Maintaining transparency in all facets of property management is absolutely essential. Not only can conflicts of interest breed problems of trust or raise ethical questions, they can even have legal ramifications if someone stands to benefit outside of legal guidelines. This is especially true pertaining to conflicts of interest between management companies and developers, during the transition of control.
For this reason, it’s always a smart idea for a Homeowners Association (HOA) to hire a new management company post-development. An existing relationship between a management company and a developer means that same management company can’t be impartial when representing the HOA. Bringing on new HOA management in Chandler, AZ resolves this entirely.
What’s the Conflict of Interest?
The question is often, “What does a management company have to gain from a relationship with a developer?” The answer is—as it almost always is—financial in nature. Management companies are often more willing to overlook developer defects in exchange for continued business from the developer. This is great for the management company and the developer, but the residents are left with lackluster results.
Bringing in new management means bringing in someone with objectivity. Defects won’t be skipped and benchmarks for quality are established higher, where they should be. New management will also bring with it new, objective experts—such as engineers, who pave the way for quality moving forward and ensure developers are held to high standards.
What Variables Need to Be Controlled?
The process isn’t as simple as “out with the old, in with the new” when it comes to bringing in new HOA management in Chandler, AZ. In fact, there’s a laundry list of boxes that need to be checked for a transparent transition. Having these items ensures nothing is being swept under the rug during a transition and can bring to light prior conflicts of interest.
These documents can include articles of incorporation, CC&Rs, annual reports, bylaws, financial filings, the common area tract deed and any meeting minutes. These establish the prior record and help the new management pick up the task more efficiently.
This includes all day-to-day records or manuals, managed funds, budget items, current account statements and balances, accounts payable records and invoices, both outstanding and recent. Financials will shed light on the goings-on of the association. Insurance policies would also be included here.
This includes all records of current unit owners as well as recently vacated persons. Also included here would be approved vendors and any current contracts with vendors for services.
Any and all plans, blueprints or drawings pertaining to the common area facilities are needed, as well as landscaping diagrams and utility maps. Any existing or previous warranties need to be validated with paperwork. Finally, details and confirmation of compliance with all facilities codes need to be on record with the new management company and the local governance.
Eliminating Conflicts of Interest
Realization for the potential of a conflict of interest is the first step for a HOA in protecting itself and its residents from collusion. Bringing in an impartial management company and furnishing them with everything they need to take the reins means installing a new level of transparency and trust.