How To Change Property Management Companies [+Checklist]

You’re sitting at the back of the room waiting for your building’s Special General Meeting (SGM) to begin. There are three minutes left until the meeting starts. The ownership needs approval by a 3/4 vote tonight to end the relationship with the current management company before the Strata Council can give notice to terminate (typically a 60-day period).

It’s been a long road to get to this meeting. Poor communication, unmet quotes, unmet service delivery expectations. But while it all seems like reason enough to fire them and move on, the management contract has all but tied Council’s hands.

Changing property management companies shouldn't be this hard. But it is often the case.

This post shares what you need to do before and after you’ve made that critical decision to change management companies, to help you get the service you deserve and to keep the transition as smooth as possible.

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Steps before changing management companies

1.   Identify challenges with your current management company 

Despite a few headaches, all may not be lost, and like with most relationships, there may still be an opportunity to salvage it.

Determine whether the challenges your community is facing are due to a lack of communication, follow-through, or personal issues with your current property manager.

a)   Make a list

Making a list will help you clearly identify your concerns and prepare you for a conversation or sit-down.

b)  Ask your property management company for a schedule of improvement

Get hold of your company ASAP and explain the situation to a senior representative or managing broker. Perhaps, they aren’t aware of the situation or they may not understand all the details.

Ask them to put together a schedule of improvement. Together you can capture all of the issues that need to be resolved and reach an agreement and timeline to have them fixed.

c)   Track progress  

Set deadlines to accomplish each of the tasks drawn up in the schedule of improvement.

Have you noticed an improvement? If yes, that's great! Make sure to monitor the situation closely and let the managing broker know of any issues moving forward.

If the situation hasn’t improved, it is time to take action. Keep reading to know what to do and what to look for in a new property management company. 

2.    Put together a request for proposal (RFP) and ask for a site visit

a)   Create a proposal

When looking for a new property manager for your community, the first thing you need to do is to put together a request for proposal; not only does this give potential property management companies an idea of what your community is looking for, but it helps you and your Council to define and agree upon what you require.  

You should include:

·      Age of the building

·      Size of the building (number of units)

·      Number of meetings (how many council meetings and AGM)

·      Type of strata (residential, commercial, mixed-use, sections)

·      Any ongoing or anticipated projects

·      When would be a good time for site visit?

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Download a checklist for creating a request for proposal (RFP), including the most essential questions to ask your new property management company.

b)   Schedule a site visit and meet management companies

A site visit is essential because it will set the tone for your future relationship. Only then, will a property management company be able to understand the complexity of your community and what you are looking for.

Red flag: If a company is not interested in visiting a potential client, it's a red flag in our book. Their attitude will likely not be any different after they've signed a contract with you. You need a management company that cares.

c)   Compile a list of questions to ask

When meeting new management candidates, have a list of questions prepared that will help you understand whether or not they are a good fit for your community. These questions will depend on your current situation, needs, demographics and more.

Here are a few questions you should always ask, no matter what your community’s needs are:

·      During a management transition, do you meet with owners and/or offer assistance?

·      What does your termination clause look like?

·      How do you assign a Community/Strata Manager?

·      What is your standard response time and policy for communicating with Council and owners/residents?

·      How long does it typically take to distribute minutes and letters?

·      How do you communicate with owners and what technology do you use?

d)  Lastly, and possibly most importantly! Make sure that the management company’s philosophy is aligned with what you're looking for.

Property management is still a very traditional industry, and not every company has adapted to the current trends and needs in service, communication and technology. Tip: Ask about their company values!

At Tribe, our values focus on collaboration, service and gratitude. We are a tech, and a people-forward team of industry specialists focused on serving, caring for and building communities through supportive, timely and efficient practices.

Our philosophy is simple, really...we love what we do, and we're here for our clients, every step of the way. 

Red flag: If a company is not interested in visiting a potential client, it's a red flag in our book. Their attitude will likely not be any different after they've signed a contract with you. You need a management company that cares.

3.    Ask for a financial package and agency agreement

Once you meet the company and receive the proposal(s), ask for a copy of the financial package, as well as the agency agreement that the company uses.

Tip: Take a close look at the termination, exclusivity, and non-competition clauses.

 

4.    Approach your current company for termination

Once you have decided on a management company, it is time to approach your current company for termination. It is likely that your contract is very restrictive regarding termination. Don’t worry! We’ve broken down step-by-step what you need to do:

· Ask your current management company to wave the 3/4 vote for termination of your management agreement. If they refuse, your Strata Council has to call a Special General Meeting (SGM) or add to your AGM Annual General Meeting.

· Once you have the owners’ vote in favour of termination, give 60 days notice.

· Sign your new agreement and give the new property management company authority to act. During the notice period, your new management team can begin the transition process and request all the important records from your outgoing manager. 

At Tribe, we manage all aspects of a transition with our new customers to ensure that the transition process goes smoothly while keeping council and residents up-to-date at all times.  

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Clear and effective communication is at the core of what we do.

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Download a checklist for creating a request for proposal (RFP), including the most essential questions to ask your new property management company.

Conclusion

Changing property management companies shouldn’t be a difficult task, but if it is, know that you will be prepared.  

It is important to be clear about what you’re looking for, and that if the situation doesn’t change, that you will be looking for alternatives. Contact a few property management companies with an RFP, and have a list of questions ready. Remember, the new company must do a site visit to truly understand your needs and situation.

Once you have chosen a new company, it is time to act. Get your council aligned and approach your current company for termination; the new company should take care of the transition process.

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