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First Step - Fire your property manager?

avatarreb

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#1
An interesting read by Charles Hanes about the role of the service companies in new condos (i.e. the property manager, "concierge", etc...). What are people's opinions on this; Fear mongering or does he have a point?

http://www.simplycondos.com/market_today/2008/fire_property_manager.htm

An excert:
I’ve got tons of documented proof to support the following statement: “No matter what the price point, developers are absolutely committed to meeting ONLY the MINIMAL STANDARD of construction qualityâ€. We’ve got settled disputes where the developer’s litigator insists on “minimal standard†even when it comes to settling legal deficiency disputes. The best that you can expect is “MINIMUM STANDARD†unless the documents specifically say otherwise.

You will not find this in any of the glitzy sales and marketing materials that they spend tons of money on to get you to buy the condo from them. Now, all these “minimum standards†come in two forms, visible sub-standard workmanship and mechanical substandard workmanship.

Now remember, the property management company has been brought in by the developer thus the property manager’s loyalty will rest with the developer who gives them the contract (and who want to job on their future buildings as well) thus their loyalty is undivided.

This works the same with the security guard company. Oh, you don’t realize this term? Well, when you were buying it was called the “Executive Concierge Service†(that would stand the building apart) but the developer never had any intention of fulfilling that representation (promise). During the construction period they need security guard companies to watch the site and try to minimize theft of construction materials. When the building occupies the developers never hire a concierge company (most are going broke because they can’t find work in this town) but simply leaves the security guard company in place.

It is said that many developers receive kick backs from property management companies for these contracts but that’s fodder for another article. The point is that you never get your concierge and you get to live with a security guard in your lobby (no training as a concierge or people skills or subtle understanding of the expectations of a concierge job). Oh well, condos are the science of compromise all right!

The same applies with the superintendent usually as well. Now, I don’t have anything against any of these supposed roll fillers but my 30 years of experience has shown me the best first step for a newly formed condo board is to replace all three roll fillers immediately at the turn over meeting (or at least give them notice at that meeting as their contracts usually have a 60 day notice clause).

I am continually bombarded with complaints by developers unable to find “a good property management companyâ€. I know of a few decent ones but they are few and far between. I know a couple of terrible property management companies and right up at the top of my list of nightmare property management companies is indisputably Brookfield Residential Services Ltd.

I have had first hand experience with Brookfield and they have proven themselves absolutely untrustworthy and incompetent. They worked with the board of a condo that I resided in and in the first year of operations the condos budgets literally doubled under their management or should I call a spade a spade “mismanagementâ€.

We finally had a new board elected the second year and they fired Brookfield (we were not the only condo board getting rid of them) but significantly, when we told Brookfield that we were auditing the budgets, they immediately and mysteriously found a $12,000 discrepancy (to the board’s favour) in their books! Imagine that someone so conscientious that they would do their own audit before handing things back over to us and fortunately finding the $12,000 overpay to them before we did which might have led us to form the conclusion that they were taking money from us that was not authorized.

This is all why it is so important that your condo corporation get it right the first time out of the box! Brookfield and the “shill board†(board manipulated by the developer at the turn over meeting). It took two more years to work things out at that condo so the owners suffered for three years under highly questionable management tactics at the hands of Brookfield and the corrupt board before getting costs under total control. Maintenance fell by 50%.

The shill board and the developer’s loyal property manager (“Brookfieldâ€) allowed the mechanical audit (a very important aspect of a condo turnover) to be deferred almost a full year. It should have been undertaken no later than six but preferably three months into registration to allow sufficient time to remedy deficiencies found in the audit. Of course, Brookfield and the corrupt developer manipulated things together that insured that the Mechanical audit wound up after the full year under which time the developer is held accountable. They simply refused to settle the deficiencies requests submitted by the new board and passed the blame onto the old board.

All of this could have been avoided had the owners taken control of their and their condo’s lives by doing it right the first time! The refreshing things is that doing it right the first time is easy! You replace absolutely every contract (property manager, security, maintenance) immediately upon bringing on the original board of directors.

It is also critically important to realize that if you don’t terminate all those contracts, immediately they become permanent and things like the security guards become very difficult and costly to terminate after the fact. You absolutely need your property management company, security company and superintendent accountable and loyal to the owners without equivocation!

I absolutely guarantee you that if you swear by this one simple rule (fire them all) your condo and life experience will benefit immeasurably. If you don’t, then your condo is destined to flail around in the disappointing mediocrity that consumes a decided majority of condos in Toronto.

The quality of your condo experience really is tied directly to what you are prepared to do to make it a better place. Your condo is a reflection of you!
 

dpylyp

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#2
IMHO Many of the points are valid

The reality I think is unrealistic expectations; especially from buyers who are sold a sizzle package and move into a building.
Many were previously renters and merely phoned the management office for repairs or complaints.

Biggest problem I have seen is the squabbling amongst the owners and their "shared" vision of where they live.

Add to this mix a requirement of 60 % majority or proxy to pass anything and you start to understand why new boards are "stranded"

Then add in buildings that share facilities...... with one, two or three boards. You can see the acrimony.

I have a attended a few different boards for investor clients and am always amazed at the 10 to 15% turnout.

If you are buying a condo you need to get involved.
 

whatever

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#3
I'm in a Brookfield building, and I've actually been very impressed so far by the way the building is being managed. They seem to get lots of the little things right, but then I suspect it also has something to do with it being an older, more established building where there are quite a few long time residents who've very actively worked to make the building better
 

Sklar

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#5
"absolutely guarantee you that if you swear by this one simple rule (fire them all) your condo and life experience will benefit immeasurably. If you don’t, then your condo is destined to flail around in the disappointing mediocrity that consumes a decided majority of condos in Toronto."

Truer words have never been spoken. There is so much that goes on with a condo in the first few years (e.g. performance audits, Tarrion Claims, 1st year budget deficit) that it is essential that property manegement be there for the owners. Like Charles said the property management chosen by the developer was chosen because the developer thinks they will be co-operative, and they probably will be because they want more contracts from the developer. You should expect a battle on many issues in the first few years and you need a property manager to fight that battle with/for the board.

One thing I learned is that property managers (even the good ones) have this concept of keeping the board "in the box", so that the property manager stays in control. The board only hears what the proprty manager wants you to hear. It is essential that boards do not get "boxed in". Ask questions, then question the answers, demand to see the documentation, etc. This is the only way that board can make informed decisions, otherwise the board is nothing more than the property manager's puppet.

Sklar
 
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#6
Excellent points by Sklar although I do not agree with keeping a Property Management firm hired by the developer if the residents and Board are unhappy with them, or if they are performing poorly. Depending on the size of the building(s) there may be limited hours that an Administrator or Property Manager is on site given the fact that the developer will often budget well below what it really costs to effectively manage a building, especially in it's first critical years.
If this is the case, campaign the Board of Directors with facts as to why the Property Management firm should be let go and if they agree, form a committee to thoroughly interview prospective Property Management firms and negotiate a contract before giving notice to the firm in place. There are some very good one's out there, but they come at a price.
I went through this at the 2nd place that I bought and the performance from the new Property Management group was apparent within a month. The new Administrator and Property Manager worked very closely with the Board in dealing with staff problems, negotiating better contracts, addressing common area deficiencies with the builder, performance audits and the like.
 

avatarreb

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#7
Reading many of the posts in the Cityplace facebook forum there seem to be quite a number of issues with the developer's chosen management company. I think the worst I've heard about so far was andrejs. What are some companies that have mostly positive track records?
 

DSC

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#9
Is there a list of the top 10 Property Management companies available over the internet?
Selected by who? If you want a good company talk to people in other buildings but remember you want both a good COMPANY (for the back-office stuff and the back-up) and a good MANAGER for the actual day-to-day running etc.
 

cain

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#10
Hi, sorry to hijack this thread, but I'm new here and I'm a bit confused. Whenever I try to make a new post, it tells me I don't have permission to do so even though I already verified my account. Is there something else I have to do before I can post?
 

DSC

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#11
Hi, sorry to hijack this thread, but I'm new here and I'm a bit confused. Whenever I try to make a new post, it tells me I don't have permission to do so even though I already verified my account. Is there something else I have to do before I can post?
You can only start a new thread after you have made 20 (I think) comments to existing threads. This is to stop spammers, or so the Mods say.
 

PinkLucy

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#13
Selected by who? If you want a good company talk to people in other buildings but remember you want both a good COMPANY (for the back-office stuff and the back-up) and a good MANAGER for the actual day-to-day running etc.
When we changed our property management company recently, we did a lot of research -- online, talking to other condo owners, other condo boards. We looked at the type of experience they had -- had they managed new buildings or only existing ones (there are different issues to deal with), did they have experience with tenant/owner issues or only owner-occupied suites, had they managed small, medium and/or large buildings, what sort of training/certification did their staff have? We interviewed management companies to see if our "styles" would be compatible and to understand what each would offer us. It took us some time to come to a decision, but we are happy with the results.
 

radioheadmike

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#14
When we changed our property management company recently, we did a lot of research -- online, talking to other condo owners, other condo boards. We looked at the type of experience they had -- had they managed new buildings or only existing ones (there are different issues to deal with), did they have experience with tenant/owner issues or only owner-occupied suites, had they managed small, medium and/or large buildings, what sort of training/certification did their staff have? We interviewed management companies to see if our "styles" would be compatible and to understand what each would offer us. It took us some time to come to a decision, but we are happy with the results.
May I ask what Management Company you guys picked?
Currently we are interested in Brookfield or DEL.
 

PinkLucy

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#15
May I ask what Management Company you guys picked?
Currently we are interested in Brookfield or DEL.

sent a PM

From everything I have seen personally and heard, both of those companies are very good.

Of course, a lot of it comes down to the actual property manager. Another concern we had was how the company would be able to replace a PM -- some companies don't have the available human resources to do that easily. Staffing PM companies can be tricky with so many new condos -- it takes time to train people properly, for them to gain "in house" experience, etc.