Building Management Service

Building Management Services

Vacant Home Property ManagementWhy do owners of registered condo buildings need to have building management services? For both the condo building and building management services for the rental operation of the same building? This is a situation that is actually quite common. Anyone who is either an investor or someone who plans to live in the building that is a registered condo should know the difference. We will try to explain the difference between the two and why you need separate building management service for each one.

Basically there is a business entity that is responsible for all of the common elements of the building. This is the condo or the strata as it is referred to in some locations. All owners participate and can vote on various issues that the board of directors will bring to them at a general meeting. In addition all owners are eligible to be on the board of directors as well. They are responsible for setting a budget, establishing and maintaining an adequate reserve fund and providing the owners with at minimum an annual report of all financial and operational status. The board will usually hire a building management service or property manager to look after all of these things on their behalf.

Building Management Services and the Board

It is up to the representatives of the building management service to fulfill and carry though all of the boards requirements provided that they are legal of course and comply with the bylaws of the property or condominium. This is a pretty standard example of building management service.

Some Units will be Rented

At some buildings a large number of units may be rented out to tenants. If one owner happens to own these rental units, they may hire a building management service to manage the rental of their units, collect the rent and provide upkeep to the interior of the units. They have no responsibility of looking after the exterior of the building. They work for each individual owner and are responsible for managing the tenant or tenants that rent units in the building they are in. If there are multiple owners who own rental units in the building along with people who own and live in the building, the rental unit owners sometimes will band together to hire one management company to manage all of the rental units in an attempt to reduce their costs overall.

These can be two separate building management services or sometimes they can be the same company, with different people within the building management company responsible for the condo side and the rental side of the business. There is no business or legal relationship between the condo and any tenants that are renting or between the various rental building management services. They are separate entities and all must abide by the condo bylaws etc. Separate financial reports are needed for both entities to ensure that there is no mixing of accounts and payments.

Tenant vs. Owner Issues

Many people find this confusing especially at meetings of the unit owners, however it is important to keep these things separate and distinct. For example if a tenant is causing problems in the building and other owners are complaining, the complaints must be given to the condo building management who in turn will contact the owner of that unit. It is up to the owner of that unit to deal with his or her tenant or the building management company that is managing his or her rental units. The rental building management service will need to then follow up with the tenant to ensure that no more complaints are received.

Hope this helps to explain one aspect of building management service.


Building Management Service

Vacant Home Property ManagementBuilding management service provided by property management companies can vary a great deal. If you are an owner looking to hire a company to provide you with this type of service, there are many issues to consider. We will cover a few of the building management service items that owners of single family buildings all the way up to multiple unit buildings should consider. You may want to prepare a complete list of services that you require. Then request quotes for these services before hiring a building management service company.

Property Management Service List

The list of possible service items that you may want to consider are as follows:

  • Rental of all units
  • Tenant selection
  • Place advertising to fill rental units
  • Collection of rents and collection of overdue rents including small claims courts
  • Review and check of all units pre-occupancy and post occupancy
  • Administration of damage deposits and last month rents
  • Repair and maintenance of all interior items to the unit
  • Repair and maintenance of all exterior items of the building
  • Preparation of an annual budget
  • Report on monthly revenue and expenses
  • Emergency response to maintenance items
  • Hiring of on site managers if needed
  • Management of on site managers if needed
  • Other specific services to the building that you may require

We suggest that owners who are planning to hire a Building Management Service company to provide these services receive very explicit contract guidelines. They can review and understand them, prior to hiring a company of this type.  The contract should state the specifics of what will  be done in as many specific situations as possible. You may require the company to contact you prior to spending any money over $50 for example in an effort to control the costs. You might provide them with specific guidelines for the kind of tenants you want to have in your building. They will attempt to carry out your instructions provided that they meet local and state laws. Specifics such as time frames, cost and actions to be completed by  a specific date should be included as much as possible.

Property Management Reports

Building manage service and contracts covering these services can be very general. It is always a good idea to check with the company providing building management service to you on a regular basis. Request status reports and monitor financial reports on a monthly basis at a minimum. Once you gain confidence with the company you have hired, you may consider relaxing this level of vigilance. In our experience it is a good habit to get into where you monitor the expenses and status reports once a month. Letting the building management service know that you review the reports etc will also help to keep them vigilant as well.

Less specific items should also include your rental strategy. For example what is your rent level going to be, how much will you increase rent each month? Will you rent to only seniors or people with kids or people with pets. There are all kinds of rental strategies to consider. You may decide to leave a unit vacant while you hold out for a tenant willing to pay a higher rent and take care of the place. This can mean less damages and lower cost to you the owner and to the property manager as well. Discuss all of these sorts of items with your manager and write them down so that everyone is clear on your strategy.

Building management service can be provided for individual homes, for apartment buildings that are condos. Also for rental units that make up the total building or part of a building. There are lots of combinations and we will discuss one example in our next post about the services that property managers can provide.


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