If you want to live in a condo or townhome, an association and usually a condo association property manager is a necessity. But it is adding another layer of control over your life and your home, so you need to be sure you have the best possible representation working in the best interest of all the condo residents.
Most people have little involvement in their condo association until something happens. It is often hard to get attendance of the residents and even harder to get people to participate in the condo board. What you want in an condo association property manager is someone who is going to help all the residents with building maintenance and repair planning, proper budgeting and general management. But often what you end up with is varying levels of bureaucracy with managers who are difficult to deal with and even harder to communicate with. Here are a questions to ask when you are considering management of your condo or townhome association property manager.
Do you have the property license, insurance? Make sure they have the proper credentials. In Illinois, people who manage properties must have a Community Association Manager license with the State of Illinois. Per Illinois regulation, the person who deals with the association’s money, contracting, etc. needs to have this license. So, if the person you deal with on a regular basis for everything does not have this license, this is illegal, sometiemes even if they are working for the person with the license. Administrative staff have specific tasks they can and can not do. Anyone can verify this license on the Illinois Department of Professional Regulation websitehttp://idfpr.com/licenselookup/ Also, make sure the company and/or the person has proper liability insurance, like general liability or errors or omissions insurance and some kind of bond if they hold your money. This protects the association and all the residents.
What is their experience/reputation? Even properly licensed individuals can vary in experience. Let’s face it, some people are good at their job and some are just not. Before you hire a condo association property manager, talk to people on their other associations. Yes, references are often like calling someone’s mother – you are not going to get a bad reference or they will not give the person to you. I recommend asking for the board member names and numbers of ALL the associations they represent and maybe even ask for a couple non-board resident names. Check them out.
What are ALL the fees they charge? Not only the fees they charge monthly, but what other fees are involved. Do they charge extra for accounting fees? If legal and accounting fees are outside, do they markup those professional fees? What fees do they charge for resident sale transactions? Managers often charge fees during sale transactions to cooperate. This is something no one usually knows or asks. They charge to give the buyer a copy of the bylaws, budget and/or declarations. This can be $100-200 charge to the seller. Sometimes they also charge the buyer and/or seller a fee to transfer their records from the seller to the buyer. I have seen anywhere from $250 to $350 for this charge. These fees are usually a surprise to the seller, but are not an option.
Any condo association property management agreement should disclose and negotiate ALL FEES they can ever charge to residents or potential buyers. Also, should have an agreed timetable for responding to inquiries from residents and requests for documents.
Realtors and residents often see the real truth of the deal with condo association property managers when selling their home. Property managers are an important component to ensure a smooth sale transaction. Contracts require buyers get a copy of the budget, bylaws, and declarations and require the association complete a form indicating the health of the association, if there are any pending assessments or law suits. The association and their cooperation or lack thereof can jeopardize your sale. This is about the time many residents find out just who their association property manager is working for…you or themselves. And if you have an uncooperative condo association property manager during the sale transaction, your buyer may decide that they don’t want to live in a condo or townhome that has this difficult a manager – too much hassle.
For example, it is often a problem to have condo association property managers take forever to get the documents to the buyer and lender and not respond to emails and calls from the buyer and seller’s agents and attorneys and lender.
In one case, I had a deal cancel because the condo association property manager did not disclose that there was a lawsuit against the association. Lenders will not lend money for that deal. So, the seller could only have a cash buyer, which is a very low percentage and will affect the amount of the sales price. In another situation, the association manager failed to advise that there was a special assessment pending until the last minute, forcing the seller to pay additional money they did not anticipate to finalize the deal.
Condo association property management is not an easy job. You have to answer to a lot of residents who all have differing opinions on everything, but I am often surprised when a seller says the condo association property manager is horrible and very difficult to deal with. Then why have them?