The Pros and Cons of Condo Self-Management vs. Professional Management
As a condo board member, I've been asked on several occasions at AGMs to discuss the benefits of having a professional property management company take over the management of our self-managed condominium. Every unit owner in our building knows that this will mean an increase in our monthly condo fees, but will the benefits make the extra costs worthwhile? Let's look at the pros and cons of hiring a professional management company vs self-management by the condo association.
There's no doubt that hiring a property manager will cost more than having the condo board / HOA manage the project. Monthly condo fees will need to cover those costs, and no unit owner likes to hear that his or her fees are going up. So self management is an attractive option to the owners in general.
However, if you calculate the value of the time the Board members put into looking after condominium issues, it becomes apparent that there's also a large personal cost to these folks that the other owners don't see. Whether or not the project is self-managed, the condo association will still have to hire professionals to handle legal and accounting matters. These are roles the Board members cannot fill themselves unless they have the skills, training and expertise. And even if a Board member is qualified to provide legal or accounting services, the ethics and the legality of such an arrangement would be questionable.
Advantage: Professional management company for expertise and optics
2. Service Level
Individuals who serve on condo boards are typically career people who work during the day and must rely heavily on contractors and resident volunteers to take care of situations that arise while they're at work. This can be frustrating to an owner who has a plumbing problem and can't reach the Board members when the problem arises.
In emergency situations when time is of the essence, it's very important for the affected parties to contact plumbers, electricians, or other service people quickly to mitigate the damage as much as possible. This could be difficult in a self-managed scenario if it occurs at a time when all Board members are at work or away (such as over Christmas or a long weekend - we had just such an instance during my last stint on my condo board). That's when a professional property manager, with a 24/7 emergency line, is ideal. Owners have more peace of mind knowing that no matter what happens, they'll be able to reach someone to deal with the problem - day or night, 365 days a year.
Advantage: Professional management company.
3. Disputes, Violations and Sanctions
Managing a condo or strata sometimes means acting as a collection agency, an enforcer, or an arbitration panel. Imagine having to levy a fine against one of your neighbors because they've violated the Bylaws, or calling the police to deal with a noise complaint or (worst case scenario) to break up a domestic dispute. Those are all situations that our condo board has had to deal with on more than one occasion.
If the sanction is coming from one of your neighbors instead of a third party management company, it's much more personal and is more likely to result in a strained relationship between the parties, if not an outright rift. It's also stressful for the Board members when they have to deal with unpleasant matters like collecting overdue fees and assessments or issuing warnings to fellow owners over infractions. A property management company can handle these situations in an impersonal and detached manner, which allows the Board to maintain a neighborly relationship with the other owners.
Advantage: Professional management company.
4. Community Involvement
A self managed building relies heavily on its volunteers. Getting other owners involved in running the condominium creates a deeper sense of community and instills an even greater pride of ownership among the unit owners. The people in our building routinely volunteer to look after flower beds, help out with sanding of the parkade ramp in winter, run the trash compactor, and sort recyclables. A condo management firm does not have the same relationship with the owners that the Board members do, and in a self managed condo the Board has the opportunity to solicit help and support from other unit owners in a way that an outside management company could not accomplish.
Advantage: Self management.