About the Company
- “How many communities does your company currently manage, and how many have you gained and lost in the past 12 months?” — A company that lost 20% of its clients in a year has a service problem. Growth without retention is a red flag.
- “What’s your average client retention rate over the past 5 years?” — Industry average is around 85-90% annually. Below 80% suggests systemic issues.
- “Who will be our assigned community manager, and how many other communities do they manage?” — More than 8-10 communities per manager means your community won’t get the attention it needs. Ask to meet them before signing.
- “What happens if our assigned manager leaves the company?” — Manager turnover is the industry’s biggest problem. Ask about their backup plan, transition process, and how quickly they assign replacements.
- “Can you provide audited financial statements for your company?” — You’re trusting them with your money. Their own financial health matters.
About Day-to-Day Operations
- “Walk me through a typical month of managing a community like ours.” — Vague answers mean they haven’t thought about your specific needs. Good candidates will reference your RFP details.
- “What’s your response time commitment for board members? For homeowners? For emergencies?” — Get specific numbers, not “we’re very responsive.” Then check with references whether they hit those targets.
- “How do you handle after-hours emergencies?” — Is it an answering service, the manager’s cell phone, or a 24/7 call center? Who authorizes emergency spending?
- “What technology platform do you use, and can I see a demo?” — Online portals, work order systems, and payment processing should be modern and mobile-friendly. Ask what the homeowner experience looks like.
- “How do you handle violation enforcement?” — The process should be consistent, documented, and include a hearing process for disputed violations.
About Financial Management
- “Can I see a sample monthly financial report package?” — This is the most revealing document a management company produces. It should include: balance sheet, income/expense vs. budget, accounts receivable aging, bank reconciliation, and reserve fund statement.
- “How do you handle delinquent assessments?” — Ask about their collection timeline, when they recommend attorney involvement, and how they track delinquency rates.
- “Do you manage reserve funds separately from operating funds?” — Yes is the only acceptable answer. Commingled funds are a massive risk.
- “How do you handle the annual budget process?” — The management company should prepare a draft budget with line-item detail, present it to the board for review, and incorporate board feedback before finalization.
- “What’s your vendor selection process?” — Do they get competitive bids? Do they have preferred vendor relationships? Do they receive any compensation from vendors they recommend? Transparency here is critical.
The Questions Most Boards Forget
- “What would you change about how our community is currently managed?” — If they’ve reviewed your financials and governing documents (which they should have), they’ll have specific observations. Generic answers mean they didn’t do their homework.
- “What’s the most common reason communities leave your company?” — Honest companies will answer this directly. If they say “no one ever leaves,” they’re either lying or delusional.
- “Can we contact your most recently departed client?” — Willingness to share this reference is a powerful signal of confidence.
- “Have you ever been sued by a client association? What happened?” — Lawsuits happen in this industry. How they handle the question matters more than the answer.
- “What would cause you to decline to manage our community?” — Good companies turn down poor-fit clients. A company that will take anyone is desperate for revenue.
- “How do you handle a situation where the board directs you to do something you believe is wrong?” — You want a manager who will push back professionally, not one who blindly follows instructions or silently complies.
- “What does your onboarding process look like in the first 90 days?” — There should be a structured plan: document review, property inspection, vendor meetings, homeowner introduction, financial setup. “We just start managing” is inadequate.
- “How do you handle board member turnover and new member onboarding?” — Communities with annual board elections need managers who can quickly bring new members up to speed.
- “What continuing education or certifications do your managers maintain?” — Look for CMCA, AMS, or PCAM designations from Community Associations Institute.
- “What question should we be asking you that we haven’t?” — The best candidates will offer something substantive. It shows they’re thinking about your needs, not just making the sale.
Key Takeaways
- Ask about the assigned manager’s workload, not just the company’s capabilities.
- Request sample financial reports before signing. Report quality reveals management quality.
- Ask what their most recently departed client would say about them.
- Good candidates will ask you as many questions as you ask them.
- Pay attention to how they answer, not just what they answer. Defensiveness and vagueness are data.