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October 25, 2007
Who manages a condo building?
In a small condo building, let's say 2 to 4 units, who manages the building after all the units are sold? Does a management company do it? Is it the original developer? Does the unit owners take on the responsibilities? What about in a larger building with 50 to 100 units? Does the developer still manage (and still profit?) the building, or is it turned over to a management company? Thanks for your comments.
Comments
In a larger building the developer usually manages it during the transition or until such time as individual unit owners have accumulated enough voting power to take control over the board. By law the developer cannot retain control the board after 5 years regardless of his ownership position. Most often large buildings use a mangement company and very small ones are self-managed.
Posted by: guest at October 25, 2007 1:18 PM
We live in a small 8 unit condo. The building is maintained by a management company the developer selected. Since everyone is relatively happy with the upkeep, and the monthly fee is low we'll continue with the original company. It is my understanding we have the ability to choose a new one when desired.
Posted by: kdabrowski at October 25, 2007 1:22 PM
It depends on what exactly you mean by managed but typically condos are controlled by a board. Until units are bought the developer controls the board. When a majority of the units are bought they can elect their own board.
I think the law is the New York Condominium Act, Article 9-B of the Real Property Law. It states how it all works.
But once you have by-laws for the condo then you go by those. If you have an offer plan for a condo it usually has the by-laws etc in it and tells you how the management goes from developer to board, how the board is elected, etc.
Posted by: guest at October 25, 2007 1:27 PM
Yes, the board manages a 2-4 unit condo. The board can choose, just like in a coop, whether to self-manage, or whether to hire a management company. Most buildings don't find it cost effective to hire a management company for that size building, but you could always pay for one if the board voted to do so.
Posted by: guest at October 25, 2007 3:36 PM
what do each of your respective managment companies charge you all on a per square foot fee? My mgmt charges 53 cents per square foot which I think is high.
My building is 37500sf and the fee is 20,000 a year so thars $20000/37500sf= .53
ANyone have some info? Im trying to get some perspectives on this.
Posted by: bonsavant at October 25, 2007 4:04 PM
My wife and I are thinking of converting our building into a 4-unit condo. Not doing any real research, we assume that one unit should be preserved for a maintenance person for upkeep of the property. Is this the norm? Can anyone give us some advice on the first steps to take.
Posted by: guest at October 25, 2007 6:40 PM
In a big condo you would have a live in super, but not on a 4 unit building. That would be financial unfeasible. You'll find that out when you do your proforma.
Posted by: guest at October 25, 2007 8:51 PM
so nobody who reads here can post an estimate or an actual management fee amount? Id really like to know what people are getting charged.
Posted by: bonsavant at October 25, 2007 9:15 PM
It would depend on the size of your building. Call around to management companies and ask them for a number. When my building was researching using a management company a few years ago, I think they were going to charge us between 7-10 grand a year. This is for a 5 story brownstone. We elected to self manage and put our money into improvements.
Posted by: guest at October 25, 2007 9:28 PM
7-10k a year is a pretty wide difference. If the average 5 story brownstone is 5000-7000 square feet in size your paying almost a dollar per square foot.
On West 13th street in manhattan, a 250,000 square foot luxe building pays about 17 cents PSF. My uilding at 37500psf pays 53 cents.
A company that gave me an estimate turned out to cost about 31 cents psf. The problem with the industry is that all companies use different standards.
Im trying to figure out some standard to measure value by.
Posted by: bonsavant at October 25, 2007 9:35 PM
Check out the Cooperator. It's free.
Posted by: guest at October 25, 2007 11:52 PM
The per foot calculation is interesting but you have to factor in economy of scale. I think I might develop the same report for a 10 unit building as I would for a 100 unit building. This takes the same amount of time. Getting 3 bids to repair the roof of a 4 unit building takes as much time as it does to repair the roof of a 50 unit building...and so on. Try comparing on a per unit basis since each unit represents, typically, at least one finacial transaction per month.
Posted by: guest at October 25, 2007 11:53 PM
We pay $237 a month. The building has 8 units...about 10,000 -12,0000 sf in total. A maintenance person comes twice a week. This was average for a small building with no amenities.
Posted by: kdabrowski at October 26, 2007 10:03 AM
Kdabrowski:
Is the $237 per month ($2,844 per year) a total for just for the maintenance person or for your management company?
Posted by: guest at October 26, 2007 10:54 AM
There are different types of management, such as full service or limited service. My 8-unit condo pays $500. a month for basically, billing, invoicing, and paperwork. We use one of the management company Supers (they have insurance, etc. through the management company) but we pay $350. per month for the Super (three days of trash and a weekly cleaning (sort of) of the common areas. The management company will recommend service and contractors, but we pay for the work. We're not happy with the service we're receiving, and we are definitely overcharged. We're looking into self-managing. Any advice?
Posted by: guest at October 26, 2007 1:11 PM
Wouldn't it make a difference on what the facilities are? Our building has an elevator and each unit has it's own central AC - and supposed to be a somewhat "luxury" building - this would have some impact on the costs as well
Posted by: guest at October 26, 2007 2:20 PM
Ok..let me be clearer. PSF for basically billing, attending board meetings every 6-8 weeks, taking calls from owners 24/7 and preparing monthly financial documents.
No law, accounting or charges for maint staff. Im talking about strickly admin/mgmt stuff. 53 cents psf. For 32 units thats 625 per unit per year.
625 per unit or 53 cents PSF. Each unit has its own hvac and building has an elevator. These things dont affect a mgmt fee.
There isnt an easy boilerplate way to do this other than keep comparing PSF values.
Im starting to beleive that a good PSF charge is about 20 to 25 cents PSF
Posted by: bonsavant at October 26, 2007 4:12 PM
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