Not entirely satisfied with the performance of your management company? Chances are your board hasn’t sought a new agent because they were frightened of the transition. Such is the case with many of the buildings that have interviewed Ronni Lynn Arougheti, president of Heron, Ltd., a property management company in Manhattan. Arougheti says she has been told surprisingly often that a building will stay with the same firm for fear of the worst-case scenario. However, "it isn’t that bad!" she exclaims. "Some people said they were so worried and stayed so unhappy for so long–and then the transition was seamless."
Arougheti’s optimism does not mean there aren’t serious issues to contend with, but rather that there are ways of dealing with them, ways that board members and managers can prepare so as to avert major difficulties.
Standards for Transition
One issue is getting the proper paperwork turned over from the old management company. There are many reasons this step of the process may go awry. Some companies simply haven’t kept good records. Arougheti reports, "In some transitions, I have literally received paperwork that consisted of loose papers in shopping bags, or boxes that were obviously never opened during the period that the management company was running the building."
Bernd Allen, a partner with the law firm Allen, Morris, Troisi & Simon in Manhattan, points out that managing agents have a contract with co-ops that includes turning over documents to anyone designated by the co-op. "These documents don’t belong to the managing agent; they belong to the co-op." He says that problems with turning over the documentation generally have to do with fees. "When a managing agent is fired, they may decide they’re owed $12,000, and they won’t turn over the paperwork until it’s been paid. This amount could reflect their monthly fee, back fees that haven’t been paid, and items that the agent now realizes were never billed for. A co-op may give a month’s notice; then the agent points out that the contract states they will be given 90 days’ notice and demands three months’ payment."