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21 August 2015
Condo Business
So the board wants to change management companies. The first question to answer is: Why? What is it that the corporation isn’t getting from the current management company? What would the board like to see from the new management company?
Once a board has established what it’s looking for in a new management company, the board needs to determine how it will select a new management company. Will the decision be based on information the board gets in reply to its request for proposal (RFP), or positive references? Or maybe it will be based on an emotional connection which forms when the board meets with candidates.
The reality is: all of these factors will influence the decision. The board assumes the responsibility of selecting a new management company. This selection process requires an exchange of information and personal interaction between the board and the management company candidates, which begins with the board preparing an RFP for the management of the corporation.
Note: Only distribute the RFP after interested management companies have signed confidentiality agreements.
Disclose building basics
Introduce candidates to the building with the RFP. Disclose the basics, such as the age of the building, the number of units, the number of elevators, any amenities and any commercial units. Also point out specifics that may affect the building’s future operations, such as past events (e.g. floods) or improvements. It’s important to make the management company candidates aware of what they will be walking into if they win the contract.
Consider including the condominium’s common element fees per square foot to help management companies assess their ability to improve the building’s operations. Also specify whether the building is sub-metered or the utilities are included in the common element fees, as well as who manages the billing (a third party or the management company). In the latter case, additional fees may apply.
Set out service requirements
Clearly spell out in the RFP what services are required, along with the board’s expectations.
For one, the manager should be able to prepare the budget for the corporation and review the financial results with the board. A firm which has the right personnel and accounting software will deliver accurate and timely financial information that will improve the overall management of the property.
Also describe the building’s demographics, as services will often vary based on the age and background of residents. A building which skews senior may have residents who require more assistance, while a building which skews younger may require more rules enforcement as a result of social activities.
Include other responsibilities, such as overseeing contractors and maintenance staff, conducting monthly reviews of the building’s physical elements and responding to any new maintenance issues.
Consider the emotional connection
Technical and administrative ability are a prerequisite, but those aren’t the only factors to weigh when selecting a new management company. The emotional connection between the manager, the board and the residents will have a great impact on the success or failure of the future manager.
Once the board has received responses to its RFP and narrowed down its candidates to a short list, the board should encourage the management companies to visit the site to familiarize themselves with the property. Recognize, though, that such an inspection can only touch the surface. That said, it will allow both sides to get acquainted with one another.
Check credentials, contact references
Look for ACMO 2000-certified management companies. The certification, awarded by the Association of Condominium Managers of Ontario (ACMO), recognizes quality of service. More specifically, ACMO 2000 certification signifies that a company has successfully completed a third-party audit and complies with industry standards. Also consider making it a prerequisite that the management staff who will be assigned to the building either possess or be actively pursuing the Registered Condominium Manager (RCM) designation.
The board should prepare a list of questions to ask the references provided by the property manager. At least two board members should check the references. Keep in mind that references usually support the candidate. Therefore, it’s important to ask the right questions, which should cover daily management tasks and the management personnel.
Finally, insist on meeting the designated manager to ensure that he or she is the right fit. A good fit between the manager and the board will ultimately help alleviate the board’s workload. Clear communication is a key ingredient in the success of this relationship.
When hiring a new management company, always remember that while the physical and administrative abilities of the management company are important, so too is the human connection.
Shlomo Sharon is CEO of Taft Management Inc. and a member of CCI since 2002. Taft Management Inc. is an ACMO 2000 Certified Property Management Company and has been providing property management services since 1996. Visit the website www.taft-forward.com for further information or email him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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