Hiring the best co-op management company is one of the most important decisions board members have to make to efficiently operate a building. However, selecting the right management company can be a difficult job as many factors come into play. A co-op management company is responsible for managing the co-op’s finances, complying with the co-op’s legal requirements, maintaining the co-op in good condition, and taking steps to keep the co-op occupancy full.
Here are some of the important tips that will help board members in choosing a co-op management company:
1- Determine the Co-op’s Requirements and Budget
Before hiring a co-op management company, board members should determine which services are the most important for the building and its residents as these companies charge fees based on the activities performed and the size of the co-op building. Some co-ops are able to hire a management company for a lower annual fee by offering a separate fee for carrying out any one-off activities, such as supervising a renovation. The board can negotiate and settle for lower annual fees if they take co-op’s services for only the essential activities required for managing the building.
2- Obtain Recommendations from Industry Experts
There might be many co-op management companies operating in the city near your co-op. If you don’t know which management company is suitable, you can obtain a list from the industry experts or seek recommendations from other co-op board members. However, the board should do further due diligence to ascertain whether the recommendations they got meet the unique needs of their co-op.
3- Advertise for Management Services
The board members of a co-op can also tender or advertise for hiring the services of a co-op management company if they don’t want to rely on the recommendations of other board members. Advertising for hiring management services can be a decent option if the board wants to attract companies that are interested to work on its terms, and the board can have an option to choose among many firms based on their quoted price and/or other aspects.
4- Scrutinize and shortlist the Management Companies
After the board gets proposals from management companies, it needs to scrutinize them for various factors to determine the ones that suit the co-op’s needs. For example, the board can evaluate the management firm’s size, its current and past clients, the experience of the firm and that of the account manager, services offered, medium of file storage, cost-cutting policy, insurance coverage, and other related services. The process can help the board to shortlist the companies, which can be further narrowed down based on their requirement. The board can also opt to conduct interviews with the management team to determine the firms’ suitability for the role.
The board should look for firms that perform conventional activities innovatively or use technology to facilitate the occupants of the co-op. For example, Daisy is one such co-op management company that provides the occupants of the co-op with an app that enables them to stay updated about the activities in the building, communicate with the property managers, and resolve their issues instantly.
6- Sign an Agreement
The board needs to select the best one from the shortlisted companies and then start the process of signing an agreement. The agreement should clearly disclose the services that the board expects the hired firm to carry out. If the board is entering into their first-ever agreement with a management firm, it can take the services of a lawyer or review any existing contracts of other co-ops with management companies. The board must ensure that the agreement contains all the clauses so that in case of any ambiguity, the issue could be resolved amicably.
A co-op management company is a pivotal decision the co-op’s board has to take, and they should carefully take this decision as the well-being of the building and its occupants depend on how effectively the management company performs its functions. While there are many co-op management companies, each one has different management styles and fee structures. It makes sense that the board evaluates firms stringently before awarding contracts to take the charge of managing the building. The board must also keep an oversight on the firm so that the occupants can have the best living experience in the building.