How Management Companies Are Tackling the Regulatory Onslaught

Compliance with local laws is a crucial part of every co-op and condo board’s duty to maintain building safety and avoid costly fines and penalties. But with the tsunami of city regulations, rules and inspections constantly pouring in, it can be challenging to stay on top of it all. The good news: competent management companies are rising to the challenge.

As regulations proliferate at a dizzying rate, many property management companies now have staff dedicated exclusively to compliance, notifying them of deadlines and existing violations for the co-ops and condos in their portfolios. The job is so demanding that management companies often rely on sophisticated software and the help of third-party compliance companies that monitor violations, send alerts and help with corrective actions.

“Compliance has blown up to such a herculean task that no one manager can handle it for their buildings,” says Dennis DePaola, chief legal officer at Orsid New York. “Boards can sleep better knowing that there’s a team supporting them.”

Think of management and compliance companies as being on opposite ends of a pipeline that moves data from one system to another. Compliance companies extract a trove of public data from city and regulatory agencies — from the Department of Buildings to the FDNY to the Department of Sanitation — including local laws, inspections and filing deadlines, open violations, and building histories. They then digitally transfer this data to their management company clients.

Because there is so much information, many management companies have created their own programs that distill the data into a more digestible format. The seven-member compliance team at FirstService Residential, for example, relies on the compliance platform SiteCompli as a first step.

“It collects all the data and puts it into a nice, neat web portal for us,” says Stephanie Cardello, the firm’s head of compliance. “Then we adapt it into Excel spreadsheets and Smartsheets, and from that we manipulate the data to create a digital dashboard.”

Managing agents and property managers log in to their dashboards, which are broken up visually into categories, allowing them to see at a glance where their buildings stand on everything from parking garage inspections to facade repairs. Each manager can access their properties, Cardello adds, “and easily toggle through the dashboard for each of their addresses."

Orsid New York, which works with the compliance firm Jack Jaffa & Associates, has also developed its own user-friendly interface. Orsid’s four-member in-house compliance team boils down Jack Jaffa’s granular weekly and monthly reports, which bore deep down into such details as the status of each boiler in a building.

“The reports can be as long as 80 pages, but the information isn’t tailored to what management needs to know, so we compress it to one page,” says Nita Durakovic, Orsid’s compliance manager. There’s a box for each local law, whether it’s Facade Inspection & Safety Program repairs, parapet or elevator inspections, or carbon emissions. “Each box is color coded,” she adds. “If it’s in red, the work or inspections are due within the year. Yellow means it’s due within the next two to three years. If it’s green, you’re in good standing.”

It's a lot of data and a lot of work — and an added expense — but in the end it's worth it.  If a management company uses a third-party compliance-monitoring solution, there is often an additional charge your co-op or condo will have to pay. This charge is typically listed in the management contract as a flat fee. But it beats the alternative of paying off a mushrooming pile of fines.

“Having a compliance team has really helped us cut down on violations,” says Keith Werny, president of FirstService's City Line Property Management Division. “It’s not 100%, but it’s very close.”