Choosing a management company means entrusting a building’s money, maintenance and neighbourly relations to someone for several years. Picking the lowest quote is therefore not the same as picking the right company. The list below sets out what the owners’ board should discuss before deciding. We cover the fee items separately in How Is an Apartment and Residential Complex Management Fee Set?; here we focus on the criteria beyond price.
What does a management company do, and not do?
A management company runs the building within the authority given by the owners’ board: it bills and collects dues, pays expenses, organises staff and maintenance, keeps the books and prepares board meetings. The company does not decide, it carries out decisions; the budget, the operating plan and large expenditures are set by the board. If a company says “we will do this”, the decision should already have been taken at the board.
Choosing the company is also the board’s job. The contract is made with the building itself; one owner, or the manager alone, should not sign it in their own name. See Choosing a Manager and The Owners’ Board for detail.
Seven questions before you decide
1. How long has the company been operating and how many buildings does it manage? Founding year and number of buildings do not prove quality by themselves, but they show whether it manages buildings of a size similar to yours. A fifty-unit apartment block and a three-hundred-unit complex have different needs.
2. Can it give references? Talking to the managers or owners of two or three buildings it runs tells you more than a presentation. Ask whether the names given can really be reached.
3. Where does the money go? Dues should be paid straight into a bank account opened in the building’s name, not through the company’s own account. Owners should be able to see account movements whenever they want. This is the criterion to weigh most heavily.
4. How are reports delivered, and how often? A monthly income-expense statement, a debt list by unit and a summary of work done should arrive on a fixed day through an accessible channel, not on paper only. “We show it to whoever asks” is not an adequate answer.
5. Who do you reach when something goes wrong? In an emergency (flooding, lift failure, fire), are the contact person, working hours and response time in writing? A building run from an office across the city bears a real cost in delay when something breaks.
6. How are insurance and liability arranged? Who bears the loss when the company is at fault? Is there professional liability insurance? With a volunteer manager the risk is personal; with a professional company the contract should move it to the legal entity.
7. How does it approach the current situation? A good company wants to see the building before quoting: the books, existing contracts, staff and debt list. A quote that says “we will manage it for this much” without seeing the building may grow with extra items later.
What the contract must say
Read the contract at the board before signing; these points should be written clearly:
- Parties and authority: who signs for the building and on which board resolution?
- Scope of duties: are the tasks listed one by one, or is there a vague phrase like “all necessary work”?
- Fee and out-of-scope work: what does the fee include, how are extras charged and how is the annual increase set?
- Term and termination: start, end, automatic renewal and the notice needed to end it. How hard is it to leave if you are unhappy?
- Money and account: which account receives dues, the spending limit and board approval above a set amount.
- Reporting: how often, in what form and how it reaches the owners.
- Handover: how books, documents and the account are handed over when the contract ends. See What to Watch For When Management Changes.
- Data and privacy: how owners’ personal data is protected and what happens to it when the contract ends.
Warning signs
- A very low quote, said to cover everything, given without seeing the building.
- A request that dues be paid into the company’s own account.
- Reluctance to provide reports and documents.
- Avoiding giving references.
- A termination right that cannot be used in practice.
- Pressure to sign without a board resolution.
How to monitor the first three months
The first three months are when the board should be most involved:
- Month one: were the handover record, books, bank account and staff files received in full?
- Month two: did the first monthly report arrive on time and was it clear? Do the figures match the bank account?
- Month three: were faults and requests logged in writing and resolved? Is a maintenance calendar ready?
If the answers are yes, the process is healthy. If not, raise it in writing with the board before the contract’s notice period runs out.
When you assess us
We prefer to answer these questions in writing. We do not quote without seeing the building: at the free survey we see the common areas, technical equipment, existing contracts and staffing on site and present scope and fee in writing. See References for our references and Areas for the districts we serve.