How are most condominium corporations managed? First, it is important to understand that a condominium corporation’s Board of Directors has a dual responsibility which is part policy and part management.
– The board of Directors is responsible to make decisions and enforce the governing documents (the Act, Declaration, By-laws, and Common Element Rules). This decision-making role cannot be delegated, however, the Board may delegate certain activities. For example, the Board may make a decision to charge a fee for extra common element parking spaces on the property. This is the policy role. However, the monitoring of these spaces and the collection of the fees could be delegated to a building superintendent, staff member, an individual director, committee member, or professional management company. This is the management role.
The Board of Directors is also responsible for selecting an appropriate style of management. This management role is to ensure that policy decisions made by the Board of Directors are carried out. No two condos will be managed exactly the same way.
There is a whole continuum of styles available for managing condominium corporations.
- Full-serve professional management companies provide comprehensive management services, including maintenance, repairs, financial, administrative, enforcement of common element rules, and supervision of staff.
- Self-managed condos rely on the Board of Directors and volunteers to take care of all of these duties. And some condos do have capable, interested condo owners who are willing to do the work.
- And in between these 2 ends of the spectrum are a wide range of options. For example, the Board of Directors may supervise a live-in building superintendent, and/or hire an independent bookkeeper. Or the Secretary/Treasurer of the Board could handle all of the administrative and financial tasks and a property management company could be hired to manage the operations of the condo. However, there are many options to consider, depending of the interest and depth of skill within the condominium Board of Directors and other owners willing to volunteer.
What are the pros and cons to consider?
- Typically a full-serve management company charges a per door monthly fee for its host of services. If your condo has 120 units and the per door fee is $45 per month, this amounts to $5,400 monthly or $64,800 annually. Full serve management companies deal with all of the day-to-day tasks, including administration (bookkeeping, collection of condo fees, correspondence, minutes), maintenance, and enforcement of the condominium’s policies.
- Self-managed condominiums rely on the efforts of the elected Board of Directors and owners to ensure the day-to-day tasks are taken care of. For a condominium to be successful with this style of management, capable and willing people are needed. The Board of Directors can look to professionals for advice to assist them, as needed. But completion of the work is done by owners who volunteer their time. This is a lower cost option, as expenses include only the cost of supplies (postage, paper, copying, fax, telephone, etc.) and possibly honorariums (if permitted in the condo’s By-laws or approved by the owners).
- Alternative management styles often involve hiring out for specific tasks with the Board of Directors maintaining responsibility for everything else. For example; hiring a bookkeeper, or hiring a maintenance person to shovel snow, mow the lawn, and complete small repair work. Some property management companies offer a-la-carte services, such as bookkeeping or maintenance & repairs. The condo corporation retains responsibility for all other management duties. The costs vary depending on how much of the work is hired out. This is generally the mid-price option.
So, the question is, what is the best way to manage a condo?
In most cases, it’s a matter of weighing the costs against benefits of the various styles of management.
- Professional full-serve management is the most costly, yet it also relieves the owners of the responsibility of the day-to-day tasks required to effectively manage the condo corporation. Management companies may have better expertise to efficiently manage your condo. A caution, not all management companies have the same level of expertise. So do a proper review and get recommendations, before you sign a contract.
- Self-Management requires a certain level of expertise and skills to ensure the property is managed well. It is the least costly, yet it does require a good deal of commitment on behalf of the owners and particularly the Board of Directors. A caution, effective management in a self-managed condo, requires a commitment to fairness in determining what is best for the condo corporation as a whole. Too often we hear reports of Boards that operate to suit their own preferences.
- Hybrid management styles can provide a good balance of costs and also fill the gap of skills that are not available among the condos owners. It is more expensive than self-management, but less expensive than employing a full-serve management company.
And it is also possible to change management styles to best fit the needs of the condo corporation. Over time your management needs may vary and updating your management style could be beneficial.
Need more information?
Does your condo need help in assessing what the best management style for your condo corporation is? Are you questioning if your current management style is the best fit? Contact Condo-Link Services for a review of your condo’s needs. We provide assistance in choosing an appropriate style for your property and we offer training for owners who are interested in volunteering their time to manage the condo.
Contact us at email@example.com or 506-206-2080.