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I know that management fees vary with services etc but our small Condo (18 units) is doing some work to rectify construction defects. Under our current management agreement if the management company project manage they are entitled to charge additional fees. We were attempting to find out if the hourly rate for our manager is competitive but I couldn't find a range of values anywhere and we don't have much exposure to the industry to know. Can anyone give us an idea of the hourly rate that managers of my type of building may charge...?
Join the Conversation Comments (3)Because you have an hourly management fee there is little to do about it until your contract expires. At that point DO NOT sign another hourly agreement. Agree to a monthly fee and stick to it. If you can get capital improvements included that's great, if not negotiate some kind of flat fee. By paying hourly you are encouring the manager to act at a snails pace instead of a Belmont winning horse. A flat fee encourages more rapid completion of a propject. Good luck
Thanks for your reply. We do have a flat rate monthly fee but capital improvements are not included. Capital improvements are charged at a fixed % of the cost of the project. This introduces a conflict of interest because there's no incentive for the manager to minimize costs. On the other hand, like you point out hourly rates provide no incentive to minimize time. We were thinking that management fees for capital improvements should be similar to other professional services like legal, engineer etc.. Our experience with other professional services is that they don't inflate the time taken to do the job but do charge a rate that adequately compensates them for their time. You raise an excellent point that I hadn't considered.
Depending on the scope, your property management company may not be the best person to managing the capitol projects to resolve your construction defects. Hiring any owner's representative firm may be a solution. Then your management company should be focused providing access coordination, accounting support and delivery of general updates to the unit owners.
Suggest the following schedule:
< $50,000 - $1,500
$50,000 - $100,000 - $2,000
$100,000 - $200,000 - $3,500
$200,000 - $350,000 - $7,000
If you management company is overseeing major capital work, you want to understand how they will be staffing the project. It is important that this person has the experience and the clarify their role during the entire process.
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Hi,
I am a co-op President in upper Manhattan. Our Management company, Blue Woods, charges us a flat fee every month which includes managment of capital projects.
Good luck with your search!
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