There certainly is no shortage of co-op and condo management companies in New Jersey. And since there are hundreds of management companies vying for your attention and your business regardless of the size of your condo or HOA, it can be tough for them to set themselves apart from their competitors. Modern management companies come in a variety of shapes and sizes, and offer everything from the basics of accounting and project management to more specialized services. There are plenty of differences from one management to the next, so before randomly choosing one, it helps to do some homework beforehand so that you can find the perfect fit for your community.
Hiring a Manager or Self-Managed?
According to the Community Associations Institute (CAI), a nationwide organization providing information, education and resources to community associations, there are about 60,000 community association managers nationwide, and there are 10,000 community association management companies. Only 15 or 25 percent of common interest communities—co-ops and condos—are self-managed and don’t employ an on-site manager or management company.
Therefore, it takes a lot for a management company to stand out in the crowd. Some attempt to do so by marketing themselves as 'boutique' firms specializing in a certain type of building or level of service; others go broad, offering everything from day-to-day administration to capital project management. Still others focus on bigger building complexes, which inevitably need more services than smaller communities.
Beyond renting services, every management company is expected to provide basic services. While what 'basic' is, is different for every particular company, most will offer financial management, administration, insurance administration, board guidance, support and board meetings logistics, site management and vendor monitoring and communications such as social media, says Scott Dalley, senior vice president at Access Property Management in Flemington.
And while the basics typically remain the same throughout the years—collect the income, pay the bills, watch the staff and keep excellent records, new technology has made these transactions much faster than in previous years.
Instead of collecting maintenance and common charges via check and the postal service, most management companies pay and get paid electronically by transferring the money through PayPal or a credit card. Even the application and transfer process for sales and leases is increasingly being handled electronically. This means that every large management company should have someone who is up-to-date with computer technology so they are able to do everything electronically, which saves on postage stamps and time.
Additionally, property managers agree that clients’ expectations and the level of their sophistication have changed and increased over the years. “The management companies that are successful and stayed in business have had to change and improve their services. Working with social media is just one example of how technology has changed and we've had to grow and become comfortable with it,” says Dalley.
Staying In Touch
For some management companies, technology has transformed the way they handle their responsibilities to condos. Donna Vitiello, CEO of Dovan Management Group in Bloomfield, says email makes communication with board members and residents much more direct and efficient. While walking around the property and conducting inspections may make your presence known, it's no longer the most efficient way to stay on top things. “I personally feel you get more done if you spend more time in the office addressing the problems than you do walking a property. I think the board feels that you're giving them attention if you're walking the properties, when in fact I think it's completely the opposite,” says Vitiello.
The ability to address maintenance issues quickly comes at a time when such issues are more prevalent than ever. And some of the biggest maintenance issues are coming from New Jersey's newest buildings, not the oldest. With an enormous demand for condo housing in New Jersey, developers try to finish projects as quickly as possible through cheaper construction methods and materials.
Management companies have had to adapt by devoting much more of their time to maintenance issues than before, says Vitiello. “It's a lot more work for the boards and the management companies, dealing with the repercussions of the cutting of the corners [during construction]. It winds up in the laps of the board and the management companies, making more work, which in turn causes the management companies to charge more money for the managing fee,” says Vitiello.
Leaks and other disrepair tend be very urgent issues for residents. Management companies can now get contractors and maintenance crews on-site to fix the problems much faster than before. “With email today, it's much more simple to get things done because someone calls in from the property, you email it out to the person that's got to take care of it. And it gets done so much faster, rather than having to run out to the property and look at the problem. You can just email the contractor, hook up with them, run out there if you have to get them started, and run out when the job is completed,” says Vitiello.
A Changing Management Landscape
Property managers also need to have expertise in areas such as websites, email blasts, smart phones, and iPads. “It's all communication driven,” says Thomas Chilenski, president of Cedarcrest Property Management in Fairfield.” Any way to improve communication with the residents, to provide them better ways to get in contact with us or provide them information on a timely basis we try to do.”
With changes happening at an exponential rate, property management companies have to ensure that they are up to speed with any changes to laws, regulations, buildings, etc. “We are always having to have professional development on an ongoing basis and updating our education and knowledge continually. If you don't do that, then you are just behind and the clients expect you to do that, to hold professional designations and update your skills and experience,” Dalley says.
Dalley's company, for example, is an AMO [Accredited Management Organization] and an AAMC [Accredited Association Management Company], which are company designations which come from IREM and CAI, respectively. “In order to maintain those company designations, we have to demonstrate to them that our staff is continually being trained formally and in addition, provide in-house training where we bring in attorneys, engineers, accountants and other industry professionals, to continually keep us abreast of any new laws or changes in the industry,” he says.
Managers need to have the unique ability to deal with board members, who, in New Jersey, may be some of the most successful people in the world. They also have to work with unionized staff, lawyers, accountants, engineers, tradespeople and contractors. And of course, they are managing your home and possibly your largest single investment.
The Best Fit Management Company
While it’s essential that management companies “do it all” so there is nothing left for the board members to juggle, this could result in an inherent conflict of interest in a building. The managing agent may be creating an energy division and a tax certiorari department—and it’s also collecting its fee from the client’s savings.
Do you want a management company that only does management—or would you prefer to have a larger company that manages buildings but also does real estate development and other real estate transactions? Some boards decide to have the larger company so that they have more people to help for every situation. Or, they may want the real estate brokers so they can possibly cut a deal whenever a new unit is for sale. But others prefer to just have a management company solely focus on management so they know there will be limited conflicts of interest and more focus on simply running the building. Regardless of your choice of comprehensive or combined management companies, you’ll still need to do more research before your make your final decision.
First, it is important to make sure that the property management company you are considering has experience in managing your type of community, whether it be co-op, condo or HOA. “You might have a great property management company who does an excellent job managing high-rise condos but they do not have experience managing single-family homes in an HOA, and there are nuances and differences between the two. If you are on the board, you not only want to make sure that they have professional designations and have been able to stay in business, but that they actually have experience in managing the kind of community that you are,” explains Dalley.
“The board should select a management company the way they do any contractor, they should have a minimum of three bids, they should interview the company, receive and check references, see if they have any professional affiliations, see if there are any negative reviews. It really comes down to researching and comparing everyone apples to apples,” says Chilenski.
Something else to pay attention to is the longevity of the company. How long has it been in business? “It is not a terribly difficult thing to start a company but it's a terribly difficult thing to stay in business a long time because you are only as good as your last day out there. If you have been around for 25 years, you have been able to show clients and the community that you have been able to sustain yourself for a long time,” says Dalley.
Chilenski adds that it is important to find out how many properties the company manages and the proximity of the manager or office to your property. “The farther away you are, the less likely they will be to visit you every week and make sure that everything is good on site.”
Make sure to interview the board members in the management agency’s current buildings to see if they’ve had any issues. Sometimes, the management firm may appear qualified, but if they rack up late fees or are slow to move if there are vacancies or any broken equipment, then you’ll know that it probably won’t work out.
Finally, ask for the management company to give you a detailed breakdown of their cost and fee analysis. If there is an energy saving incentive available that the management company arranges for the building, for example, are they going to take a cut of the savings? Will you have to pay extra any time they fill a vacancy or is it a set fee annually?
As management companies have adapted the way they communicate with residents and boards, board members should do the same in order to receive the best service. “Boards have to understand that they have to have eyes also. There are certain things a management company can't see. For example, lighting at night. It's the communication from boards [to management] that works. I answered an email last night at 11:30, because I could. I could have answered it the next morning, but it came in, and I was able to get it out of the way, “ says Vitiello.
Vitiello also says some condo owners don't fully understand the roles of boards and management companies. Management companies try hard to make clear what they're responsible for, and how to get in touch with them, but boards can help reinforce the message. Some don't realize that management companies are usually just responsible for maintenance in common areas. Others simply don't t know that they can contact management companies directly. “We have an emergency line they can call. That's what it's there for,” says Vitiello.
Professional residential management is a service industry, and it’s no secret that some service providers perform better than others. To evaluate how your property's management measures up, it's necessary to assess both how the company functions as a whole and also how your individual manager is performing. It is the responsibility of the board to make sure that the company they choose will be a good fit for that community.
Danielle Braff is a freelance writer and a frequent contributor to The New Jersey Cooperator.