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Are Property Managers (and their subagents) require to disclose any kind of profit or benefit they might receive from recommending products or services to the Board/Shareholders?
We have an employee of our mamagement company who constantly refers contractors- even though they are most often located 30-50 miles away from our building. A few of the contractors he recommended that the board chose to use, did poor jobs and wound up costing the co-op more money in the long run. Despite this, he still insists we go with his recommendations. I can't help but feel that he is getting some financial benefit out of this. Interested in hearing others thoughts on this.
They are definately getting kickbacks it is required that three bids be submitted to the Board, a requirement by law. Possibly the Board is in it also. You must get a sub committe developed by shareholders to check these bids out and constantly do an audit with management company to see where your money is going. A corporation must disclose all financials to shareholders. Get together to create a advisory board and check all financials and bids.
Are you asking if it is okay to accept kickbacks if you disclose them? I'm asking if it is ever okay for a board or management firm to accept kickbacks as theoretically this would raise the cost of a project and eventually owners pay?
I have heard in some instances a certain vendor may reward a finders fee or referral fee for new business that they are referred. I personally don't like that idea and think it opens the door for unethical behavior and activity. But I wanted to know if in that instance, is a property manager required to disclose when they recommend a vendor, that they are getting a finders/referral fee?
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To say that a property manager never benefited from recommending a vendor/contractor would be a lie. Suspicions mean nothing only hard facts. If you feel the work done is not up to par I suggest you look elsewhere.As a building super/rm the approach I take is to get three bids, discuss the pros and cons etc with the board. In the end I let the board decide.
MRM.
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