How to Fire Your Community Management Company: A Guide for HOA and Condo Boards

Firing your community management company is never an easy decision and can feel uncomfortable for many board members. However, as the elected stewards of your HOA or condominium association, it sometimes becomes necessary to make this tough choice in the best interest of your community. Remember, the board has the authority to hire and fire a management company without requiring a full membership vote.

If your community has been dealing with persistent issues, it might be time to consider a change. Common reasons for terminating a management company include poor or untimely communication, unsatisfactory customer service, failure to perform essential management services like recurring maintenance tasks, messy financial reporting, and high staff turnover.

The first step in making this transition is to carefully review your current management contract. Key areas to review include:

• Notice Requirements: Verify the required notice period, which could be anywhere from 30,60, 90, or more days.

• Contract Term: Check whether you are in a fixed-term agreement or a month-to-month arrangement.

• Termination for Cause: Confirm if the agreement allows for early termination due to breach of contract or poor service.

When it’s time to act, it’s essential to follow the contract’s guidelines for providing notice:

• Provide Written Notice: Send the termination notice in writing.

• Delivery Method: Use both email and certified mail to the official address listed in the management agreement.

• Documentation: If terminating for cause, document the reasons and provide supporting evidence of the breach of contract.

Terminating your management company is just one part of the process. Be sure to:

• Identify a new management company in advance. The firing and hiring process happen simultaneously! The incoming management company will be the one to collect records from the outgoing management company, you want them working together to avoid a lapse in management.

• Ensure all association records, keys, financial documents, and contracts are properly transferred.

• Communicate the change to homeowners to keep them informed and maintain trust in the board’s decisions.

Sample Termination Letter

[Association Name]
[Address]
[City, State, ZIP Code]
[Date]

To: [Management Company Name]
[Management Company Address]

Subject: Notice of Termination of Management Agreement

Dear [Management Company Representative’s Name],

This letter serves as formal notice that [Association Name] will terminate the management agreement dated [Contract Date] between our association and your company. Per the terms of the agreement, we are providing [X days] notice, making the termination effective on [Termination Date].

[Optional: If terminating for cause, include a brief statement citing the breach of contract and supporting documentation.]

Please coordinate with the board to ensure a smooth transition of records, financials, and operational materials before the termination date. Should you have any questions, please feel free to reach out to us.

Thank you for your past service to our community.

Sincerely,
[Board President’s Name & Signature]
Board of Directors, [Association Name]

By approaching this process with clarity and professionalism, your HOA or condo board can successfully navigate the transition while protecting the best interests of your community.