The Meter is Running
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Do you know where your management records are?
AUTHORCarl Borenstein, Veritas Management
Making a move. When you’re switching to a new property management company, the transitioning phase is the single most important piece of the process, especially when it comes to a building’s records. We just took over a Brooklyn co-op that had been with one management company for over 20 years and switched to a new company. That lasted for only seven months before the board came to us.
The building had multiple cell towers on the roof and nobody noticed that the payments for one of the leases never reached the co-op. We had to go back and get about ten months’ worth of checks stopped and then re-issued for a lump sum of around $20,000.
Not keeping track. Sometimes you have buildings with professional offices whose rents have escalated, but for some reason the increases were never recorded or collected. Or there was an inaccurate maintenance price-per-share calculation along the way, and the shareholder is not being billed the correct amount. These are examples of the problems we have found in a transition.
What a board can do. An involved board is always on top of its game and helps the transition process. It’s the management company’s responsibility to make sure the process goes well, but the board can provide a contact list of residents with phone numbers and email addresses, as well as governing documents, including the latest house rules, flip tax, sublet and late-fee policies.
Boards need to understand that many larger management companies have a dedicated department that facilitates the transition of information, but it has no direct knowledge of a particular building. That’s where things can get lost.