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For the third time in recent years, our management company has asked us to subscribe to a Real Estate Compliance service. It's not cheap (close to $100 a month). What we wonder is this -- isn't this a service the management company is supposed to provide for the building? If they can't handle it or keep up with it, shouldn't THEY be paying for this service and NOT passing it on to us?
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Try googling "NYC Real Estate Compliance" and you'll get back information about a handful of companies who specialize in that service. From the very brief reading that I did, it sounds like they make sure your building is in compliance with NYC building regulations such as flood insusrance, tax compliance, etc.
I'm assuming that the $100/month is for your entire building and not per apartment. Property management companies, especially the smaller and less expensive variety, tend to offer services like this on an as-needed basis with incremental fee increases.
I'm sure a conversation with your property manager will get most of your questions answered and you'll have a better understanding about what you're being asked to pay for.
basically the management company says they're too busy to effectively monitor this stuff. we did the math - for the last 6 years they've asked us to subscribe and we would have spent a total of $7,200. during the same time period, one issue arose that monitoring would have mitigated - total cost of $700. we are having a hard time justifying...
I agree with Steven424; it's insurance so that if there are any compliance issues, you become aware of them. I would try to negotiate with your PM vendor for them to include this as a value add in providing services; it protects them as much as it protects you so why aren't they simply providing this as part of their service - keeping current on compliance items versus charging you, so that they are aware, as a property management company of regulatory or agency orders etc.?
It looks like this is a question of risk vs. benefit. So far you've only had one issue that compliance monitoring helped resolve. Now think in terms of what could be the worst possible result of missing something that subscribing to the compliance company would have caught? Is it hundreds, thousands, tens of thousands of dollars? It sounds like your management company is asking you to purchase a form of insurance.
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I think you should ask them what it is; they may not have the expertise to manage regulatory or tax monitoring compliance so they pay a firm to do so. It's up to the property management company whether or not these services are "value add" in their pricing or an add on.
I would find out the list of services that their $100 per month covers and compare to you acquiring the services yourself.
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