One of the more stressful aspects of community association
management is deciding to terminate a client contract. Some reasons as to why this might occur include:
- Loss of management staff or support that result in reduced service levels
- Client demands services beyond the contract
- Client is unable/unwilling to pay billings
- Manager faces constant harassment or physical threats / lack of respect from homeowners and/or board members
- Client consistently ignores professional advice (from attorney, insurance broker, CPA, manager, engineer)
- Client exposes management company to liability (improper insurance coverage, Fair Housing decisions)
- Client exposes community to liability (improper decisions, failing to respond in a timely fashion, selective rule enforcement)
- Client's actions are degrading to the reputation of the management firm
The manager acts as a guide for community Boards of Directors, and
navigating the above situations is no different. Management always tries to work through
challenges first, before resorting to a termination letter. If circumstances permit, 30 days for a course
correction is not unreasonable.
It is disheartening to see a thriving client falter, but the
management company can't hesitate if remedial steps fail. It is easy to let things drag on, but this
may only enable the aberrant behavior to continue.
The way the termination is handled is just as important as
the way service first began. The failed
expectations should be detailed in a formal letter to the Board, showing the
same level of respect as expected in return.
A classy exit not only reflects well on you, but on the management
industry as a whole. Your goal should be
to empower the next management company so that the Board addresses the critical
conditions that lead to the termination.
You want the community to get back on track, regardless of which
management firm is engaged.
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