SO WHAT'S
WRONG WITH CONDOS? Now A Big One – The Property Manager
December 20, 2008
Charles HanesProperty Manager - The property
management company is initially hired by the developer to manage the building from
Occupancy through to registration and/or the Turn Over Meeting. A good property manager
makes for a good condo building and visa versa, a poor property management company will
take your condo community into the not-so-good category!
There are good property management companies in Toronto and there are bad property
management companies and believe me their effectiveness carries a direct impact onto your
life and the comfort that you ultimately enjoy from your condo investment. Unfortunately,
the majority out there are not impressive at all but there are a few really good ones.
You’ll usually find them at the better condos in town.
The property manager is the quarterback on the team! They’ve got to be experienced
and trustful. This sounds logical but let me tell you, we had one of the largest
(perceived) property management companies (“Brookfield”) in one of the condos I
owned and they were a night mare!
At the turn over meeting I attempted to introduce my perspective on this company (small 3
man outfit that licensed the name of Brookfield which is the biggest real estate company
in North America) only to have the vice president invite me outside for a fist fight! I
really didn’t think that men did this any more and was caught off guard but most of
the board members preferred to buy the story of the developer and it’s buddy property
management company.
A year later they all realized the error in judgement that they exercised at the turn over
meeting, terminating Brookfield after seeing the monthly maintenance fees double! When
informed of an audit, they mysteriously found twelve thousand dollars in our budget. My
apprehension of this company was simply reinforced. The condo corporation lost
significantly as the “Mechanical Audit” was undertaken too late to effectively
negotiate settlement of outstanding issues (as designed by the developer). |
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This is why I say
that regardless of who the property management company is that the developer of your condo
hires to manage the building during occupancy, their contract should be immediately
terminated following the turn over meeting with a new company with loyalties only to the
new board brought in to run things.
Let me restate my position here. Without exception, the first thing that a Condo Board
should do following the turn over meeting is replace the property management company. The
reason for this is that the property manager got the initial contract from the developer
and wants any/all future such contracts with that developer.
There are significant issues to be addressed following the turn over meeting such as the
Engineering Audit. If your property manager is loyal to the developer this critical
inspection is usually deferred (must be done in 1 year) to enable the time to run out to
the developer’s advantage (allowing them to get away without adequately fixing or
compensating the newly formed condo corporation).
It is absolutely critical that the newly formed board’s first move is to terminate
the developer’s property management company and bring in one that is loyal to only
the new condo board/shareholdersBe sure to tune in
each week to read this Series:
1.
“What’s Wrong With Condos . . . . It all starts with the developer”.
2. “What’s Wrong
With Condos . . . . Board of Directors”.
3. “What’s Wrong
With Condos . . . . Property Manager”.
4. “What’s Wrong
With Condos . . . . Tenants”.
5. “What’s Wrong
With Condos . . . . Speculator/Investors”.
6. “What’s Wrong With Condos . . . . End User Owners”.
That’s it for now. I’m Charles Hanes |
