Is it simply about the money? Condo associations that forgo the services of professional management are cutting what may seem like a major expense. But the belief that “we can do it ourselves” may work great for some time and for some properties but may not ultimately be a good value or work in all properties.
Attorney Patrick Brady, a partner at the law firm of Marcus, Errico, Emmer & Brooks, P.C., in Braintree, Massachusetts, relates, “Just the other day, I got a call from an association in a Boston suburb... This property has about 55 units and has been self-managed. Well, one of the trustees who was serving as manager had stepped down, and for about a year another trustee had been managing the property, but apparently, he got sick some months ago, and the original trustee/manager just recently returned to the position but he couldn’t find the financial records and he called our office, all in a panic. Now… they will need to seek the services of an accountant. We told him to hire a professional and get the (association) on the straight and narrow.”
In a situation like this, he adds, “The computer is in one guy’s unit and how can anyone get at the records if he gets sick? All trustees have to be involved so someone else can easily step in and take over.”
This is just one example, Brady points out, of how “you have to operate like a professional manager would, if you’re trying to be self-managed. You have to keep accurate ledgers because you have a fiduciary duty…” He notes that in small-size properties, a trustee might be paid to be the property manager, but “I’m not a proponent of a trustee being (an employee) because he’s his own boss. I’d rather see the trustee get off the condo board if he’s managing the property in a paid position… but it does depend on the size of the association.”
While trustees in small associations typically believe self-management is a way to cut costs, Brady explains that there’s more to it than money. “You’ve heard it before, someone looks at a task, it could be something like writing a magazine article… and they say things like, ‘I could do that.’ Well, we see board members looking at managing their condo community, and the tasks involved such as researching vendors, balancing books… and it becomes an ego thing where they think, ‘We can do this ourselves!’—but are trustees really qualified and do they have the time?