Before making your initial telephone contact with a new management company candidate, it is an excellent idea to gather your property’s vital details – description, income and expense information – for them so that they are in a position to provide you with detailed responses to your interview questions. Generally, inquiries to a new management company will be directed toward their professional experience in key areas including leasing, maintenance, vendor relationships, management, operations and budgeting. The goal of your interview should be geared to establishing whether the management company has a proven track record and expertise in collections, government compliance, facilities management, leasing, marketing, advertising, public relations, financial analysis and budget preparation. The following is a list of tips to keep in mind when interviewing for a new management company:
* The management company’s internal operations resources are a vital area of concern. They should have a competent accounting department, a back office and employees who are knowledgeable and experienced in building engineering. A company’s ability to prepare comprehensible management reports is essential. The management company should also be in a position to supervise your property’s staff, including hiring, firing and documentation of staff performance, and it should provide required responses to federal, state and local laws for violations issued against your property. The management company should be in a position to provide knowledgeable interaction with your property’s other professionals including legal counsel, accountants, engineers and architects in addition to having the ability to provide responses to resident inquiries and concerns.
* Make sure the management company does not have a single, master account or tied accounts for all of their properties. The accounts should always be segregated. Also, management agreements should have a cap on the amount of the property’s money that can be spent without the board’s consent. Ask about the management company’s insurance and obtain a copy of their financial statement.
* Look for appropriate licenses, credentials and quality memberships on the part of the management company.
* Always check references. It is not enough to get a list of names the manager represents. A conscientious board should get references for similar types of properties. The inquiry is not whether they do a good job, since only positive references will be provided; rather, the inquiry should deal with how specific situations get handled and whether the manager’s approach to a similar property is compatible with yours.
* Find out the fee a management company intends to charge. Some companies offer low rates but have all types of hidden charges and per diem rates that dramatically raise the actual fee.
* Visit the management company’s offices. Have them take you through the different steps in dealing with a delinquency or a service request. If the management company cannot impress you with the handling of these matters during a site visit, they will never be able to do so with respect to your property.
* Do not forget to ask if the management company offers a month free or some other period of time during their transition into the property.
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Author : Richard P. Gerber
Company : Hart, King & Coldren
Richard P. Gerber is a partner with the professional law firm of Hart, King & Coldren in Santa Ana, Calif.
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