Ann Farmer in Building Operations on April 2, 2019
Teri Rogers knows a thing or two about New York City real estate. She’s a shareholder in a 32-unit co-op on the Upper West Side, and she’s the founder of the popular real estate website Brick Underground. But when her building’s property manager resigned and the board tapped her to help find a new management company, Rogers was in for a shock.
“Even given what I do,” she says, “I didn’t realize management companies charge fees for overseeing capital improvements. I thought there was just a flat annual fee.”
Not quite. Among the 10 smallish to mid-sized management companies she investigated on behalf of her co-op, Rogers found a wide range in fee structures for overseeing capital projects. “Some charged nothing, the old-fashioned way,” she says, “while some charged 1 to 2 percent [of the project budget], and one charged 10 percent. Another said they also offer an hourly project-management fee option. Some start charging at projects above $10,000, others over $100,000. The fees were all over the map.”
Rogers’ board is now in the process of hiring a management company that charges fees only on large, complicated projects, such as window replacement. “I was surprised by the fees,” Rogers says, “yet it didn’t seem unreasonable.”
From where he sits, Steve Greenbaum sees such fees as the most reasonable thing in the world. Greenbaum, the director of property management for Charles H. Greenthal Management, is currently overseeing a $1 million window replacement job at one of its Queens buildings. Even before the first window is installed, the management company will devote hundreds of hours to the project.
First, Greenbaum explains, there are meetings with the board, window companies, and contractors. The manager sits through presentations, sends out requests for proposals, secures bids, analyzes them, then assembles all that information for a follow-up with the board. Once the vendors are chosen, it’s time to negotiate the contracts. That’s followed by a town hall meeting with the unit-owners or shareholders to ensure that everyone understands the full scope of the project. Finally, the agent must schedule when the window crews can enter each unit and do the job.
“Even before the job kicks off, we’ve spent hundreds and hundreds of hours preparing for it,” says Greenbaum. “People don’t realize how much work goes into a capital project. But a lot more is done behind the scenes than any board member would ever notice.”
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.