Management Alternatives

This is the first of a two part blog on whether to hire a management company for your property. It was written by Owen Dowling.

One of the primary decisions that faces a new condominium board is whether it should hire a management firm to act as its agent to run the building.

Several management alternatives are available to a board. Self management is one technique especially suited for a smaller building that is cost-conscious and has board members with the time and the talent to do a good job.

Many property managers are quick to point out valid pitfalls inherent in self management, but this is often the best alternative for a small, well-designed building with 12 units or fewer. Lack of experience is ofter cited as a good argument against self management.

A resident manager could be employed by a board to perform duties under the direction and control of the board. This alternative requires an experienced board because it must supervise its own manager. The trend is to develop a strong dependency on the resident manager, and this is the primary pitfall with this type of management. It is dependent on the quality of the individual selected.

The alternative that many medium to large condominium building select is to hire a professional property management firm.  The management agreement typically outlines the duties of the agent property manager to the Board and vice versa. These agreements are generally quite specific and tailored to meet the needs of a particular board.

There are six basic reasons to consider hiring a property management firm:
1. Experience and knowledge of property management and buildings in general is of primary importance.
2. The management firm is sensitive to the special concerns of condominium boards and owner problems. A feel for the condo-community is a very important perspective.
3. Managements ability to anticipate problems is as important as the ability to solve problems.
4. Continuity of service unaffected by owner and board member turnover and board member burnout.
5. Equity protection - a well-run building looks better, operates efficiently and produces optimum resale value.
6. A management firm provides a fresh external perspective that is unbiased and not subject to the special interests of a few owners. Professional thoughts and actions are always desirable.

Our next blog will cover the functions and duties of a property manager.