Reader question: I am thinking of negotiating a contract with a new property manager for my condominium homeowners association. The thing is they not only want monthly fees for the services they will be providing but they also want fees for something extra. Additionally, any maintenance that will be done they will charge an extra 10 percent over the total cost of the entire job. They actually don’t like the contract that currently exists with our former property manager. Any information that you can share with me will be very helpful. – Judy P
Monty’s answer: There are various types of condominium homeowners association or HOAs which engage property management companies. Most small projects are usually self managed. Some condo projects prohibits the rentals entirely while some do allow for conditional rentals like minimum rental period and other various projects that have absolutely no rental restrictions. All these distinctions are really important because the potential income for the management company can vary considerably based on the condo structure by laws, rules and other regulations. Many other projects do allow unit owners to hire individual agent or company to handle certain rental duties. Many sizeable projects have been known to bid sales and the leasing efforts. They even engage captive real estate agents.
All these components will highly influence the type of fees a property management company must charge to make the responsibilities worth an investment of their expertise and time. Also many property management companies have specialization in certain types of property like apartments. Dealing with the tenants completely differ than dealing with unit owners. With this perspectives, you can better sort out candidates.
The Big Picture
The property management companies that manage HOAs have many responsibilities than the upkeep of the grounds and other improvements. You should look for a firm that advises the HOA about the life expectancies of companies like the roof so that the HOA include sufficient reserves in the unit owners monthly fees. The HOA board is on a tightrope over expenses so being a unit owner the opinions will definitely vary widely. Having a property manager who has good knowledge to advise on by law structure and cost issues will be vey helpful.
Interview multiple companies
You should start first by identifying multiple companies managing condo projects in your area which look great from the street. Create a list that contains six to ten different firms. You should also compose a cover mail which contains your contact information, address of the property, the number of units and the reason why you’re looking for a property manager.
Make the decision
In conclusion after taking the property tours, you should give each finalist a copy of your management agreement which your former property manager or condo manager used and ask them for a review of it. Be open to their inputs on improving the document and ask for suggestions. Then ask for a copy of their standard agreement. This will be a standout point.