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Should Your Small Building Trade "Back Office Only" Firm for Management Co.?

Jennifer V. Hughes in Board Operations on August 30, 2012

The Britannia, Morningside Heights, Manhattan

Aug. 30, 2012

If board members are considering back-office only services, Schneider advises them to ask a potential company how often it goes to the bank for its clients to bring in their deposits and pay bills. "How many people do they have in their office to go to the bank a few times a week?" he says. "You also want to look at a copy of their financial report that they give to their back office clients. You want to see that it's professional and it gives you the information you need."

There Will Always Be The Britannia

Steve Elliott is the board president at The Britannia, a 52-unit condo in Morningside Heights. That building used The Back Office for its financial services for about 10 years but recently switched to full outside management. Elliott says they were very happy with the firm's work, but changes at the building required more attention.

"They did a tremendous job, but things have just gotten more complicated in terms of city filings [for] our Local Law 11 work," he says. "The main people on the board who were doing the bulk of the work were just feeling overwhelmed by the amount of stuff that had to be done. It had become a full-time job to handle things when people move in, and it was just a constant stream."

The Britannia went to what Elliott calls a "semi-managed" state with Veritas Property Management. With Back Office Inc., the co-op was paying about $400 a month; its new bill is closer to $1,000. "Most of what they do is financially related, but they also help us deal with permits and they've been helpful in the relationships they have."

Quick Switch

Elliott recalls an issue the building had with the switch from No. 2 to No. 4 oil and how Veritas knew of a vendor that could come in very quickly, assess the situation, and come up with a plan that helped the building avoid fines.

BOO services can work well for buildings if they have a top-notch super and few major building issues, Elliott notes. He also suggests asking prospective back office providers how they've dealt with clients when major issues arise.

"You also want to know how much attention they are going to give you," he says. "We're not a huge building, but we do have our needs, and you don't want to feel like you're lost behind a bigger, fancier building."

Josh Blackman of Brownstone Management says it is very important for boards that go with back office only to understand that they won't be getting the full managing-agent treatment.

He recalls a recent case where a new buyer at a condo got in touch with him because all the sale paperwork indicated that owners send common charge checks to him. The buyer's key didn't work and the previous owner could not be reached. "There was nothing I could do," he says. "I didn't have the key."


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