I could write a book, but the editor said I’ve got only a thousand words, so let’s think lean and mean. You must (a) consider your Corporation’s requirements; (b) reconsider them, in light of what I’m about to tell you; (c) decide whether your current management can be “fixed”, if not already doing the job properly; (d) assess what’s available out there; (e) pick the correct replacement.
Your Corporation’s requirements
As Board members, you are, obviously, accountable for the administration of the condominium’s “property and assets”, which accountability encompasses a myriad of areas. Many tasks can properly be delegated to professional management, but the Board should retain and fulfill two specific responsibilities:
- monitoring management
- representing your fellow residents.
The latter function is best achieved by understanding the demographics of your condominium environment. A small townhouse community will not require the full-time presence of an on-site manager (nor will there usually be a site office to accommodate same), whereas many high-rise complexes are staffed by a host of site personnel. The key point here is what, in the Board’s opinion, will work in your condominium. I know many cases in which a full-time office is not required, yet it’s operating at full staff because the residents expect it, depend on it, and are willing to pay for it. This may seem inefficient in many ways, but your Board should at least be aware of what’s on your neighbours’ minds.
Your Corporation’s REAL requirements
(1) Cost-savings/Economies of scale; (2) Safety; (3) Communication; (4) Capable site operations; (5) Financial/administration services; (6) Condominium expertise; (7) Accountability; (8) Resources. Many of these are self-explanatory, or are best left to be analyzed in a future article. But let’s elaborate a bit, on just a few of the above topics.
Cost-Savings:
- Bulk purchasing, energy monitoring, knowledge of other properties’ savings techniques.
Site Operations:
- Anticipation of, rather than reaction to, daily occurrences and problems.
- Inspections, inspections, inspections — in other words, management!
- Willingness and ability to enforce the Act, Declaration, By-laws and Rules
Communication:
- How, and how frequently, and how well, will management communicate with the Board?
- As above, but with the residents?
- How will management encourage and assist the Board in communicating with the residents?
Accountability:
- Who can the board contact for answers, if not reasonably available from the property manager?
- Will management support the Board? Will they understand, empathize, and act accordingly?
- Are there proper “internal controls” within management’s operating and accounting systems?
Again, I could dwell on all eight above-mentioned major topics for days (and I’ve done so, believe me), but this is just a sampling of what you should consider, when assessing your requirements.
Can your current management cut it?
A clinical, non-emotional assessment is required here, utilizing the above and other evaluative criteria. The Board may be undervaluing and under-appreciating the incumbent management, by any arm’s-length barometer. While it’s up to management to see that the Board gets the picture, it’s nevertheless up to the Board to render an honest appraisal of management’s performance and not hold grudges. Sometimes, the situation is salvageable: an attitude adjustment, a different property manager, whatever. It’s amazing what communication, willingness to understand, and mutuality of purpose can accomplish.
Conversely, there is sometimes no hope. The condominium President writes to the head of the management company, after all other entreaties have failed, and receives in return a six-page letter dripping with indignation, paranoia, and hostility. (It happens.) Grounds for divorce, my friends.
Assessing what’s out there
Site tours, brochures, interviewing, reference-checking, inspections of similar communities managed by the candidates. All of these procedures are necessary, whether performed by the Board, a management committee, or in conjunction with a professional advisor.
All candidates will want to tour your community, either before or after sending their brochure, but definitely before quoting a fee. On the tour, observe their thoroughness, or lack thereof, and their familiarity with the mechanical installations, the physical layout, the access control situation. Note their willingness to ask questions about the community and the people living there.
Condominium management company brochures have gotten glossier. Some of them even manage to look professional. There’ll be a lot of similarities between them content-wise, but it’s nevertheless necessary to analyze the material (a) as a partial basis for the subsequent interview process, and (b) as a measure against future performance. Make brief but effective notes comparing and contrasting the various candidates’ qualifications as represented in the written material.
The interview process should be just that, and not a sales pitch vehicle or a pep rally. The Board should control proceedings, with a pre-determined questionnaire. Again, there are advisors out there who design these things. Give each candidate a small opportunity to make a brief presentation, either before or after the question process. Believe me, if you think reading brochures is mind-numbing, wait till you sit through six sales pitches at an hour-and-a-half each.
For reference-checking, you’ll have been given the names of Presidents. See that you also talk to someone else on that Board, for reasons of balance, extra information, etc. Also consider “negative referencing,” that is, speaking to Board members whose condominium no longer deals with the candidate in question. Dirty pool? No. Sure, there may have been grudges, unreasonable expectations, and so on. But you’d be surprised at the patterns that emerge when you talk to three or four disgruntled Presidents. I can’t tell you the number of times I’ve heard the word “arrogant” come up — which is quite bizarre in what’s supposed to be an intensely service-oriented environment.
When you tour sites managed by the various candidates, see that you’re looking at a community similar to yours, (a) to ensure that such a thing exists; (b) to note how well it’s managed.
Making the decision
Taking the above into account, also consider:
- Is the management company too large (“will we get lost in the shuffle”)?
- Is the management company too small (“will they lack the resources and expertise we need”)?
- Fees: A “too-low” quotation means major trouble down the road. Be balanced in your thinking.
- Site staff: It’s often unfair to expect the site manager to be part of the presentation, but it’s not unfair to ask about him or her, in detail, during the interview and site-tour process.
Remember: you don’t always have to change management companies, but you always have to be assessing the performance of the one serving you. Good luck!