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I notice that this board can sometimes take a little while to jumpstart a new topic. I'm going to throw it out there for anyone who wants to talk about Board issues and management issues. I'll check back this week, everyday, and will answer any questions that you have from the management perspective.
If I don't respond right away, I'm in the field or in a Board meeting (5 this week), but please do post. I'm interested to see what everyone has to add to the conversation.
Hey CondoGuy1, I can certainly understand some frustration on your part and since I'm not in the shoes of either you or your managing agent, I can only speak from my experience.
If a Board is finding that they are doing the work that they contracted with an agent for, then something is wrong. The Board is a volunteer position and since agents are compensated contractors, in effect, they should be doing the heavy lifting and the bulk majority of the work. There are times that board members have a specialized skill or interest and can add a lot of value by contributing their time, resources and connections, but on a normal basis, this should not be the operational default.
In standard management contracts (not sure which state you're in) there is a Exhibit that shows the different fees over and above the management fee. These can include costs to the homeowners for sales applications, lease applications, bank questionnaires, etc. These are extra frees but they are all laid out. You should have a look at the management contract to see if these do exist. If they don't exist, you can speak with the Board to see how they are charging these without a written agreement.
You also mentioned that the agent is always looking to outsource and spend funds on items that may be free (i.e. the tree removal) while raising your monthly dues as a result of the offset in operating expenses. We're in this business knowing that the fee is the fee and all of the previously approved ancillary charges will be there on the income side, but we're not in the business of referring people out and collecting a bounty for doing so. In some parts of the country those kickbacks are very illegal, including here in NYC.
Your satisfaction could be as simple as changing to another agent that treats your property the same as their own. Mindset is half the game. It's easy to spend someone else's money. It takes great professionalism and common courtesy to work as hard as can be to save you those two cents; over and over again. They really do add up.
Hello CondoGuy1;
Based on your e-mail it appears your board may be taking on too much, and while I am not privy to the language in your management contract, I question why your board is creating RFPs, negotiating with insurers and handling your own tax grievances. I am also concerned about the qualifications of your board to engage in these tasks. I have close to thirty years experience in the industry, consult for self managed and professionally managed properties and have an informational website for board members, and may I tell you that RFPs if written for the express purpose of what they are designed to do have some very technical language, consist of many pages in some cases, have reference to mediation standards, industry standards, and are the corner stone of a good contract. The RFPs I have written are very substantial tools.
Insurance policies are underwritten, sometimes even manuscripted and placed in the commercial market for pricing by your insurance broker or risk manager, in this regard, I am not sure how or why your board is negotiating directly with insurance companies, as they only discuss underwriting and premium with licensed insurance brokers.
The tax grievances should be handled by a certiorari attorney who would then be compensated based on a predetermined percentage which is determined by how much he saves your building community.
I believe this brief forum may not have afforded you the opportunity to fully represent the dynamics of your board's role and relationship with the property manager and how your particular management contract effects this whole situation.
If you would like, you can e-mail me directly or respond back on this board, and I will try to get a better idea of what is happening in your situation.
In summary, most management companies do not ordinarily try to extract fees for work that is included in their contract, but your situation appears to have a little more going on. Let's discuss it.
Our insurance broker pre-dates our managing agent. I caught our managing agent just paying bills, so I beat up on agent, make them get quotes, question coverage. I also go around agent to get quotes and see who will quote. I am ok with the Managing agent also doing it. But I am keeping both insurance agent and managing agent honest.
Same with RFPs, managing agent can do them but if it is big ticket we do our own due dilergence. Sometimes agent is right sometimes not.
The board also directly hired the tax lawyer. Got a law firm that never does small buildings, did ours at a big discount and agreed to collect individually from unit owners. My managing agent wanted a fee to manage process, then we pay lawyers directly then refund owners. That is putting our money at risk. The buildings lawyer and CPA also report to the board. Buildings lawyer is a different one from Tax lawyer
We never hire friends or family, always beat up anyone we hire, no conflicts of interest. We really just want a managing agent to manage building not to talk to us or hold hands.
My building has never had an assessment in history of building and has good reserves. We are interviewing managing agents right now and they almost all have projects they want to do, folks to hire, ways to raise fees, maint etc.
There is a lot of add on services I notice, when we say we have no interest in most if they cost extra they seem to lose interest.
Good morning CondoGuy1:
As I have not formerly introduced myself, as the instructions for this forum request, my name is Margaret Bernato, I own and operate the website askthepropertymanager.com. We are a website predominantly geared to boards that prefer to self manage their buildings or communities but do require advice from time to time regarding best practices about certain matters that they choose to inquire about as opposed to working with a management company, thus avoiding the types of relationships which your post suggests you do not want, and of course saving money on the management contract fee.
Most management companies are professional, dedicated and committed to providing a satisfying client experience, however, if your whole board embraces the same philosophy that you do, your board would probably be best served self managing the building and not having a property manager.
In this regard, your building would probably need a maintenance manager or "Super" super with good organizational and mechanical skills, and your own bookkeeper or bookkeeping service, the latter of which your accountant could help you decide.
I wish your board much success as you interview companies, and possibly consider self management. Please let me know if you have any further inquiries.
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Why do Managing agents nickle and dime? Last one we hired we rarely ever see anymore. Does nothing. Our board does RFPs, we then give it to him for logistics, our board negotiates with insurer and we handle own tax grievances. It is a small building so really need bill pay and someone to be on call for owner issues and walk property.
We interviewed someone new and right away he can bring an engineer for reserve studies, prepare buyer package for fees, bring in his own folks electricians, plumpers etc and gardners. Then to make matters worse he says I can advise you on ways to raise fees.
I am looking at him like we have our own lawyer, own CPA, own gardener, own handiman, own insurance broker, own snow removal service. We want someone to over see it and if you can find better folks for same price or less give us some advice. Instead he was talking about raising maint. Then he said he could approve renters for a fee and track renters and we could charge a fee.
Only folks renting are folks in a nursing home, job out of state or underwater on mortgage and had to buy a house.
I felt he did not know building and in end we said honestly we never want to talk to you. That is what we are paying you for. Just do the job.
last guy was not happy with his fee for doing it as he cant get extra money referring friends. For example he said he could cut down curbside trees, he knows a guy, I called town they did it for free. He could do our tax grievance for a fee, board hired guy for no fee, owners pay if they want to do it directly at a low rate.
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