Can You Manage? Property Manager as Service Provider

When the term "service provider" is used in reference to real estate, usually people take it to mean laundry facility or storage-locker companies, or maybe the firm that runs your building's in-house fitness center. The term isn't often applied to managing agents"¦ although perhaps it should be. After all, your building's managing agent is the professional at the top of the pyramid when it comes to interacting directly with all those other professionals on behalf of your board and residents.

"Managers do everything," says Michael Berenson, president of Manhattan-based management company AKAM Associates. "From overseeing day-to-day operations, organizing trash removal schedules to seeing to exterior leaks," while all the time maintaining the delicate balance between answering to the board while also being a professional in his or her own right, with connections, insider information, and (hopefully) years of real-world, hands-on experience. Looking at your managing agent as a professional service provider - rather than as a casual, all-purpose employee - may inspire your board to communicate its needs clearly and reasonably, evaluate your agent's performance, and make the most of a very important working relationship.

Not Just Another Employee

Though at first glance your managing agent might seem like another - albeit more involved and more interactive - member of your building staff, he or she is actually quite a bit more than that. According to Sam Irlander, an author, educator, and president of Parker Madison Partners, Inc., a Manhattan-based real estate leasing and management company, "[The relationship] is that of employer/employee, but not necessarily in that context. What many directors don't realize is that under the law, to collect maintenance or rent, you must have a broker's license - you must have an agent/principal relationship. It's a fiduciary relationship, and boards may not be aware of that at all; they may hire a manager with little focus beyond the most basic things they're paying for."

Rosemary Paparo, director of management for the Manhattan firm of Buchbinder & Warren, agrees; "I don't know that [managing agents] are employees - at least not in the strictest sense. It's a relationship with a client, more than an employer/employee relationship, like with a porter or service person. There's a certain wider scope of work an agent does."

Along with the managing agent's licensure, he or she very likely possesses expert knowledge of a range of building-related issues that the average volunteer board member can't even begin to guess at. "An agent should have a directory or Rolodex to call upon to answer specific questions," says Paparo. "Your agent doesn't need to know everything, but they need resources to call upon if they're out of their depth." Things like zoning, building codes, the structure of your building itself, the contractor bidding process, and so forth are what you pay your manager to know about - or find out about - and advise your board on when questions arise.

Read More...

Related Articles

How Do You Choose a New Management Firm?

Questions to Ask, Criteria to Check

Finding the Right Match

Evaluating the Board-Management Relationship

Expediting the Co-op Application Process

What Could Be Done to Make the Review Go Faster?