Managers Get to Jump Through an Extra Hoop

The idea sounds both simple and sensible: co-op and condo boards should make management companies compete for the job of managing their buildings. To this end, a growing number of boards are sending out extensive requests for proposals, or RFPs, when they’re in the market for a new property manager.

The hiring of a property manager is a delicate dance for all parties. Management companies are not uniformly thrilled at being required to jump through this extra hoop, and there are decidedly mixed views on the usefulness of RFPs. To some, they’re a valuable hiring tool; to others, they’re a waste of time. 

“RFPs take a lot of work on the front end,” says Timothy Fine, managing director at Rudd Realty. “To do the job right, an agency needs to put together a committee to provide boilerplate answers and documentation requested by most RFPs. But for more complex, customized questions, we use a team of people from our management, operations, and financial departments.” 

At AKAM Associates, president Michael Berenson, along with a member of the marketing team, personally responds to all RFPs, sometimes spending up to 12 hours on a single one. “Cookie-cutter answers won’t do,” Berenson says. “We do our homework on each building and look up as much information as we can, online and through industry resources, so we can tailor our responses.”

But Berenson says there are times when it’s smarter to be circumspect. “If a board wants to know how we’d handle, say, a dispute that’s smoking- or noise-related, we won’t necessarily offer a solution,” he says. “We’ll explain that the answer depends on the building’s bylaws and that we’d need to get all the facts and documentation.”

The bottom line, says Berenson, is that RFPs work for boards and managing agents alike. “Boards can do an apples-to-apples comparison of companies, and companies are all responding to the same questions,” he notes. “It puts everybody on the same playing field.”

But the playing field may not always be a level one, says Dennis DePaola, executive vice president at Orsid Realty. “We’re by no means a small firm, but we don’t have a marketing department that’s available to answer RFPs,” he says. “And the attention that’s required to answer them means we’re taking time away from providing services to our clients.” This is an area where size matters – and smaller management firms might find themselves at a disadvantage.

While DePaola sees the value of RFPs, he asserts that “things have gotten too extreme. While we can be evaluated on criteria like our fee structure, compliance packages, or the number of people in our alterations department, there’s too much focus on this kind of information. I mean, we’ve gotten RFPs that are 30 pages long. I can’t believe boards are actually reading all this without their eyes glazing over.”

Even worse, the barrage of questions often comes with impossible deadlines. DePaola says he has to ask for extensions for up to one-third of all proposal requests, and that boards only grant them about half the time. “They may be ruling out managing agents who would be perfectly appropriate just because a company, which is busy effectively overseeing their buildings, didn’t have the time to answer an RFP,” he says. “It doesn’t make sense.”

Kimberly Danzi Overs, a Manhattan co-op board president who works as a commercial lawyer, disagrees. “In my work I support clients in running RFP processes and regularly see vendors vie and bid for the opportunity to provide services,” Overs says. “Why shouldn’t our co-op do the same and enjoy the best vendors for the best price, as large corporations do?”