Handling the day-to-day business of a community association is no simple task, even for boards overseeing a relatively small property. There are books to balance, residents to placate, repairs to schedule, and a multitude of other boxes that need to be checked--all of which grow exponentially more complex relative to the size of the community. Fortunately, a board can outsource much of the grunt work to a qualified community manager.
But shopping for the right advocate for one’s community is not without its own set of hurdles, as boards need to take into account multiple factors when deciding on a manager or management firm. Does the manager have experience dealing with properties of equivalent size? Does the company as a whole have adequate resources to meet all their client communities’ needs? Does the agent’s general personality and demeanor mesh with those of the board?
Before entering into a long-term – and hopefully fruitful – relationship with a community management company, it’s wise for a board to compile a thorough list of criteria it wants to have met, and to take rigorous care that the person or firm they hire can meet them.
While some attributes of a good community manager may seem like commonsense characteristics you would want in any professional – think punctuality, attentiveness, passion, etc.— it is still worth evaluating one’s prior experiences as a board or association and assessing which traits are most essential for your unique association’s current and potential needs.
David Swenson, vice president of business development with Nevada Association Services, Inc., in Las Vegas, suggests that boards find a management company that has been in the business for a while and has established a good track record with other clients. “You also want to assess the turnover with managers,” he recommends. “And, if yours is a master planned community, you will want to find someone who has worked in similar situations before, as they are large and involved. Some management companies specialize in condo associations and high-rises, while others focus on single-family homes, yet others still work solely with the large master planned communities. It’s all about finding the right fit.”
“One of the first things that you have to do is to check with references that are of a similar size to your association,” urges Michael T. Schulman, a managing partner with Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP, a law firm with offices in Las Vegas, Reno, and Los Angeles. “Are you a smaller association that may get lost in a large management company? Will you be viewed as an important association to them? As much so as their other clients?”
If the manager is not going to be on-site, and will be simultaneously dealing with a portfolio of clients, Schulman advises boards to inquire ask about that manager’s workload, and assess whether he or she can reasonably accommodate another association on their plate. “And the final thing, which applies especially to Vegas, is if you’re a board of a high-rise, to make sure that your manager has the that specific high-rise experience,” he says. “It’s incredibly difficult to learn the nuances of high-rise management on the fly for someone who hasn’t done it.”
And Cameron Clark, business development manager with FirstService Residential in Nevada, warns boards against obsessing over price above all else. “Too often, boards will focus on how much they are paying, rather than on the services and resources that will be provided,” he says. “They think that they are solving a problem by continuing to keep the price low, when in fact they need to find a company that offers a lot more than just a certain price.”
In order to avoid overthinking the money part of the equation, Clark recommends that boards approach things thusly: “When deciding on a management company, a board may see a difference in price of, say, $150 per month in fees from one company to another. If there are 150 units in the association, then they’re cutting $1 per door per month. Residents spend more than that on coffee daily.”
It is worth remembering that an affiliation with a large or high-profile management company does not necessarily mean that a particular community manager is right for your specific association. Before entering into a business transaction with a management firm, a board should sit down with the individual with whom it will be working, in order to make sure that everyone sees eye to eye.
“We pay attention to the personalities,” says Corina Sailer, a regional manager who also works with FirstService Residential in Nevada. “We look at many factors: the number of units, type of community, that community’s particular issues. Then we look among our team for the person who would be the best match for the client. We look at the portfolio load of individual managers, personality, and past experience. We really want to find a good fit. Many times, we have the potential manager come along to the sales presentation for the prospective client, such that the parties can ask each other questions.”
“[Speaking with the intended manager] can really be the most important thing for a board,” agrees Schulman. “There are fine companies out there that you can enter into business with, but maybe you don’t get their best manager. Or maybe a company is less-than-stellar, but you end up with a great manager. Also, you can’t force people to stay at a company, but you should assess a person’s longevity and ascertain whether or not they will be there for some time. Often we encounter situations where a management company will assign a terrific person to a client’s account, but they’ll move up in the ranks or leave, and now that association is getting another manager that they’d not met or interviewed. And maybe it will be fine, because the company is reputable, but it’s still always preferable to evaluate the specific person you’ll be dealing with.”
All of that having been said, putting too much stock in the individual matter can be counterproductive. “No manager sets out to fail,” acknowledges Clark. “However, when we examine these situations, we realize that a lot of managers are not always backed up with the depth of resources that comes in the form of well-trained support personnel, and updated, adaptable technology.”
The More Things Change
Of course, not every association in search of a new community management company is starting from a blank slate. Occasionally, a board is looking to make a clean break from a lackluster professional relationship. The issue then turns to whether it is worthwhile to seek out entirely new management, or to work with your existing representatives to repair the frayed relationship.
“Every management company is structured differently,” says Swenson. “You always want to talk to your individual manager before switching companies, as they may not even be aware as to what your problem with them is. Then, if you are unable to hash out your issues with the manager, you absolutely want to take them to that next level. That way, the management company knows that you’re giving them the opportunity to fix whatever is broken, and, if they feel it appropriate, they may make a personnel change internally. Generally, before you make any rash business decision, you always want to speak to someone in a supervisory role.”
Boards should also be aware of the learning curve required of a new management company. “It will take a different organization six months or so to get acclimated,” warns Schulman. “Of course, if a number of managers or the owner of your current company is being dragged in front of the Nevada Real Estate Division on some horrible claim, then maybe it is worthwhile to cut ties.”
Schulman also advocates for a board reserving the right to independently choose its vendors. “A lot of management companies have good affiliates that their clients frequently use, but, in those cases, the companies are usually comfortable enough to go out and interview a number of alternate options for comparison. When going out for a bid, always solicit from at least three companies,” regardless as to whether one particular vendor comes with a glowing review from management.
Fortunately, Nevada’s rigorous approach to community manager certification ensures that anyone in the field is at least moderately qualified to do a good job, and is continually receiving education and training. That does not mean that a board shouldn’t screen candidates with equal rigor, but it does give a board flexibility to evaluate both a potential manager’s credentials and compatibility, in order to eventually hire the perfect fit for their association.
Mike Odenthal is a staff writer/reporter for The Nevada Cooperator.