Self-Management Is It Right For Your Association?

It's not uncommon for condo associations in the New England area to have outside management companies handling the day-to-day business of running their buildings. Managers do everything from collecting maintenance checks to responding to homeowner issues to hiring maintenance contractors—and all manner of tasks in between.

Some buildings, however, opt to go it alone and manage their own communities. Their reasons are as varied as the communities themselves. This article will discuss why some associations choose to self-manage and to illustrate the pros and cons—as well as the actual methods—of their decision.

Reasons To Go It Alone

Picture this: a board of directors and several disgruntled shareholders convene to discuss the poor service they feel they're receiving from their management company. Someone angrily brings up the fact that maintenance expenses have gone up, though no actual maintenance seems to be getting done. The steps in front of one building are constantly icy throughout the winter months, while someone else points out that his building's landscaping looks sickly and ill-tended throughout the spring and summer.

In this case, residents and board members feel their community is not being well managed. They feel they could do a better job on their own. And, in doing so, they'd save the moneythey pay for their management—or lack thereof.

So they decide to fire the property manager, and henceforth manage their own affairs.

Read More...

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14 Comments

  • thank you for clarifying my self management thought process.
  • Can you provide any contacts from self-managed condo communities in New England that we might be able to communicate with?
  • I live in a small complex in Connecticut. It is a self managed property. However, the bad thing is that I and two other no-board members have asked to see our finanical reports, records, bankstatement, etc..OUR book. We were told no. We were told that we can request copies, at our expense. The CT state law does not protect homeowners in this situation. It is very fustrating. We had a special assessment done 2 years ago at 4,000 each unit. The work that was done, was done, some good some not, but the thing is we should of got a refund IF all the money collected was not spent for the roof and paint job. I dont know where all the money goes, you get some budget with some numbers thrown together that dont even add up right. Who can help? Perhaps the new Raised Bil No 1006? Something needs to be done.
  • I am on the board of a condominium that has been self managed for 3 yrs and yes it is a real pain and there is nothing I would like better than to find some additional help in the form of a property manager at a reasonable cost, but seem unable to do so. The reason we are self managed in the first place is because of the former property managers that we have had and no they did not find the best quality repairmen at the best price quite the opposite is true. And no they did not inspect the property and promote needed maintenance, instead we were left almost bankrupt with our whole complex in a state of disrepair, roofs, decks, siding, parking lot, carports. We are a 34 unit complex. We have a bookeeper that charges $200 per month I have contacted property managers that charge an additional $600 to $800 per month and I somehow can't see how the service they provide is worth spending the additional $9,000 per year that we could use on some of our much need repairs, that have only been getting done since we started self managing
  • Stephen Sulkey, CMCA, AMS, PCAM on Thursday, February 11, 2010 8:26 PM
    I read the comments above, especially the last one. Something you must keep in mind that like any other profession there are management companies and then again there are good management companies. I've been told by more than one association that I've aquired that the former company did nothing for them in comparison, etc. You need a company and manager that 1) is qualified, 2) is assertive to maintain and improve if possible the community, even if that means pushing the Board to action in some cases, and 3) is honest with the Board, with the members and most of all with the funds! Those are the things that make a management company worth that $9,000 or whatever.
  • After 16 years in the business, I found that running a small property management firm was difficult with a lot of small clients. Small associations felt they were paying too much (percentage wise, they were right) and the staff was spread pretty thin. No one was completely happy. There are some REALLY smart software solutions out there for Self-Managed Associations to bridge the gap. Take a look!
  • We have been self managed for 20 years. Our PM has his own insurance to work on the property, painting. He has been painting over rot and now we have huge problems. I do not think the condo association should be responsible for this. Can we go after his insurance to fix this?
  • hybrid self manager on Friday, October 12, 2012 1:52 PM
    How about a model like this? The board holds the reins on major items and the property manager manages the property. For instance, 1) the mail comes directly to the condominium PO Box. The intitial handler should be a knowledgeable board person, or a paid staff person. You will be surprised what you will find, and learn, when you see the mail. The mail is then forwarded to the appropriate party - in many cases this is the property management company. It should not go directly to the property management company. When we had property management companies, things got "lost" like our pool license, our notification regarding our FHA approval, even important tax information. Even worse, when you change property managers, much of the mail still goes to the former one(s) and it causes delays and many special problems. Keep control by having one address for the condominium mail from year to year - at the condominium - period. 2) Do not hand over the purse strings to the property management company. Board should hire an independent outside accountant / bookkeeper to process the receiveables / payables. The outside accounting firm will work closely with the Property Management committee but will primarily be responsible to the board. One of the most important monthly payables is to the Property Management company of course, but they do not have to have control of your bank accounts to do their job or get paid. All banking relationships should be maintained by the board and all bank statements come to the condo address. Since we have had an outside bookkeeping firm, monthly financials are on time, we receive a portable Quicbooks file after new transactions are entered and we can go into our financial files to see the status any day of the week, any time of the day or night. Even print reports. It is very different from the days of only knowing once a monthwere we stand financially. So what does the property management company do? They deal with all vendors from A to Z and provide estimates to present to the board for all contracts and project. They deal with all owners, maintaining excellent communications and customer service to deal with owner issues and keep them well informed. They are responsible to oversee the property, to inspect it as needed, to make sure that everthing is up to proper and up to speed. They report problems and make recommendations to the board on any and all property matters that the board needs to know about and/or make decisions on. They enforce and reinforce the rules and bylaws, along with the board. To me, this is the property managment job - not controlling all correspondence and not controlling the money. The board needs to hang on to reviewing all the mail, and the control of the money.
  • How do you handle a self managed condominium issue such as we have: one owner (not the HOA Board) takes over all responsibility, makes decisions without board approval, etc.? He does most of the HOA management, so most are hesitant to rein in his duties, yet she is overstepping boundries. He is on all committees, inserts himself into all vendor activity: landscaping, pool management, etc. It is becoming an issue.
  • Very helpful but I have a question u say volunteer.Can president, treasurer, secretary and board members get paid by condo?
  • We have a total of 4 condo's in our building in which two of the unit owners are the two trustees. They no absolutely nothing about property and maintenance. One of the trustees says they will never be voted out and she has the overall power to do what she wants. This trustee will tell you, she has the power and the check book isn't going anywhere. We will never be able to vote them out being only 4 unit owners and these two owners are trustees. There will always be the two trustees against us other two unit owners. These trustees hire friends and relatives to do the work and the work is shoddy. One friend of theirs cemented spots of the foundation to stop water leaks, well that didn't work. The trustee's hired a power wash company last year, that we voted no on, but hired this company anyway. Damage was caused to inside units, and the trustee that has all the power, signed a waiver for this power wash company because he is a friend of hers, stating if he caused any damage to any of the insides of the condo's, that us unit owners would not hold him responsible. Well of course there was flooding in units and damage, still to this day, a year later the issues and maintenance is not completed. What recourse do us other two unit owners have about getting these two trustees out, appointing new ones when it will always be two against two, and see to it that the now leaks in units get fixed from the damage of the power wash company. We also need our chimneys fixed, etc and this trustee that has all the power, always tells us there is not enough money, that there is only $3000.00 in the trust. Well, where did all the money go from the total of almost 6 to 7 years these two have been taking monthly condo fee money and not doing anything with the money to correct major issues because it is all her family that does the plowing/shoveling, her boyfriend does the lawn care free of charge. Why do we not have the money to get these issues fixed. How can we legally get these two trustees off and appoint two more when it is always two against two. Us other two unit owners do not ever have a say in anything, we always get overridden by these two trustees.
  • We are a condominium complex of 12 Building 96 units, 25 years old, sitting on 28 acres of land, of which 19 acres are developed. The complex was managed by “Professional Property Management Companies for the first 12 years and nothing was accomplished. Poor maintenance Contractors serviced the building, Landscaping was horrible, and of the Three Property Manger Companies, one gave a considerable amount of collect door fees back to the Association. One other property manager could not calculate the correct increase based upon percentage of owner ship. Having gone self-manage was the best thing that our Association could have done. It was not easy at first but as we worked together things stated to fall in place. In the last 13 years we have managed to roof all 12 buildings, strip old siding and replace with insulation, vinyl siding and plastic wood trim. We have built up reserves and keep a very good balance. Landscaping and snow plowing could not be better. At times there are issue with unit owners but taking the approach of, treat them as you would like to be treat philosophy , seems to work well for our Association. Our five members Board of Trustees serve for the benefit of all unit owners without, self-interest, self- gain and without compensation. I whole heartedly suggest that if you’re not happy with you Property Management Firm, don’t like the fee, go self-manage. New England Codo mag. Is a good resource, and there other publication you can find.as well on the internet to help you.
  • awI recommend having the management company for couple of years just to learn what is involved. During that time board members should create a manual on how to deal with issues such as budget, insurance, projects, etc. Couple of myths about the benefits of having a management company (MC): 1) Management company collects monthly fees. Who and how will it be done without it? First of all, the management company in most of the cases does not collect the fees, but hires a third party to do this. The most common way is via a lockbox service from your local bank. Thanks to the lockbox the management is only getting a report about who paid and who did not and acts accordingly. Actually, the legal council does and not so much the management. Communities can set up a lockbox account with almost any bank where residents will pay in person or send their checks by mail. But believe me, it will be much more efficient, way less expensive, and the board will have much better control and knowledge of who paid and who did not 24/7 2) The management company has expertise in maintenance. Who has that kind of expertise? I must disappoint you to tell you that the management company's experience might not be any better than yours. If they need to find out something they will get an engineering report and bill you for it. The management does not necessarily monitors projects either. But most importantly, they do not care about your property no matter how they make it look like they do. Therefore, do your own research. 3) The management company uses best contractors. This is not true. In almost every case the management company uses their own workers. In some other cases it uses companies that are owned by them without telling you this and this is their major way of generating their income. Had they not acted that way they would surely allow you to use contractors of your own choice, but they don't. 4) Should I mention how much money you will save by self managing? These may come down to hundreds of thousands of dollars. Why? Because the management uses the most expensive and sometimes totally unnecessary services. For instance, at our community we requested to get rid of the lawns so that there is no grass to maintain and to replace all seasonal flowers with permanent rose bushes and other flowers that grow every year to eliminate the landscaping contract. The management refused to do so. We insisted to cut the contract with the manned gatehouse to substitute it with automatic gates. This also never happened, since the company providing security is in good relationship with the management. This costs alone 75k per year. We requested the bids ourselves for automatic gates, but, unfortunately, the companies understand well that the board does not hold the checkbook, so they only want to speak to the property manager. There are countless examples of abuse like that. The management never gets 3 competitive bids. Instead they contact two most expensive companies and then offer a bid of their own company, which is a little bit lower...you know what happens next.
  • We have been a self managed condo community for the last 15 years, which I helped throw out the property management co. We are an over 55 condo community in Uxbridge MA. Our 5 Trustees, are also the property mangers and have various responsibilities i.e snow and landscaping contractors, irrigation repairs and contractors, ,managing the irrigation clocks(timers) We have our own maintenance man (part time) who stains decks, repairs any building issues, the Trust is responsible . for the outside of the units except windows and doors which the owners own. Street sealing. We pay them for the being the property mangers $216.00 a month that equates too $12,960 a year. Property Management companies charge more then double this price, and never mind the cost of contractors they hire i.e. staining of decks @ $300.00 a deck. It cost us around $70.00 a deck. We pay our maintenance man $15.00 an hour. His yearly salary runs us about $6,000. We pay one resident $2,500 to trim all the shrubs and trees, 1/2 the price of a contractor. Our annual savings has been running $20/$25k