Negotiating the Contract Good Relations Develop When Terms are Clear

The management contract defines the relationship between the condominium and management company, but the document's provisions frequently receive only cursory review or discussion by the condominium board.

If troubles crop up down the road, they often can be traced to a failure to include expectations, rates of compensation, and specific legal duties and roles when the contract was written.

To avoid conflict cropping up between associations and their management teams, and to promote harmonious relations between a manager and his or her board, more time should be invested in reviewing the contract while it is being drawn up, rather than after a dispute arises.

Money: Base Rate v. Non-routine Services

One of the persistent hot spots in contract negotiations is how much compensation will be paid to the management company for its services. Because of the nature of condominium management, the rate of compensation generally falls into two categories: a base rate and a rate for non-routine services, also known as special projects.

David J. Levy, PCAM, of Sterling Services in Holliston, Massachusetts, compares the base rate to a "fixed price buffet" and non-routine services—which include management services relating to emergencies, administering insurance losses, or tending to planned construction projects—are like the "drinks."


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