BOO! No, Not a Ghost: Just "Back-Office Only" Management for Small Buildings
Aug. 14, 2012 — Many small co-op and condo buildings are hiring solely "back-office only" (BOO) services, performed either by a managing agent or an outside firm. The upside is that the building can get crucial financial work done and pay far less than it would pay for full management. The downside is that condo and co-op boards sometimes don't get what they expected or expected more than was promised.
Back-office services are typically the simple financial transactions required to keep a building afloat: collecting maintenance, paying bills and providing the board with a monthly record of the funds that come in and go out. Most BOO managing agents will perform additional services for a fee.
Back-office services are the
simple financial transactions
required to keep buildings afloat.
What you don't get is a managing agent who comes to monthly meetings. You don't typically get help picking or working with vendors or assistance with sales, long-range capital planning or building upkeep. "It's usually great for a building that wants to manage itself, a building that has an active board," saysDon Einsidler, president of Einsidler Management.
How much can you save? Managing agents estimate you pay between 35 and 50 percent less for back-office only compared to full management. But not every agency offers the service as an option. Managing agent Gerard J. Picaso of Gerald J. Picaso Inc. said he used to sell BOO options, but stopped because there were too many instances where boards expected him to do more.
BOOty Call
Managing agents who do BOO say that many of their clients came to them after unhappy experiences with self-management. Pamela DeLorme, president of Delkap Management, says most of her back-office clients are smaller buildings of 15 or 20 units. One perk with her firm, she notes, is that her back-office clients are connected to the firm's 24-hour answering service.
"Say a pipe is broken in the building and one of the residents calls our hotline," she says. "We won't call the vendor for them and arrange to get it fixed, but we have the emergency contact for the board member in charge and will contact them."
DeLorme notes that her company offers more than financial services, keeping her back-office clients aware of new laws and regulations in the city. That's the advantage of having a managing agent do your back-office work compared to a bookkeeper, who might work for a dentist one day and for a condo the next. Plus, like other managing agents, she says that if a larger issue does arise, she can always offer more work for a fee.
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