Condominium Property Management: Self-Manage or Hire a Professional?
Your Community Expects that the Affairs of the Corporation will be Looked After Whether it is Self-Managed or Not.
Effective property management is more complex than it may appear from an outside perspective. It involves hiring and managing contractors and trades to maintain and repair the common property; fulfilling administrative duties such as maintaining a register of all owners, corresponding with owners, issuing legal documents and maintaining and providing the documents of the corporation to owners, realtors and lawyers upon request and within legislated timelines; financial management and reporting, including collections and preparing an annual budget; placing insurance and handling insurance claims; and 24-hour emergency response.
In a self-managed community all these important functions are fulfilled by the volunteer Board of Directors who may or may not have the right skills. They often have full-time jobs and other commitments as well.
A professional management company has experienced staff that has the benefit of property management technology and condominium knowledge to efficiently and effectively handle the multitude of tasks that a corporation faces on a daily basis. This allows the Board to focus on the decision-making and frees them from the minutia. A management company also acts as a buffer between the Board and owners when unpleasant directives need to be delivered; this helps preserve neighbor relations.
Effective Property Management Helps to Maintain, or even Increase, Property Values.
A professional management company helps maintain property value by guiding the Board as they make decisions about property maintenance, the reserve fund study, investments, insurance considerations, arrears, condominium legislation, bylaw enforcement and more.
A management company that has longevity has managed thousands of condominium units of all types. They are experts in the industry and have built relationships with trusted vendors, service providers and professionals such as lawyers and engineers. They have faced every situation and resolved it. The depth of support within a full-service management company means that every associate has an experienced team to turn to in difficult times.
The best management companies, because of their clout in the industry, are able to negotiate savings or preferred rates that they pass on to their clients. This creates value for the condominium corporation on a scale that self-managed properties simply cannot achieve.
Finally, when it comes time to sell a condo, knowledgeable buyers review the condominium documents thoroughly. They want to see that the reserve fund is healthy, invested properly and that the plan has been followed as directed by the reserve fund planner. Buyers also want to see accurate financial reporting that gives them a good picture of the corporation’s financial health. Some are reluctant to purchase in self-managed condominium corporations because they know they are often less-than-expertly managed.
Accomplish More in Less Time Without Burning-Out the Board
People have busy lifestyles. They work, travel, have family commitments or may be active in their community or other organizations. They may have moved into a multi-family community to decrease their commitment to their home and have more freedom.
It can be difficult at the best of times to find to find those that are willing to serve on the Board of their condominium community. Often it is the same few people that volunteer year after year.
A community may decide to self-manage because they have a strong Board that is willing to put in the extra work. However, in a self-managed community, the Board has a much larger time commitment than when a professional management company is involved. All the work that the management company does on behalf of the corporation is now the responsibility of the Board. Depending upon the property, this can have a significant impact on the people who are giving up their free time.
Additionally, it may be even more difficult to get new Board members when they know they must make a substantial time commitment. They may also have to stand up to criticism from their fellow owners without the condominium manager as a buffer.
An experienced property management company is the office of the corporation. Its experienced associates look after the paperwork and communicate with the Board, the owners, realtors, lawyers, financial institutions, suppliers and each other to ensure the corporation runs efficiently. This means more gets done in less time and with less stress for the volunteer Board members.
What if There is an Emergency or a Natural Disaster?
Professional property management companies have emergency plans in place to handle unexpected, disastrous events whenever they happen. Those who have been in the business a long time have experienced most of them, from catastrophic fire and flood, to burst pipes that significantly damage many units in a building and vehicle impacts with property, to name a few.
A disaster in a self-managed building may be difficult for the Board to handle. If they have not been through such an event, they may not know exactly what to do. It will require more of their time to organize the parties that need to be involved, such as restoration crews, insurance adjustors, re-construction companies and engineers. Who do you call for help in the middle of the night when there is water gushing through your ceiling and down your hallways?
The best management companies have managers, supported by a 24-hour emergency service team. They have direct access to contractors and crews that are experienced in the job at hand. They know who to call, have a plan in place and they execute it immediately.
It can be a very emotional experience for the people involved when something terrible happens. Having a trusted partner to help you through an emergency can make a big difference to the Board and the residents they represent.
In Alberta, Condominium Corporations Must Operate in Accordance With the Bylaws of Their Corporation and the Condominium Property Act of Alberta
Board members in a self-managed condominium must understand their bylaws and any applicable legislation that governs in their local area. In Alberta, it is the Condominium Property Act of Alberta. If they do not clearly understand the responsibilities of all parties involved, they open themselves up to all kinds of problems and even legal disputes.
The role of a professional property manager is to advise the Board about the many situations that will arise. In a good company, the manager has been well-trained and has experience dealing with a myriad of circumstances where the bylaws and the Act need to be consulted and interpreted.
It is important that the Board, as directors of a legal corporation, ensure that all risk and liability to the corporation is minimized. A management company with decades of experience will guide the Board to make the appropriate decisions.
The expertise of a good property manager is invaluable.
The Condominium Corporation is Still in Control When they Hire a Professional Property Manager
If you hire a property manager, the manager works for the corporation. The elected Board of directors is responsible for running the affairs of the corporation in accordance with the bylaws. This includes the establishment of overall corporation policies. As the corporation’s managing agent, the management company has a responsibility to advise and help the Board make policy decisions. It is then the manager’s job to carry out those policies.
The best property managers will have dedicated associates that will fulfill accounting, administrative and communication functions. They will have well-trained, experienced and effective managers that form a relationship with the Board and help them achieve their goals and carry out their responsibilities.
The property manager’s role is to support the Board as they work with the best interest of the entire community in mind.
Should Your Condominium Corporation Self-Manage or Hire a Professional Management Company?
Managing a legal entity on behalf of others can be a big job. The Board of Directors is accountable to all the other owners and need to understand the complexities of the job. If your corporation could use the support of a professional manager, it may be the best decision you make for your community and the value it will add to the Board will likely more than pay for itself in the end.
To connect with the best property management service for your community, fill out this form and contact FirstService Residential today.