Q: What is a good evaluation method for property managers?

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Q: What is a good evaluation method for property managers?

Q: What is a good evaluation method for property managers?

I am president of a homeowners association in Montana. We have been having problems with owners trying to micromanage our current property manager. At a most recent meeting I suggested that an evaluation form be developed in an effort to fairly evaluate the effectiveness of the manager. Is there a standard evaluation form which evaluates property managers?

Great Falls, MontanaProperty Manager Evaluations

answer-icon-masterSurely there is a special place in Hell for people who micromanage good professionals – and I’m assuming your current property manager is a good professional and you selected this individual or firm for a reason.

The issues you raise here aren’t unique to the HOA world, of course, but as you no doubt perceive, they go to the principles of sound corporate governance and management that apply to any firm.

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The problem with HOAs, of course, is that all the shareholders live in the CEOs back yard, and they all want to pull him in different directions.

Imagine how effective the legendary Jack Welch could have been running General Electric for all those years if all the shareholders lived in the parking lot, stopped him every time he got out of his car and went to the elevator, and kept barging in his office umpteen times a day with helpful suggestions… and by the way – the rocks around the flagpole need to be painted a brighter shade of white!

No manager can deliver consistently on his responsibilities to the community as a whole like that. And no good manager would tolerate it for long before he told his tormentors to get stuffed, and took his talents and industry to some other company.

But meanwhile, I would take a page out of General Patton’s memoir, War As I Knew It:

“Never tell soldiers how to do something. Tell them what you need done, and they will surprise you with their ingenuity.”

It seems your manager needs some top cover from you and the board. There may be some things that need to be said to a problem owner or two (or more) but they can’t come directly from the manager.

It seems like you know this, too. Ultimately, as the board president, it’s going to fall on you to be the one to tell a micromanaging owner to back off and give the manager some room to operate.

It might not be well received, but hey, welcome to leadership.

If you’ve got a good manager in place, then the Board’s responsibility to the owners, as their representative, is to ensure the manager has the resources and authority to succeed in accomplishing the objectives that you set forth.

And yes, it’s the Board’s responsibility to set the broad strategic guidelines for the manager, just as GE’s Board of Directors sets the broad strategic policies and dividend for the CEO to execute – and then hopefully gets out of his way.

This is not to say the manager shouldn’t be responsive to the needs and concerns of individual owners. But there should be a process in place that is workable for both sides that owners respect.

Some examples of such processes could be:

  • Specific office hours where the manager may be expected to be at his or her desk and accessible to individual owners – and specific hours or days where the manager will be attending to other matters outside of the office.
  • A web portal through which owners can communicate privately with the manager – but which the Board can review and inspect for abuse going either way.
  • A specific process for work orders, suggestions and concerns

One other technique I would recommend: A social event, once or twice per year, at least, where business is not discussed – military veterans may recognize the dining in or dining out tradition, but things can be as informal as a barbecue. Emotions can run high in HOAs – it’s important to reinforce that everyone involved is human, and cause them to interact as people. 

Is there a standard evaluation form for HOA managers?

Not to my knowledge. And I called around. My own take is that nothing standardized for all HOAs is going to be specific enough to be very useful – and Boards should not be hiding behind standardized forms when they could be engaged with the other owners, and each other, in setting the specific objectives for the property manager to whom they’ve delegated their responsibilities.

Every board should decide as specifically as possible what they want of their manager:

  • Do you want to emphasize resale value and appreciation? Or are the owners willing to sacrifice price appreciation for livability?
  • How do you want maintenance resources allocated? To cosmetics that enhance the short-term property values or to invisible but necessary longer-term items?
  • What is the manager’s scope of work? Do you want your manager managing major construction projects, getting involved with leasing or real estate transfers, handling evictions in individual owners’ houses? Does the manager understand what you want? Are you compensating and resourcing your manager appropriately?

Obviously, any standard form would vary substantially based on the owners’ objectives, as defined by their representatives on the board.

That said, the American Society of Association Executives probably has the best relevant collection of sample and model documents I’ve seen.

I also believe in the value of shameless plagiarism when it comes to good staff work and tested legal documents!

If you are willing to pay a few bucks, you can purchase some model templates from the Institute of Real Estate Management (IREM). For example, they make a Condo and Homeowner’s Association Management Agreement template available free for members, or for purchase by non-members at $29.95.

Well worth it if you are looking for a track to run on. IREM has put together a wealth of good resources and educational materials for property managers.

Of course, communication is always a two-way street. Boards of directors of HOAs are not full time. They can bring together people from different walks of life and different professions, and there is power in bringing a multi-disciplinary approach to HOA problems and solutions. But that HOA manager is probably going to know a lot more about HOA property management than any individual on the board. Board should expect to be guided, to some extent, but not blindly. A little skepticism is a good thing, and will keep everyone honest.

Author Bio Writing about personal finance and investments since 1999, started as a reporter with Mutual Funds Magazine and served as editor of Investors’ Digest. He now publishes feature articles in many publications including Annuity Selling Guide, Bankrate.com, and more. Author Bio for Jason Van Steenwyk

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