Everybody loves telling horrific property management stories, but if to be honest, there are plenty of good and bad property management companies and property managers out there.
How do we understand which property management company would be THE MOST EFFICIENT
for your condo needs?
1. Condo owners’ traditional approach to picking a property management company consists of 3 steps:
- to find a property management company which offers a low service price which condo owners believe might reduce their condo maintenance fees;
- to compare contract prices for regular services of current contracts and contracts’ prices of the services that company offers;
- sometimes – comparison of the maintenance fees of other condominiums that the property management company is currently servicing.
2. Common mistakes during selecting a property management company:
Low price of property management company’s services might lead to the condominium having higher maintenance fee for the owners because a property manager may be working for several buildings rather than focusing on your particular condo building. Such distraction may result in low quality management practice that goes unnoticed until some of the following issues are revealed:
- Overlooking major technical issues; noticing them when something has already happened instead of preventing it. Which often results in accidents (e. g. floods) related to absence of preventive maintenance measures.
- Investing owners’ money into major repairs and replacements that are prescribed by reserve fund study expense plan, but are not necessary, rather than investing the money into repairs and replacements which increase property value.
- Unjustified list of major repairs and replacements just to show the work done rather than investing the money to improve the building technically, ecologically and economically.
- Low quality selection process of service providers, when the condo projects and annual contracts are available only to a limited pool of the same service providers and the costs suggested may not be fair because there is virtually no competition regarding prices and quality.
- Using obsolete technologies for major condo projects.
- Lack or absence of supervision and inspection of the actual work done by service providers.
- No transparency for the condo owners.
3. What should condo owners take into account to make sure that the management company is condo owners’ goals-oriented and efficient?
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Is the property manager focused on a particular condo building or manages several ones? If not, then the list of the manager’s functions and their schedule must be indicated clearly.
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What kind of major repairs and replacements of any building did the company perform recently? Was that aligned with a plan of reserve study expenses in terms of prices and a list of repairs? What was the quality of that repairs? Was it an owners’ goals-oriented project? What did the company do in the past year to improve the market value of a building? It would be fair to review those projects to make sure of their quality, expenses.
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Does the property management company provide frequent technical examination of the equipment and organize preventive maintenance measures?
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How often do accidents (e. g. flooding or fire) happen in buildings that fall under the company’s management?
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How do property management company and the condo board make a list of major repairs and replacements for the annual budget?
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How the property management company select contractors for the project and get the quotes? Are the project tenders published and available to a wide array of independent contractors to ensure fair competition, or it is always a small circle of the same service providers?
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How does property management control what actually job done a quality and a price? Is that transparent for condo owners? Can the owners review the results as well?
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Does the property management company check if a contractor uses new, more economical and ecological technologies when they make an offer for major repairs and replacements, to save the owners money?
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If the property management company combines a number of building projects for reducing the costs when two buildings need the same work done and hire the same company for both buildings for cost and quality efficiency.
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If the property management company has internal financial and engineering expertise and can give quality advice on Reserve Fund contribution amount necessary for the building, and how to spend owners’ money for different needs more effectively.
So, to conclude, a particular property management company’s service price may be higher if it provides more services or a higher quality. Meaning, more focused and more effective property management company that requires new technologies application from service providers to save owners money, combine projects to perform repairs in the most efficient manner, uses new opportunities to collect more competitive offers from highly qualified condo service providers to get the best offers for the best prices. As a result, such company will be able to improve service quality and condo owners’ comfort, provide peace of mind for condo owners, and likely reduce total maintenance fees due to its’ efficiency.
Owners should pay more attention to the company’s commercial offer, projected expenses for owners (maintenance fees), the Board should spend time needed on a comprehensive understanding what owners get for their maintenance fees. Then the Board should visit and overview the condo buildings serviced by that company. And the Board might request those condos owners’ opinion using Condo Owners Help Line or Board Directors Digest of www.condo-social.ca (for registered condo owners and for the board).
Thank you very much for that initiative!