HOA management company had access to your Association’s bank accounts, financial documents, passwords, online accounts, and so on. As a precaution, the Board should restrict their access or make the necessary changes to protect the Association’s data.

Ensure A Smooth Transition

The current management company should help facilitate a smooth transition to the new management company. They should put together the necessary files and documents as well as assist with any problems. In some states, including Florida, there are laws governing the amount of time it takes to transition from one management company to the next.

The transition might be tricky or generally uncomfortable, which a natural concern that many HOAs have. However more often than not, management companies do maintain a professional tone even when helping transition to new management.