Lisa Prevost in Building Operations on January 18, 2019
Complying with New York City’s rules and regulations has always been a big part of a property manager’s job. But now, as regulations proliferate at a dizzying rate, many property management companies have staffs dedicated to compliance, and those staffs frequently rely on computer software and the backing of compliance companies. The added cost, according to many boards, beats the alternative: paying off a mushrooming pile of fines.
Stephanie Cardello, director of compliance at FirstService Residential, oversees a four-person department that relies on a compliance platform to follow the status of complaints, violations, inspections, and permits on a 24/7 basis. While property managers are ultimately responsible for seeing that their buildings are in full compliance, the added layer of a centralized team overseeing regulatory matters helps ensure all deadlines are being met, Cardello says.
Jessica Tusing, compliance director at Argo Management, maintains a database of all of the company’s building compliance needs and centralizes certain compliance requirements, such as fuel-tank testing. By acting as the point person for the vendors doing tank testing or boiler tune-ups, she can ease the burden on managers and negotiate lower prices, she says.
Argo often contracts with Jack Jaffa & Associates, a major compliance platform, to help resolve any outstanding violations. Jaffa also offers a monitoring and alert system. But the foundation of its business is as a violation removal consultant, says Megan Feldman, the company’s sales director. The company is divided into departments that specialize in dealing with specific city agencies. Clients contract for violation removal services on an à la carte basis.
“We review the violation and advise the client on what needs to be done and why they got a violation,” Feldman says. “The goal is to get the violation removed and corrected and, at the same time, try and get them the lowest penalty possible. Our employees understand how the agency operates, and we’re able to provide a more informed service for the client.”
SiteCompli, another compliance platform, works with an outside administrative law firm that handles violations and hearings for clients who want resolution services, says Jonathan Fertel, the company’s vice president for customer success.
Some management companies consider compliance management a cost of doing business and do not charge buildings extra for using it, while others pass the cost along to clients. SiteCompli charges for its service on a per-unit basis, roughly $1.25 to $1.50 per-unit per month, with a $250 monthly minimum and an annual subscription. (Management companies with very large portfolios typically get discounts.) Jaffa declined to disclose its fees, other than to say the company charges a flat rate per violation, including all work required to resolve it, and a monthly fee for monitoring services. A self-managed building could contract for these services if the board is prepared to pay the $250 monthly minimum.
As he talks to potential clients throughout the city, Fertel of SiteCompli is finding that while property management in New York is still “very much an old-school pen-and-paper industry,” the thinking is changing. Companies often argue that they don’t want software to replace the valued employee they have monitoring compliance. “But when we start showing the client what they’re not aware of, they quickly realize they need us,” he says. “We don’t replace their employees – we make them more effective.”
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