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Self-Management in Stressful Times Some Communities Go it Alone—Others Outsource

While many condominium associations and co-op corporations hire professional property managers or management firms to handle the routine (and not-so-routine) tasks involved in running a multifamily building or HOA, a significant number take the opposite route, eschewing formal management and running their properties themselves. While most of these self-managed communities tend to be on the smaller side, self-management can be successful at any size, from a handful of units to hundreds. 

Self-management involves numerous skills, however; everything from accounting to minor home repairs may need to be handled directly by the board, rather than being delegated by a manager or firm. Obviously, anyone with a plumbing problem can call a plumber; you don’t have to be a professional manager to intervene when a leak rears its head. But that said, the most successful self-managed properties are those that do have a range of practical skills distributed between owners, and a positive, community-oriented view from members. It’s a ‘pitch-in’ sort of atmosphere, and it’s not for everyone.

The arrival of COVID-19 has had major implications for all properties and their management of course, but the pandemic-related restrictions on close personal contact has had a particularly personal effect on smaller, self-managed communities. CooperatorNews spoke with several self-managed community leaders to understand how the global health crisis has changed the way they live, and how they manage themselves.

A Condo Grows in Brooklyn

Benjamin Weinstein is the vice president of a 10-unit condominium building located on Lorimer Street in the Williamsburg section of Brooklyn. The five-story elevator property was built in 2018 and is 100 percent sold. 

Weinstein explains that when the association was originally formed, they had outside management. However, with minimal reserves and residents and board both very conscious of spending and keeping an eye on money, the community reconsidered their situation. “Having off-site management was expensive,” says Weinstein, “and we weren’t getting the quality and attention we felt we paid for. We had the experience we needed in the building; one owner was a real estate guy, another a financial consultant. We felt confident that they could cover the basics. Two members are compensated with forgiveness of some common charges. Economically and in terms of skills, it made sense for us. We started to self-manage a year ago, and it’s made life easier in many respects. We can deal with everything right away, in real time, without waiting for the manager to respond. It didn’t make sense to continue outsourcing the management function—so we eliminated the middleman.”

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2 Comments

  • Correction. Self Management or Outsourced Management is equally as stressful. Outsourced Management does not have the level of concern or financial management as Self Management does. Outsourced Management just wants to get the job done in any way possible, they don't care how much they spend a cooperatives funds nor do they care about insurance policies nor do they shop around for competitive prices. They don't investigate before acting they Act. Self Management puts a legal strain upon a community when you have bad actors everyone suffers. There has to be a better balance between the two.
  • I am the treasurer and director of a 249 unit property that is self-managed with nine separate buildings on 18 acres. We are responsible for all the outside property maintenance, plus heating, most plumbing and hot water. I was elected to the board 11 years ago because the past boards totally mismanaged the property to the point of almost collapsing it financially and physically. The property had a maintenance supervisor and 6 employees that would sleep all day and pilfer anything that they had a chance to get their hands on. There were instances of three different management companies before the property went self-managed that were literally ripping us off. As Debra mentions in her comment, the management companies do not care how they spend the communities' money. The management companies would use insurance brokers, electricians, plumbers and grounds maintenance people that were related or gave kick backs. When I audited the books, I found major holes in how the money was being siphoned off by past and at the time current board members. After I closed all the revenue streams, we lost 5 board members who refused to participate, and I fired the entire maintenance staff and the office manager. I then systematically hired people I trusted and spent a decade rebuilding the property while putting every replaceable item the property had in a spreadsheet to figure out what was needed for our reserves to replace future items with their continuing life cycles. I cataloged every square foot, foot and number of items the property has like sidewalks, doors, roofs, decks, stairs, drainage parking lots, boilers, water heaters, windows, laundry facilities, carpeting, commons painting, pool facilities, lighting, landscaping, plumbing etc. If you are managing a property, you must do a reserve building envelope if you want to plan your budget correctly. We are now about 5 years away with a bright light at the end of the tunnel to having all the forementioned items replaced and in the Que for their next replacement cycle. I have found that without an army of very talented contractors, employees and lawyers none of it would have happened. I also know if you put in effort to make your community better, the right people will miraculously show up just as you need them to.