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I've heard of a pre-war co-op that got rid of its management company and guess what, they are doing just fine. The management apparently does not provide any services that the building cannot manage on its own: hiring the staff, processing and managing maintenance money, selecting and employing outside repair services - and that's pretty much all that the management does in my building, for considerable fee.
So this is a question for all: have you had an experience with a self-managed building?
Not a co-op, but I self-managed my condo for awhile. Since we were a small building, it was possible, but it eventually required too much of my time. I have since removed myself from the board- but the current board thinks that the managing agent isn't providing value because they are spending about the same amount of time managing the managing agent as I did managing the building.
That was my thought, too - value against expense. By and large, management companies look like self-serving entities that don't justify their fee, and the money could be spent much wiser.
What would be the mechanism of terminating a management company's services?
The 2 managing agents we have tried were for 1 year contracts. We didn't renew the first one and replaced them with the second. Both require way too much work to justify their fees.
Check your current management contract. It'll have a termination clause, in case you want to end it before its term.
Many years ago we went through several firms, looking for the right fit. In one of those go-rounds, we considered self-management, but decided against it. The problem is in finding residents and board members who together can be the equivalent of the collective experience of all the people at the management company. If there are a few renaissance people who know what they're doing, they quickly burn out because the money they're saving individually on their maintenance doesn't begin to compensate them for their time. You can farm out the bookkeeping and the regulatory compliance, say, but the costs will add up.
Our agent costs us $42,000 per year. My share is $655, and they're worth it to me.
It's human nature to trivialize other people's jobs -- "Oh, I could do that" -- absent a real understanding of what's involved. I remember the sponsor spending an hour listing all the stuff the agent handled that the rest of us only vaguely knew about.
No harm in giving it a shot, though. You owners can't do more damage than a bad agent.
I run my (small) building. When things are going fine, it's super easy. I collect and deposit maintenance checks, I write 5-6 checks a month, I prepare a report once a year, and I work with the accountant to file the tax return.
When things arise, I wish we had a managing agent. E.g., we have no alteration agreement. We have no process for refinancing. We have no good list of contractors, nor any standard agreement form, and have suffered for it in multiple ways. We have no insurance guidelines and had no idea how to work with dueling insurance companies. We had to write multiple letters and make three in-person appearances when our water bill mysteriously increased by 1000%. We had no idea what underlying mortgage companies would finance our building and spent 20 hours researching what a good managing agent would've been able to tell us in two minutes. We have no "benchmark" for move-in / move-out fees (we undercharge, I'm sure), nor any specific board interview guidelines - we were asked blatantly illegal questions.
There is a benefit, in my opinion, to working with someone whose business it is to run a NYC building. Sure, in most months, we'd be paying someone $250 to write five checks, and everyone reacts to that. But, in those unusual months, we'd be saving ourselves a lot of time, hassle, and probably expense. I use this board (and sometimes Brownstoner, sometimes CNYC) for advice as best I can, but so few people have experience running micro Manhattan buildings that the free advice is limited.
NWT is right, as usual. "Oh I can do that" dilletantish attitude does stem from ignorance, mine included (everyone can paint like Picasso, right?)
Any pro is better than any amature, so this issue is closed: management company is here to stay.
Thanks to all.
lad, as someone who answers every effing question from one of my college friends who lives in a self-managed brownstone, I would say, if you have questions call your real estate agent. Especially any of the "old guard" who are former members of the Downtown Brokers Association can do this in their sleep, and will advise you aperiodically just to maintain the relationship.
You could also talk to Soraya M. -- she's the real estate agent of one of the regular members of this board, and does some property management in the Village on the side. I don't know if she works any in Chelsea or not, but I would trust her.
DG Neary Realty
@ openhouse ....I rented a sublet in a co-op before and in the 2 years I lived there, I couldn't get the management or owner to fix the dishwasher (which was held in its compartment by a lone nail) and it took them 3 months to fix the cold-water knob in bathtub. But of course, they were fine with taking my money!
Anon, these are all issues for the owner solely. No impact on the managing agent. Did a broker collect a large fee for arranging your lease? Did the broker explain to you the implications of renting in a co-op? If the answer to the first question is yes and the second no, you may call the broker and ask why not.