Management Company or Not?

Since the dawn of condominiums and home owner associations (including cooperatives and time share resorts) the main issue has always been; what is the advantage of employing an in-house property manager vs: employing a management company. This question is the first statement out of any board members mouth. In reality there is no clear answer, the main issue is, how easy does the board want to live their life and at the same time run the community for which they were elected to serve. Having an in house manager has its advantages as the board is in total control 24/7. However, (in most cases) behind the manager there should be back up staff of some type, administrative assistant, bookkeeper, receptionist, then there is administration duties, purchasing, invoice verification, check writing, contract negotiations, maintenance and janitorial duties, staffing problems and the main item is dealing with resident owners complaints and maintenance issues. These are just a few of the various issues that a manager deals with on a day to day basis.

On top of this, the manager has to have continuing updates on Laws as they pertain to condominiums and HOAs so that their license may be maintained as per the laws of the State (Florida). This is done by many communities and private managers on a continuing basis. On the other hand, a management company has the same responsibilities, but is staffed, usually, by department, i.e. administrative, financial, legal, insurance, maintenance, janitorial and more. The ability to handle all aspects of management is the main function of the management company, such as having the ability to replace managers as may be needed either because of health, vacation, or other reasons, staffing requirements become the responsibility of the management company, thus relieving the day to day situations that a board might face. The final issue is “the bottom line” (cost) is there a savings one way or the other? Probably not, but a management company has an umbrella of insurance to cover all possible issues such as workers compensation, health insurance, 401Ks, unemployment costs and many more expenses. So the question continues; in-house management or management company? Although both options have their advantages and disadvantages, there really is no set answer, the final decision comes down to what an association board of directors want to accomplish in order to make their job easier and to have the most efficient way to operate their community with the wellbeing of the residents being kept in mind. Basically it boils down to a comfort factor… are you comfortable with your own manager and is there a great relationship and a trust factor, or would you be more comfortable with a company who will build a strong relationship and trust between the community and the management company. This is a choice that directors are making on a continuing basis, there is just no clear cut answer.

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