The Ultimate Board Cheat Sheet to Creating an RFP

Interviewing a management company is no doubt important – finding a true partner beyond the facts and figures matters for a mutually beneficial working relationship. But before any company can confidently say how they can best serve your community, you need to know how to create an RFP, also known as a request for propsoal.  If an RFP is written up to provide necessary information up front and answers to follow-up questions, you streamline the selection process, set expectations from the very beginning, and ensure a truly productive and long-term partnership. Read on to get our top tips for creating an effective request for proposal. 

What is a Request for Proposal?

In an HOA, the request for proposal (RFP) is a formal document requesting a bid for management services. The document should include essential information about the community and its needs, expectations, and requirements. An RFP is typically drafted by the board of directors or an appointed committee in an HOA.  HOAs should issue their request for proposal once they know that they are ending their relationship with their current community management company. The RFP should kick off the process of selecting a new management company. 

How to Create an RFP 

To create an effective request for proposal, you should be prepared to address the essential aspects of your community and be forthcoming about the boards’ expectations and management strategy. Make sure to include: 

• The basics. Association history, distinguishing features, number of homes and members, and type of community (townhome, condo, single-family)
• List of amenities. Pool, clubhouse, gates, deeded parking, etc. 
• Board information. Number of board members, available internal resources, communication strategy and volume, and vendor and service provider management.
• Meeting information. Meeting frequency, types of business conducted, etc.
• Financial information. Current financial state, assessment frequency, and anticipated increases or special assessments.
• The board’s expectations. Management philosophy, recent challenges, and goals.

Read More: 115 Sample RFP Questions to Ask an HOA Management Company

The Important Things to Include in an RFP

If you know how to write a request for proposal, you'll include plenty of pages with reponses to the following questions and statements related to your board's management. 

• How frequently the association changes service providers and how frequently the board goes out to bid. What dollar amount determines if you will bid out for a project or just use an existing vendor?
• Explain whether the board’s approach is to problem solve with their vendors, attorneys, managers or other service providers or if they prefer to move on with another provider after one strike. 
• Communicate whether the board understands the difference in service levels between a dedicated manager, semi-dedicated manager or portfolio manager or if they need an explanation.
• Make it clear whether the board allows the manager to use their company’s internal resources to help them complete work or do they consider it a conflict (e.g. general maintenance providers, construction divisions, the company’s newsletter program, etc.)
• Be direct about the board’s understanding of the financials, if the board is engaged in the financials, or if they prefer to just be informed about the financial state of the association from afar.
• Explain if the board prioritizes their work and stays on time and on task, or they take more of a "du jour" approach with action items.
• Have an honest conversation about expectations being in alignment with the fees they have budgeted or can afford to pay. Let the bidders know if the board wants Nordstrom shoes at Payless prices.
• Clearly state whether board meetings run on time and on task or if the board functions in a more social way at meetings.
• Tell the prospective bidders the expected volume of email traffic and the expectations for responses.
• Let the prospective management company know how much business is conducted between board meetings.
• Explain whether the board wants the manager to be part of the community or just a business agent.
• Make sure to identify whether the board is unified and cohesive or if there is friction and major differences between board members.
• Tell the bidders about the board’s management philosophy. Do they want to direct the action to a manager or manage the action themselves?
• Be direct about how the board wants to do business with regard to approving and paying bills, sending items out to bid, etc.
• Let the prospective bidders know the culture of the community and the most distinguishing characteristics of your board (or community).
• Sum up the reasons the board has decided to entertain bids and seek new management and explain the single most important thing the board wants to accomplish.
• Explain the community’s biggest challenge.
• Advise the prospective service provider of the top three issues the board has spent their time on in the last twelve months.
• Always let the bidder know if the board is currently considering any special assessment or an increase in annual assessments.
• It’s wise to advise the prospective service provider if board meetings have been adjourned in the past because business cannot be conducted due to board member disagreement or disruptive homeowners.
• Be candid about how many management companies the association has had in the last five years.

What Happens After You Submit an RFP?

After you’ve submitted an RFP, management companies will respond by sending their proposals, providing thorough information about their company and a pricing bid for their services. Once you’ve had a chance to carefully review, evaluate, and compare your list of proposals, you should be well informed and confident enough to move forward and conduct interviews with a select number of candidates and ultimately make your final decision.

Related: Top Questions to Ask Before Hiring Your Next HOA Management Company

The Impact of an Effective RFP 

While providing all the information outlined here might seem like an overly detailed approach, understanding how to create an RFP will help ensure any partnership between your community and a management partner begins well and goes on to be productive and pleasant.