So your homeowner’s association (HOA) has come to the point where it wants to hire a management company to conduct business. Good choice. To initiate the services of a management company, you will need a request for proposal, or “RFP.”
What is an RFP?
Think of an RFP like a reverse cover letter. Usually, you send your cover letter to a potential employer to introduce yourself and explain the value you would bring to the company. The critical distinction here is that you, the homeowner’s association, act as the employer looking for a potential employee, the management company. For your new employee to perform the job to the best of its ability, they need to know the ins and outs of your association.
A good request for proposal is needed to acquire a top-notch management service for your association. RFPs typically contain a complete overview of your HOA’s history including detailed documents and financial statements. Supplying comprehensive and accurate information in your RFP will directly affect the quality of the proposals you will receive from association management firms.
The request for proposal is not intended to be a plead for help. When you draft your RFP, it is crucial to know what your association wants long term — a strategic plan of what you want to get accomplished when you hire a management company.
What to include in an RFP
Specific details are what make a valuable RFP document, even down to how many association meetings management is expected to attend per month. An expectation of the fee structure the HOA is willing to work with may also come in handy.
Just like teachers tell their students that no question is too dumb, this is the same concept. No detail is too small to include in a request for proposal.
Consider answering these questions in your RFP:
- Is the association incorporated? If so, in what state?
- Is your association identified as tax-exempt by the IRS?
- What is your association’s total operating budget?
- What is your association’s total reserve budget?
- What are the goals of your association?
- What are your reasons for wanting to hire an association management company?
- What is the associations yearly revenue?
- How many members does the HOA have?
- What is the current membership retention rate?
- Who manages the HOA currently?
- How are the HOA’s dues presently structured?
- What is the chain of command of your association?
- How are meetings scheduled for your HOA?
- What are the key obstacles going forward for your association?
There are also many important financial documents you will want to include in your RFP. The following are all good candidates for inclusion:
- List of Documents
- Yearly reports
- Bylaws & CC&R’s
- Association meeting minutes
- Most recent financial statement
- Year-end audit/review
- Policy manual
- Membership application
- Meeting brochure
- Advertising rate card
Your association’s transition plan must also be present in the RFP document. This plan is particularly important for HOA’s who are switching from one management company to the next. You can’t expect a property manager to read your mind when calculating the fees it will take to run the show. Due diligence is critical in this process.
Get a hand
Getting an RFP together can be a difficult and tedious process. Luckily, many association management companies. Cedar Management Group included, are willing to help. Whether you have an RFP ready to go or still need some insight into what direction to go, reach out to us online or by phone at (877) 252-3327