Developing Successful Relationships With Homeowners’ Associations

HOAs usually have several committees to handle the various aspects of exterior care and maintenance required in managing a multiple property community or neighborhood. Those committees may include one that handles architecture, such as specifications for roofing material or exterior house color, one that handles site planning, such as road construction and amenity maintenance, and naturally, one that handles landscaping and related services. These committees choose the service providers for many of the projects, including contracting with a landscaping company for mowing, lawn care and other site maintenance. Typically, residents of condominium or neighborhood communities develop an HOA and then pay a fee to a management company to handle the financial aspects of the association, although some HOAs are self-managed.

DEVELOPING RELATIONSHIPS. Regardless of the type of HOA, a landscaping company foreman usually deals directly with a property manager who oversees the entire neighborhood/community or a designated area of a community. In some instances an entire HOA landscaping committee or committee chairperson will deal with the foreman. Fred Hollmann, owner of Cincinnati, Ohio-based Fredericks Landscaping Inc., prefers the former scenario. "We generally like to deal with the manager of a property who oversees the whole site," he said. His reasoning is that individuals on a landscaping committee will sometimes want to focus on the areas near their home and ignore other areas of a property. A property manager, on the other hand, tends to look out for the betterment of the whole community.

Hollmann, whose company does work for more than 30 HOAs, said a landscape company foreman’s relationship with a property manager is the primary key to the success of dealing with an HOA. That relationship involves educating the manager about practices being used on the properties, keeping current with contracted and additional work on a property and addressing the complaints a manager receives from residents.

According to Hollmann, a property manager’s job is to manage the money for an HOA, organize all of the services to be conducted in the community and to be a liaison between residents and service providers. Therefore, the manager looks to a landscape foreman for education about the services being done, why they are being done, how long they will take, when they will take place and how it will affect residents’ lifestyles. One practice Hollmann uses to help in this education is sending a manager articles related to landscaping practices or local news about the environment and community. For instance, he recently sent an article to several property managers about maple trees dying in the Cincinnati area. He said that article helped reinforce the fact that the tree die off was a citywide problem and not necessarily a company’s fault. "Our job as contractors is to educate the managers so they have a little more understanding about what’s going on," he said. "You have to educate them so hopefully in return they’ll back you up if needed."

Because the property manager works for an HOA, a landscape company’s defense is not guaranteed by the manager even when a solid relationship is established. "You have to deliver what you’ve promised," explained Hollmann. "A property manager will stick up for you to a certain point, but if you’re constantly behind on mowing, pruning or other projects, he has no choice but to get someone else next year or cancel your contract." He also noted the importance of communicating any changes in schedules to a property manager as soon as possible. If a mowing schedule changes, a planting date is pushed back or applications are postponed, the property manager needs to know ahead of time to be able to answer residents’ questions as to why the work is not being done.

Although residents are supposed to take complaints to a property manager first, some may catch a foreman off guard in the field with a complaint. Hollmann said the best practice to follow is to take that complaint, no matter how absurd, directly to the property manager and handle it together. "You can’t take any of the complaints lightly," he said. Handling complaints together will strengthen the manger/foreman relationship, give the manager an idea of what complaints are warranted and help the foreman to better understand the expectations of the community. Through that process, Hollmann said a manager will typically be able to weed through customer complaints and determine who is a chronic complainer and who has a legitimate grievance about the landscaping.

Hollmann also said a company should be wary of situations in which a foreman will not be dealing directly with a property manager or a landscape committee and instead be dealing with individual residents in an HOA. "If there are 200 properties, there are 200 bosses and 200 different ways they think it should be done," he warned. Therefore, he suggested looking for properties to bid that have one person as a job site contact.

BIDDING HOA CONTRACTS. The bidding process for contracts with HOAs usually begins with an HOA or a management company sending out an invitation to bid a property or properties. Bid packages commonly list all of the services an HOA is looking for in the upcoming year. A package often covers all landscaping services, including mowing, irrigation maintenance and/or installation, pruning, design/build, lawn fertilization, tree and shrub care and snow removal. Some packages include turf area and other property measurements, but Hollmann warned that the measurements are not always correct and recommended that a foreman go to a property and get his own figures before submitting a bid.

In the case of management companies that manage several HOA-run properties, the bidding process can involve more than one property. The management company will send a bid package listing all of the properties it manages, and landscape companies choose what properties they want to bid. Hollmann said geography plays a major role in determining which properties his company bids, as it is important for his routing schedule to operate close to the company’s headquarters. Other factors to consider when choosing properties include how much work is involved, whether the company offers the services detailed in the bid package and if the company can offer a competitive bid to get the job.

After successfully bidding a contract Hollmann likes to set up a meeting with the entire HOA board. At this meeting, he or the foreman for the property presents the board with details about the services the company will provide for the contract period. Hollmann prefers to meet with the entire board rather than just a landscape committee because he wants to let everyone know what to expect. Oftentimes, other residents attend the meetings, so they benefit from the presentation as well.

BENEFITS. Hollmann sees several advantages to working with HOAs. If he didn’t, then his client base would not include more than 30 HOAs, which represent 60 percent of his revenues.

Hollmann said there is always the opportunity to add extra services to a contract whether dealing with a residential, commercial or HOA-run property. The difference between residential and commercial contracts vs. HOA contracts is the potential to add one extra service to multiple properties, which can increase profits exponentially. "Contract additions are usually on a grand scale vs. one individual house," he said. "In a community of 100 or 200 homes, the scale of generating extra sales is a lot more likely to occur."

Related to adding additional services to a contract is the fact that most dwellings in HOA-run properties or neighborhoods are built at roughly the same time, which means most repair needs will occur at the same time. For instance, an irrigation system could be installed on all 100 properties in a neighborhood within the first year of its existence. Typically, the system will undergo the same rigors of use neighborhood-wide and need repaired at roughly the same time. Hollmann said that repair needs come on a fairly predictable basis. "What we see in most condominium developments that after 10 years the original aspects of the properties and landscapes have declined. It gives us the opportunity to renovate and add extra sales," he said.

The size of the properties is also an advantage Hollmann sees to dealing with HOAs. He said, "It’s a lot easier to manage a larger site than a smaller site. At a large site, you have to be so organized in everything you do. For example, your mowing crews, pruning people and spray technicians all have to be right on target. It’s just an easier property to manage because it’s bulk."

Hollmann also cited the billing of HOA accounts as a major advantage over billing for typical accounts. With one bill to send for 100 properties vs. 100 bills for 100 properties, an accounting department will have considerably less paperwork to deal with. Billing an HOA involves sending one bill to the association or the association’s management company and receiving one check for the payment. Payments also tend to be paid quicker than residential bills as an HOA or management company is prepared to pay bills ahead of time. Hollmann said the HOAs can then deal with getting individual payments from homeowners and deal with their late payments without affecting his company’s collection.

DISADVANTAGES. Although his company deals predominately with HOAs, Hollmann does see some disadvantages to dealing with these organizations.

First, Hollmann said that because homeowners are paying a fee to belong to the association, they expect everything to be perfect all of the time, whether it’s landscaping, roofing, painting or other tasks. Given the volatility of weather or other variables out of one’s control, work can not always be completed on time. For work in common areas, especially, people expect jobs to be done when they are scheduled. So instead of one homeowner being upset, there are multiple residents with the same complaint.

Loyalty, which is an advantage that comes with residential accounts, is virtually nonexistent when dealing with HOAs. This can be more of a problem as a new board is nominated for an HOA because the new members may have a different agenda than the previous board. "With residential homes, people will stick with you even though there are some problems," explained Hollmann. "In the condominium end, it’s such a bid war that if one company comes in cheaper and will do the same thing, why not use the cheaper company."

Competition becomes a disadvantage, as bid wars are commonplace in soliciting HOA accounts. Because an HOA is usually out for the lowest possible price to keep costs down for its members, contractors have to deal with more turnover on HOA accounts. Hollmann said a lot of companies bid fairly low on contracts just to get work. He said he has often wondered how some companies can offer such low prices, and he believes those companies just do not understand what their costs are. He does not worry too much about those type of competitors as he said they usually can not compete on the larger scale clients Fredericks Landscaping is accustomed to.

Hollmann also said companies that underbid are not necessarily low-ballers. Instead he believes they just don’t understand everything that goes into HOA contracts and will often run into trouble when winter arrives or when special projects come up because they do not posses the appropriate skills to handle those situations. Incidentally, Hollmann said, "A lot of times you are judged on how well your snow removal is. If you can’t handle [an HOA’s] snow, they figure you’re not going to handle their landscaping."

Another disadvantage Hollmann mentioned oddly enough relates to a company doing a good job with landscaping and maintenance. He said that sometimes a company will work on a property for several years and have it in terrific shape only to be underbid and lose the account. If an inferior company earned the contract, Hollmann said that company may be able to ride the established landscape for a year or two before it shows the effects of poor service. In those instances, the HOA will realize too late that it has made a mistake and will have a variety of problems to fix with the property. That situation has happened to Fredericks Landscaping in the past, and Hollmann said he does not always take those properties back when they come to him for reestablishing a contract. "It’s a call your sales people have to make," he explained. "Do you really want to go after that contract after you know the mentality that board is inclined to?"

Overall, Hollmann touts the possibilities of success with HOA contracts. It is a business, so it naturally has its hardfalls, but he said that’s just part of the game. "It’s always going to be competitive, and that’s just something you have to deal with as an owner," he said.