Best Practices Of A Management Agent
Kathy Sinicropi, CPM
During the recent MAHC Annual Conference, it was surprising to hear attendees share alarming stories of the poor experiences they encounter with their Management Agent. Having been in the property management business for over 37 years, I have developed a set of “Best Practices” that serve useful as a tool to professionally deliver and fulfill our fiduciary responsibilities to our clients. The concepts that follow are merely suggestions and qualities you should look for when selecting a professional property management company.
First and foremost, an initial meeting between the Agent and the Board should occur to identify and confirm in writing the Board’s goals and objectives. This clearly outlines the Board’s priorities so the Agent knows what is expected. Then it is important to keep the lines of communication open and provide updates on progress and discuss any additions required so everyone stays on the same page moving forward.
Customer Service & Communication
Communication is the key to a successful partnership. It’s vital to the communities’ success that the Agent is communicating with the Board on many different levels and in a variety of ways. It is important for the Agent to determine what form of communication works best since it varies by person and board. The Agent’s attendance at Board meetings is vital and they should provide written communications detailing all aspects of the property’s operations during the last month. There should be written follow up after the meeting to ensure Board directives are recorded to so they can be properly responded to and accomplished.
Our recommendation would be to include the following written documentation to the Board
- Updates on client’s goals and objectives.
- Member receivables – report any legal action taken per your collection policy.
- Financial management - provide explanations for items on the monthly financial report that cause concern such as aged payables over 30 days old or for budget variances.
- Capital improvements – bids and recommendations on any upcoming projects or status updates on projects that are in process. Service contractor oversight – status updates on any ongoing contracts.
- Insurance incidents or claims.
- Staffing updates or performance concerns.
- Regulatory agency or mortgage company compliance.
- Enforcement of rules.
In addition to regular written communications from the management agent, as a leader, I find it very helpful to personally reach out to my clients, on a periodic basis, to determine if we are meeting the outlined goals and objectives. This keeps both parties aware of any concerns early so they can be resolved before becoming irreconcilable.
Property Operations Oversight
It is important that the Agent representative visit the property on a regular basis. During this time they might inspect files, tour the property, inspect vacant units, inspect maintenance and contracted work and ensure the staff and outside contractors are performing their jobs as agreed. The old saying “It’s not what you expect but what you inspect” certainly holds true in Inspecting the property on all levels is not done because the Agent does not trust the staff or the contractors, it is done be-cause it is their JOB to oversee the entire operation and they have an obligation to the board to carry out this duty. Your management agent would develop a plan to handle routine, preventative and after hours emergency maintenance consistent with the clients directives.
Financial Controls and Oversight
Operating within the Best Practices, the management company will have an established set of internal controls for the handling of your funds. One way of doing this is preparing annual operating budgets and monitoring the ongoing performance of the property budget. Your property funds must be maintained in separate bank accounts and never commingled with the funds from other properties. It is imperative that the Agent and Board conduct business activities with knowledge of Fair Housing Law and in compliance with all applicable laws and regulations.
Company Emergency Preparedness
Your Agent’s detailed emergency preparedness plan and response guide guarantees your property is prepared to deal with the unexpected. This helps to protect lives and will ensure the stability of the property’s assets and operations.
As a Certified Property Manager, CPM®, I have been trained ** and have agreed to uphold the Code of Professional Ethics as outlined by the Institute of Real Estate Management.
Management company written policies and procedures define ethical relationships between the employees of the agent, clients, members and vendors. I highly recommend doing business with a company that holds these, or similar, credentials. Professionals that are actively involved in industry associations stay current on industry data, have access to ongoing continuing education and are exposed to many networking opportunities to strengthen their knowledge and better manage your property. Finally, your management company should never act beyond the scope of their authority and that should be clearly defined in the written management agreement.
Resources and Business Partners
Your Management Agent is a professional but is not an expert in all areas of our business. Agents must be willing to recommend bringing in additional professionals when the need arises. Boards should not expect their Agent to be an expert in all areas and be willing to pay for those additional resources when recommended. Sometimes bringing in your legal, or other profession-al, before a problem arises can save thousands of dollars in pre-venting a problem before it expands into something bigger.
I hope you found this information informative. As you can imagine, there is more that could be shared on each subject outlined above, and in much more detail, but this should provide a starting guide to ensure your agent is following “Best Practices” for managing your property.