Most community associations hire a management company to help with the daily operations. Before signing a management contract on behalf of the community, board members should consider the following:
- Fees: How much is the management fee, and what does it include? What fees are charged for additional services, like mailings to homeowners?
- Scope of service: What is the management company agreeing to do on behalf of the association?
- Insurance and liability: Whose coverage goes into effect if an association, the management company or the manager are sued?
- Length of contract: What timeframe does the contract cover? Does the contract automatically renew?
- Termination: If the community or the management company want to exit the contract, what is the notification process? Does an early-exit fee or penalty apply?
- Exit process: What are the steps—and the timeframe—for transferring community management from one company to another?