Written by Chris Majerle, PCAM on September 14, 2020
Community Management Edition
A wise man once told me, “Never trust a man who says, ‘Trust Me.’” So, I don’t ask you to trust me, but I do ask you to decide if you can trust me before you hire my firm for community management. Ronald Reagan said, “Trust, but verify.” We provide monthly financial and management reports to give you the tools to watch over us.
All too often, condominium & homeowner association boards tie the hands of their management firms, then blame them when things go wrong. When there is not enough money to fix the parking lot, the manager must not have collected enough of the assessments or did not spend according to the budget—it’s never that the board refused to accept a budget with higher assessments or that they refused to fund reserves. When the property looks bad with trash or graffiti, the manager should do something! With what, if the board would not accept a budget with funds to pay for the cleanup?
Management is a very different contract from all your other contracts because it is management to whom you turn when you need guidance or assistance. When you think your lawn maintenance is too expensive or unsatisfactory, management should fix it. When the lawyer is ineffective, management should find a new one. When homeowners don’t follow the rules, management should make them. If you do not trust your management firm to act in your best interests, either you have trust issues or you have the wrong management firm. Management, if acting competently and diligently, should relieve you of stress, anxiety, and labor. We should raise our hands when something needs to get done. We’re supposed to get to know you and act as we believe you would act.
Any business operator will tell you, there are two types of bosses—the type who micro-manages and drives people away or the type that trains and trusts people to do their jobs. The micro-management style says, “I don’t trust you or have confidence in you. ”Think about how you interact with your manager. Do you, at your board meetings, discuss action items, give your manager some tasks to help you accomplish, and leave him/her alone until the next meeting? Do you have clearly defined requirements of each of your vendors, of each homeowner? Do you have an expectation of how the property should be operated from the perspectives of administration, facilities, and finance? Then communicate those to the manager and hold him/her accountable, but do not intervene and tell the manager how to conduct a site visit. Let them do their job and report to you.
One final word about management: cost. When bidding for management services, boards often attempt to create an RFP that delineates specifically what will be expected. That’s good from the big-picture perspective. But management firms today have a wide array of electronic services, training and designations, skills, backgrounds, and experience. Shopping for management is not as easy as putting an item in your online shopping cart. You cannot necessarily quantify the value of a community website and the degree to which the manager will maintain the site. Services vary widely as does pricing. The old adage, “you get what you pay for” may apply most with management. A top-quality management firm owner once told me, “We don’t submit a bid if cost is in the board’s top five evaluation criteria.” The good ones are not the cheapest and the bad ones, while saving you money on management, could cost you dearly in every other aspect of your budget and operations. This is the ONE contract in which cost should take a back-seat to quality, reputation, service levels, training & designations, and recommendations. (And I mean recommendations, NOT reviews. On Google or Yelp, management gets blamed for everything from rising assessments to the neighbor’s dog pooping on the lawn.)