Any New York building of significant size needs a professional building manager in order to function from day-to-day, and even smaller buildings often need some help from a management company. Before any management company is hired, however, there’s a contract involved, and this can be tricky.
As with any vendor of goods or services, property managers usually work under contract to their client communities—be they co-ops, condos or homeowner associations. Unlike other providers, however, property managers handle the intimate, day-to-day administrative work of a building or community, including finances, legal issues and sensitive personal and business-related information.
Having those duties, responsibilities and obligations spelled out in crystal-clear terms is vital to the smooth functioning of the building’s community, as well as the quick resolution of any issues pertaining to its management and relations between management and the board.
Both boards and non-board residents should know what terms should—and should not—be in their management contract. First, you need to know some basics.
Gregory Carlson, executive director of the Federation of New York Housing Cooperatives and Condominiums (FNYHC) and president of the National Association of Housing Cooperatives, says that a management contract is usually formed between the co-op, condo or HOA and the management firm. Management companies usually have a set contract that they use for every building in their portfolio, which they can customize depending on the needs of an individual client community. If the community hires its own independent managing agent, it usually uses an employment contract.