Considering changing Management companies? Here are some guidelines on when a change should be made.

  1. Financials Statements are not provided to the Board on a monthly basis. Presenting financials statements each month should be the norm and done without question. If the management company is inconsistent on the task, this is a red flag that it may contain inaccurate information.
  2. Management has no limit on the funds they are allowed to spend without receiving Board approval. All Associations should have a limit, typically $500, that management is allowed to approve without discussing it with the Board prior to commencing work.
  3. Failure to obtain additional bids or service contracts during the bidding process. Management companies will typically have a preferred vendor list and have strong relationships with them. This should still not prevent them from comparing proposals from independent vendors to verify the prices are competitive and valid. Failure to do so can bring suspicion on the management that they may be getting inappropriate incentives for selecting certain vendors.
  4. Aggressive Managers. Association Managers will sometimes forget that they work for the Board, and not the other way around. Management should always work their time and schedule around owners and should always recommend and advise the Board on business matters without pressuring and demanding.
  5. Lack of Longevity in Managers. If managers keep leaving the management company at a high pace or the Board has requested for a new manager more than once recently, this is a reflection of the main decision makers for the management company and should not be something owners or the Board should have to overcome or deal with.
  6. Poor Customer Service Skills. Getting rude managers, no return phone calls, or the response time is typically in days and not hours are unacceptable and should not be tolerated by owners and Boards. Association’s should hold their management companies to its highest standards and should never try and justify actions that are professional or warranted.
  7. Suspicion of theft or fraud on the Association’s funds. As hard as it is to believe, it does happen, and Board members must know the signs that typically follow these types of situations.
  • Management has too much control of the bank accounts. Board members must always have access to the bank information at any given time and review check disbursements each month.
  • Lack of Separation of Duties. The management company should have an accounting department to oversee the Association’s financials and there should be layers within the firm to prevent any unethical behavior.
  • Full Management Control of Reserve Account(s). Board members should always decide what should be done with each Association’s reserve funds and should review copies of bank statements each month to verify no changes are made without their consent.