Condo Media - November 2017 - 34

VALUE
K N O W

Y O U R

ing today. "Insurance has increased 500
percent, water is up 800 percent-all
the costs have increased by 4 or 5 or
even 8 times," Levy says. "But the management fee is almost the same as it was
33 years ago."
Managers are beginning to fight back,
at least to some extent, by explaining
more clearly the relationship between
the management fee and the services
associations demand. When board
members complain that a portfolio
manager oversees too many buildings
to serve their community properly,
Wolf points out that the management
fee covers about one-third of the manager's salary; the rest goes to overhead
expenses-computer equipment,
accounting services, insurance, etc.-
that management companies have to
cover. The low-end fee boards want to
pay, he explains, can't cover the salary
of the college-educated, experienced,
dedicated manager they expect. "The
numbers just don't work."
Levy frames the issue as a comparison between the monthly cable bill,
which owners don't question, and
the management fee, at which board
members balk. "Owners are paying a
fraction of what they pay for cable for
a manager who's responsible for what
is probably the largest financial asset
most of them have."
CHEAPENING THE SERVICE
Sometimes these explanations work,
but not always. The low fees managers
have traditionally charged "cheapens
what they do," Brooks notes. "Because
management services have been sold as
a cheap commodity, owners perceive it
as a cheap commodity," and they view
managers as "fungible," easily replaced
with other managers willing to charge
less. "Owners don't put a value on history or expertise," Brooks says. "We see it
all the time, people without experience
undercut more qualified managers, and
that forces the more experienced managers to keep their prices lower, which
just devalues their service."
That describes the chicken-and-egg

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CONDOMEDIA

problem that has dogged managers
for decades and continues to bedevil
them today. "Managers I know have
been talking about this for 30 years,"
Brooks says. "I don't know how you
break the cycle."
Dronge thinks the problem "begs
more questions than answers. Perception is reality," he says, "and it starts
at the top" with the management
companies themselves. "Are management company owners hiring the right
people? Are they providing the ongoing
professional development training managers need? Do management companies
have the right people in place? Are they
asking the right questions of boards
at the beginning? And are companies
doing all they can to make sure expectations can be met on both sides when a
manager is assigned to a property?"
The search for solutions to the perception problem leads some industry
executives to support a licensing
requirement for managers, which they
think would help in two ways: By providing a credential (and the regulatory
oversight) that attorneys, CPAs, and
other licensed professionals have, and
by establishing criteria for entry.
"It's not a panacea, but I think licensing would help," Bloom says. "Society
likes to see titles," he says. "And without
some entry requirement, a code of
conduct and penalties for bad behavior,
it's going to be very hard for managers to
get the respect they deserve."
LICENSING: MAYBE NOT
While many share that view, some
industry professionals, including some
managers, question how much of a difference licensing would make.
"It's a step in the right direction
toward professionalism," Wolf agrees,
"and it would add credibility [to what
we do]. But I'm not convinced that
licensing would make a hootenanny of
difference in what people are willing to
pay their managers."
Although he has lobbied actively for
manager licensing in the past, Wolf
says that he is "over the licensing thing.

I think we should have it and I'll support it, but I see no reason to push
management companies to add more
cost and more time to the list of things
for which we won't be paid."
Robert McBride, CMCA, AMS,
PCAM, president of The Dartmouth
Group, an Associa Company, also
questions the benefits of licensing.
"Certifications and licensing count for
something," he agrees. "But you can
have all the credentials you want and
still be horrible at what you do; and you
can have no credentials at all, but have
tremendous street smarts and
be terrific."
The solution for the respect and compensation problems managers confront
isn't licensing, McBride contends; it
is for managers to do a better job of
conveying the value of the services they
provide. "We have to be able to differentiate the quality of our services [from
the services lower-priced competitors
offer], and we have to figure out how
to do that in a way that makes sense.
It comes down to how managers market
themselves, how they explain their
value, and their willingness to refuse
to provide services for less than they
are worth. That may be the only way to
break the cycle."
Wolf agrees completely. "Managers
need to focus their energy on educating clients about what we do [and the
value we contribute] to condominium
communities. We need to educate our
business partners, too," Wolf says, "so
they can beat the [drums] for us, the way
we beat the [drums] for them."
Changing long-held, firmly entrenched perceptions of managers
and how they should be compensated
won't be easy, he's aware. "It's going to
be a slow process. But the more we talk
about it and the more we work on it, the
better it will be."
■ NENA GROSKIND, IS PRESIDENT
OF ECONTENTPLUS, PROVIDING
EDITORIAL CONTENT FOR
WEBSITES, PRINT AND ELECTRONIC
NEWSLETTERS, AND MAGAZINES.
Condo Media - November 2017

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