10 Red Flags When Interviewing an HOA Management Company
Don’t just interview the company. Interview the operating model.
Choosing an HOA management company is one of the bigger decisions a board will make.
Yet many interviews revolve around questions like: How many communities do you manage? How many employees do you have? How long have you been in business? What does your portal look like?
Those questions are not useless. But they may tell you remarkably little about what your board actually needs to know.
A polished presentation, large staff, impressive technology, and hundreds of communities under management can all look reassuring. They can also hide an operating model that gives the board less control, overloads the assigned community manager, limits access to association money, or makes accountability difficult when something goes wrong.
The management company wants control of your reserves
One of the first questions I would ask a prospective management company is:
Who controls our reserve funds?
Not who reconciles the account. Not who uploads the financial statements.
Who actually controls where the money is held and what the board is allowed to do with it?
Your management company is a service provider. Your reserve money belongs to the association.
In Utah, state law recognizes that HOA and condominium boards may prudently invest reserve funds, subject to applicable restrictions in governing documents and law. Utah law also requires reserve funds to be maintained separately from other association funds.
A management company should help the board maintain control and access to its money—not create unnecessary barriers between the board and its own reserves.
Ask these questions
- Can our board choose the financial institution holding our reserves?
- Can we move reserves if the board determines another institution is more appropriate?
- Can we work with an independent licensed financial adviser?
- Will your company cooperate with board-approved transfers and investment decisions?
- Does your company receive any financial benefit from the bank where you want us to keep our money?
If moving your HOA’s own money requires permission from the management company, something is backwards.
“We manage thousands of homes” is presented as the main selling point
Boards often hear portfolio size presented as proof of quality:
“We manage 20,000 homes.” “We have hundreds of communities.” “We are one of the largest management companies in the state.”
Why should that make the board feel better?
Size can provide resources. Larger companies may have specialized accounting departments, call centers, technology teams, compliance departments, and substantial institutional knowledge.
Those can be legitimate advantages.
But your HOA does not experience the management company’s total employee count.
It experiences the people assigned to your community.
A company with 300 employees does not help much if your assigned community manager is carrying a portfolio they cannot reasonably service.
Instead of asking “How big is your company?” ask:
- How many associations will our community manager personally manage?
- How many total homes does that represent?
- How many board meetings are they attending each month?
- Who handles homeowner calls, architectural requests, violations, work orders, invoices, inspections, and vendor follow-up?
- What happens when our manager is out of the office?
- What prevents your company from continuing to add communities to a manager’s portfolio until service suffers?
Growth is not automatically a sign of strength. Sometimes it is simply growth.
The management company wants to be your investment adviser
Reserve funds should not necessarily sit untouched for years if the association has prudent opportunities to earn income on funds it does not immediately need.
But there is an equally important distinction:
Your HOA management company is not your financial adviser.
A community manager can help the board understand reserve balances, provide the reserve study, identify upcoming capital needs, maintain accurate financial records, and coordinate with professionals selected by the board.
Management should not independently design an investment strategy, recommend specific securities, build an investment ladder, or present itself as qualified to determine how reserves should be invested unless the person providing that advice is separately and appropriately licensed.
That responsibility should be deferred to a qualified financial adviser who understands community-association reserves, liquidity requirements, preservation of principal, insurance limits, and the timing of future capital expenses.
Ask:
- Can our board work with an independent licensed financial adviser?
- Will you provide that adviser with the reserve study, cash balances, projected capital needs, and other information they need?
- Will you cooperate with moving reserve funds into board-approved accounts or investments?
- Does your company require us to keep reserves at a particular financial institution?
- Does your company receive compensation, credits, incentives, or other financial benefits from that institution?
- Are you giving us investment advice, or helping us coordinate with someone licensed to give it?
At HOA Love, we believe the board should retain control of its reserve funds and have the freedom to work with independent financial professionals.
If a management company wants to control your reserves and tell you how to invest them, the board should be asking a lot more questions.
Nobody can clearly explain how the management company makes money
The monthly management fee is rarely the entire economic relationship.
There may also be:
- Resale and disclosure fees
- Collections charges
- Document fees
- Administrative charges
- Mailing charges
- Inspection fees
- Project-management fees
- Technology fees
- Banking arrangements
- Insurance relationships
- Vendor relationships
- Investment relationships
Some of these fees may be completely reasonable.
Running an HOA management company costs money.
The problem is not that management companies make money. They are businesses. They are supposed to.
The issue is whether the board understands how they make money and whether any incentive could conflict with the association’s interests.
Do you receive compensation, credits, rebates, referral fees, revenue sharing, or other financial benefits from companies our association may use?
A good answer does not necessarily have to be “no.”
It does need to be clear.
The board has to go through management to understand its own finances
Your management company should make financial information easier to understand.
Not harder.
A board should be able to quickly determine:
- How much cash the association has
- How much belongs to operating versus reserves
- Where the money is held
- Whether accounts are reconciled
- What invoices have been paid
- Which invoices remain outstanding
- How actual spending compares with budget
- Whether reserve contributions are occurring
- Whether cash-flow problems are developing
If every financial question requires three emails and two weeks of waiting for someone in accounting to respond, that is not transparency.
It is dependency.
Ask the management company to show you an actual sample financial package during the interview.
Then ask a board member to find the current operating balance, reserve balance, accounts receivable, budget-versus-actual spending, bank reconciliation, and monthly reserve contribution.
If the financial package requires a forensic accountant to understand it, that is not a feature.
Their technology gives management more visibility than the board
Technology can dramatically improve HOA management.
But a portal is not impressive simply because it exists.
What can the board actually see?
- Can board members see open homeowner requests?
- Can they see work orders?
- Architectural requests?
- Violations?
- Invoices?
- Financial reports?
- Projects?
- Vendor documents?
- Communication history?
Or does management see everything while the board receives periodic summaries of what management chooses to show?
Technology should create transparency and accountability. It should not simply digitize the gatekeeper.
They talk about “taking everything off the board’s plate”
That sounds appealing.
Board members are volunteers. Most do not want another full-time job.
Management absolutely should reduce the administrative burden placed on directors.
But there is an important distinction between handling the work and taking control of the association.
The board remains responsible for governance and material association decisions.
The management company should carry out board direction, provide professional support, bring issues forward, present options, identify risks, and help the board understand what decisions need to be made.
A good manager brings the board information, recommendations, risks, options, and professional resources. The board decides. Management executes.
They do not ask difficult questions about your community
The interview should work both ways.
A management company should be interviewing you, too.
I would want to know:
- What condition are your reserves in?
- When was your last reserve study?
- Are assessments realistically funding operations and future capital expenses?
- What major projects are coming?
- How old are the roofs?
- When was the asphalt last evaluated?
- Are you dealing with insurance issues?
- What does homeowner communication look like?
- What frustrates your board about the current management arrangement?
- Are vendors actually being evaluated?
- What does the board want the community to look like five years from now?
A management company that asks almost nothing may simply be interested in adding another contract.
The important question may not be “Does this company want our business?” It may be “Do they understand our community well enough to know whether they should take our business?”
They promise low dues instead of financial stability
A management company should not win the board over by promising to keep assessments artificially low.
Management does not control inflation.
It does not control insurance markets, roofing costs, asphalt costs, labor costs, utility rates, or the useful life of major common elements.
What management can do is help the board plan.
- Realistic budgeting
- Adequate reserve funding
- Preventive maintenance
- Long-term capital planning
- Difficult conversations before they become financial emergencies
The goal is not the lowest dues. The goal is the correct dues.
There is a very big difference.
You leave the interview impressed but still do not know who is accountable
This may be the biggest red flag.
Large management companies can have regional managers, portfolio managers, community managers, assistants, accounting teams, maintenance coordinators, call centers, compliance teams, transition departments, and corporate offices.
That structure can provide tremendous resources.
It can also make accountability surprisingly difficult.
When something important falls through the cracks, who owns the problem?
Not which department.
Not which ticket queue.
Which person?
Boards should not have to navigate an organizational chart to get an answer.
The best HOA management interview questions are not about the sales presentation
A management-company interview should ultimately tell the board five things:
The board should understand where funds are held, who can move them, and what restrictions management imposes.
The board should know which person owns follow-through when something important needs attention.
Staffing matters only if the people assigned to your community have enough time and support to actually serve it.
Boards should understand financial incentives, fees, vendor relationships, technology, and access to association records.
Good management should do more than process transactions. It should improve the information available to the board.
At HOA Love, we believe management should strengthen the board’s ability to govern.
Boards should understand their finances. Boards should control their money. Boards should be free to work with licensed professionals regarding reserve investments. Boards should have visibility into what is happening in their community. And management should be accountable for the work it agrees to perform.
The biggest company is not automatically the best company.
The cheapest company is not automatically the best value.
And the most polished sales presentation tells you remarkably little about what happens on a random Tuesday six months after the contract is signed.
Maybe the better question is not “How big is your management company?” Maybe it is: “How will your operating model make our community better?”
If your board is interviewing management companies, save these questions and bring them to the interview.
The answers may tell you far more than the proposal.
Better management should create a stronger board—not a more dependent one
HOA Love believes boards should have clear financial information, access to their own records, control of association funds, transparent vendor relationships, realistic long-term planning, and a community manager who is accountable for follow-through.
Would it be unreasonable to ask your next management company to explain exactly how its operating model protects those things?
Learn more about HOA Love management services or contact us at 844-HOA-FIXR or david@hoalove.com.
Sources & Further Reading
- Arizona Community First. (2025). Red Flags When Interviewing a New HOA Management Company .
- Community Associations Institute. Investing in the Future: Building Community Reserve Funds .
- Community Associations Institute. Reserve Requirements — Utah .
- Foundation for Community Association Research. (2026). Community Association Management Company Benchmarking .
- Utah State Legislature. Utah Community Association Act — Utah Code § 57-8a-211 .