The Fluid Fees for Oversight on Capital Projects
Whether it’s installing a green roof or restoring the facade, big capital projects must be properly coordinated and supervised. Most boards turn to their managing agent for help, and many are surprised to learn that there is an extra charge for the extra help.
“Anytime people get involved overseeing a project,” says Ellen Kornfeld, vice president and partner at the Lovett Group of Companies, “depending on the size of a project or how much time you spend at the building having to coordinate and interface with various professionals, you have to make a determination. If the time exceeds what is realistic, then you may have to charge.”
The size of that charge depends on numerous factors, and it differs from one management company to another. But the first place to look is the board’s contract with its management company.
“You disclose in your schedule of additional fees what your criteria are with regard to capital projects,” says Kornfeld. “[It] might say, ‘Any project over X number of dollars, there will be a percentage put toward the managing agent.’”
Some companies prefer to charge a flat fee rather than a percentage, because this is New York City and every capital project comes with unpleasant surprises.
“Anytime people get involved overseeing a project,” says Ellen Kornfeld, vice president and partner at the Lovett Group of Companies, “depending on the size of a project or how much time you spend at the building having to coordinate and interface with various professionals, you have to make a determination. If the time exceeds what is realistic, then you may have to charge.”
The size of that charge depends on numerous factors, and it differs from one management company to another. But the first place to look is the board’s contract with its management company.
“You disclose in your schedule of additional fees what your criteria are with regard to capital projects,” says Kornfeld. “[It] might say, ‘Any project over X number of dollars, there will be a percentage put toward the managing agent.’”
Some companies prefer to charge a flat fee rather than a percentage, because this is New York City and every capital project comes with unpleasant surprises.
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