Hiring New Management When it’s Time for a Change!

There is an old adage that claims, "The more things change, the more they stay the same," and that is not a happy thought for a board of directors or an association looking to change property management firms. The turmoil of replacing a management company is guaranteed to be costly, not only for the board, but for the entire community. So make sure the necessary changes are achieved through this change in management.

Since board members are generally volunteers, merely making such a decision could be problematic. Is there a formula to guarantee a successful change? Are there guidelines to ensure a move in the right direction? What information should a prospective management company provide before the contracts are signed? What is the best way to spot a red flag? Where does the search process begin?

Begin at the Beginning

When a management change becomes imminent, the best place to start a Q&A exchange is right at home with the board. Each board member must understand the problems with the current firm and what changes are expected. First, ask if the problem represents a personality conflict with the manager? If a different manager, within the same company, better communicate and work with the board, change could be accomplished quickly and seamlessly by switching out the manager alone.

Asking who, what, when, where, and why—the five “W’s”—can identify if the problem is deeper than a single management person. By identifying the areas where problems have occurred and the individuals involved, a board can develop a better idea of what is working and what must change.

It’s a good idea to have an attorney review the current contract early in the information-gathering process to determine the best way to legally separate from the property management company, and to identify areas for positive legal change. When a decision is made on a new management firm, the attorney should again be consulted for a review of the new contract and documents before anything is signed; hopefully, there will be a lot of due diligence in between these two reviews. Spending sufficient time on the search is the only way to determine the overall best course of action for a community. While board members may argue the expense of involving an attorney, legal counsel can spot more costly pitfalls.

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