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HOW TO CHOOSE AN ASSOCIATION MANAGEMENT FIRM
July 1, 2000
Prior to choosing a professional association management
company, it is wise to have a committee formed just for
that purpose. In the absence of a committee, Board
Members can provide this function as well.
First, the committee should adopt management
specifications, which are reviewed by the Board of
Directors and agreed to. These specifications will then
be used for bidding purposes. The committee should
identify potential management firms by prequalifying these
companies prior to asking them to bid. Some examples of
prequalifying questions would be; 1. Where is the company
located? 2. How long has the business been operating? 3.
How many employees in the company? 4. What is the
experience of the principals? 5. What kind of insurance do
they have? 6. Do they have bonding? 7. What type of
services can they provide? 8. List of association
references 9. List of professional references 10. What
makes their company unique?
After compiling this information the committee would then
determine who would be allowed to bid on the management of
the community. Prior to putting the management out to bid,
the Board will take the committee's recommendations and
finalize them in written form. These specifications will
then be used for bidding purposes. By having written
specifications this ensures that there will be "apples to
apples" bidding, as all management companies do not offer
the same services. Most importantly, the Board needs to
decide what services will be handled by onsite personnel,
membership volunteers and outside contractors before the
final determination is made on what the specifications will
be.
The following is a list of items that may be included in
the specifications: Liaison with the Board, bidding,
responding to resident inquiries, site visits, enforcement
of rules and regulations, attendance at meetings, emergency
service, mail out procedures, newsletter responsibilities,
collection of assessments, bookkeeping and financial
reporting, budgeting, rental and resale approvals,
architectural approvals, correspondence and minutes, costs
of administrative extras and any other service that would
be incidental to your association.
After selecting the items and services that you require the
management companies to bid on an invitation to bid should
be made with a copy of the specifications, copy of the
association's documents, site map and any other items that
are relevant to the bidders.
In this bid package there should be a timetable to respond
to the invitation to bid, a deadline for submitting bids,
the prescribed bid form and arrangements for the management
company to visit the community and an opportunity to have
any questions answered prior to submitting their bids.
When receiving and evaluating bids it is best to have a
prescribed list of questions that will be asked of all
bidders in a final interview. Each bidder should be
evaluated or graded based on their answers. We suggest
having this set up on a matrix form to help grade each
company fairly. An association should never hire a
management company based on cost alone. Other factors when
choosing a management company would be years in business,
years of experience, staff experience, location of company,
office equipment, backup staff, training of staff,
administrative system, bookkeeping staff and system and
checking of references. Also, check their insurance and
bonding coverage and make sure it is compatible with
coverage that your insurance agent states that you would
need.
Always ask for at least three references for associations
that are similar to your association. See who the manager
will be on your site and try to meet with them as well in
order to see if the Board of Directors will be compatible
with this person.
Get samples of their violation and late letters. Copies of
their financial statements, delinquent lists. How and when
do they pay your association accounts payables?
Overall, make up your own list of problems and concerns for
the following areas: administrative, bookkeeping,
maintenance, management, operations and community
relations. Rate each company based on this list and then
choose the company confidently.
Copyright 2007© Associated Property Management of the Palm Beaches, Inc.
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