Condo Media - November 2017 - 33

A SCHIZOPHRENIC VIEW
Association boards and owners also
clearly depend on their managers, but
they have an almost schizophrenic
view of them. On the one hand, they
expect managers to understand and
provide advice on virtually everything,
and bristle when a manager suggests
that an opinion from an attorney or an
accountant or an insurance agent is required. "Why are we paying you?" is the
common response. But when managers
do answer legal or financial questions,
boards don't always trust their input.
"They'll call us to get another opinion, and more often than not, we give
them the same answer as the manager,"
Bloom says. "But when they hear it
from a CPA, it has more credibility. It's
really kind of silly."
Why do boards and owners generally view managers as less necessary,
less capable, less knowledgeable, and
generally "lesser than" the other profes-

ROOFING

sionals on which associations rely?
Why don't managers get the respect accorded those other professionals? And
why is it that board members who don't
flinch at an attorney's hourly fee start
searching for a new management company when the existing one proposes
even a tiny increase?
Part of the problem may be the
compensation structure itself. The
industry standard for the management
fee is a per-door rate. No one knows
exactly when or why this approach was
adopted. "It's just a random thing," Wolf
says. But random or not, the per-door
calculation is firmly entrenched in the
thinking of managers and boards and,
most industry professionals agree, it
makes no sense at all.
"It is totally unrelated to the amount
or quality of the work managers do,"
Brooks notes. But over time, this structure has limited the ability of management companies to increase their fees

SIDING

WINDOWS

as other professionals have been able to
do. Apartment managers, for example,
base their fee on a percentage of rents
collected, Wolf notes. The percentage
hasn't changed, but rents have increased
steadily; as a result, apartment managers
are commanding much more today than
they did 20 years ago. Condominium
managers, on the other hand, seem to be
almost frozen financially in time.
NOT KEEPING UP
When an association client balked at
an increase he proposed, Wolf referred
the board to another manager, who, it
turned out, had managed the property
two decades before. "You're charging
about 1 percent more than I did then,"
the manager told him.
David Levy, CMCA, PCAM, president
and co-owner of Sterling Services, Inc.,
has a similar story. Levy has the original
budget the developer created in 1984
for a 290-unit community he is manag-

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November 2017

Condo Media - November 2017

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