The Decision Is Usually Made Long Before Anyone Says It Out Loud
Most boards don't wake up one morning and decide to fire their management company. It's more like six months of unreturned calls, a reserve study that never got ordered, and a vendor invoice that nobody can explain. By the time someone finally puts it on the agenda, half the board is already done.
If that sounds familiar, you're not alone — and you're not wrong to consider making a change. But how you execute the termination matters a lot. Do it carelessly and you're looking at gaps in vendor payments, missing records, and a community that's suddenly very aware of the chaos behind the scenes.
Here's what actually needs to happen.
Read the Management Contract Before You Do Anything Else
This sounds obvious, but a surprising number of boards have never read their management agreement in full. Pull it out and look for three things specifically: the termination notice period (commonly 30, 60, or 90 days), whether there's a cause vs. no-cause distinction, and what the contract says about records transfer.
Some agreements require written notice sent via certified mail to a specific address. If you send it to the wrong address or use the wrong method, your notice period doesn't start running. That's an extra month or two of fees you didn't need to pay.
In California, management companies handling HOA funds are generally governed by the Davis-Stirling Common Interest Development Act, which gives associations fairly broad authority to terminate contracts — but your CC&Rs and the management agreement itself set the actual terms. Illinois boards should check both the Illinois Condominium Property Act (765 ILCS 605) and the Common Interest Community Association Act if your community is a non-condo HOA. Neither statute hands you a free exit from a private contract.
Give Proper Written Notice and Keep a Paper Trail
Once the board votes to terminate — and yes, that vote should happen at a properly noticed meeting, with minutes reflecting it — send the termination letter via certified mail with return receipt. Keep the green card when it comes back.
State the effective termination date clearly. If your contract requires 60 days, count carefully. Some boards write something vague like "we'll be transitioning in two months" and then argue later about when the clock started.
You don't need to explain yourself extensively in the letter. A simple statement that the board has voted to terminate the management agreement effective [specific date] is enough. Drama in the letter doesn't help you.
Start the Records Recovery Process Immediately
This is where a lot of transitions go sideways. Management companies hold a substantial amount of association property: bank account access, vendor contracts, insurance certificates, homeowner contact lists, meeting minutes going back years, and sometimes the original recorded governing documents.
In California, Civil Code Section 5810 requires that management companies return association records within a reasonable time after termination. Illinois law similarly treats those records as association property. That doesn't mean the handoff will be smooth — sometimes it isn't, and you may need to be persistent.
Send a written records request at the same time as your termination notice. List specifically what you're asking for: bank statements for the prior 24 months, a current delinquency report, all executed vendor contracts, maintenance logs, and anything related to pending violations or open architectural requests. The more specific your list, the harder it is for a former manager to claim they didn't know what you wanted.
Line Up the Transition Before the Termination Date
The 60 days between your notice and your effective termination date isn't a waiting period. It's your runway.
If you're replacing your management company with a new one, get them selected and under contract before the termination takes effect. If you're moving to self-management — which more boards are doing, especially with software tools that weren't available ten years ago — figure out exactly who on the board is handling dues collection, violation tracking, and vendor coordination starting on day one. Platforms like Boardly were built specifically for this transition, giving boards the infrastructure to manage their own community without needing to hire another third party to do it.
Don't let there be a gap where nobody is managing bank accounts or responding to maintenance emergencies. One burst pipe with no active manager on record is a bad week for everyone.
Tell Homeowners What's Happening
Boards sometimes want to keep the transition quiet until it's done, which is understandable but usually backfires. Homeowners notice when the management company's name disappears from communications. Confusion leads to rumors.
A short, factual notice to the community — the board has decided to make a change in management, the transition will be complete by [date], here's where to direct questions in the meantime — is almost always better than silence. You don't need to explain the reasons in detail.
One Last Thing
Change the bank account signatories and online portal passwords before the termination date, not after. This is easy to forget and occasionally very costly not to.