The Self-Management Option Go it Alone, or Outsource?

The Self-Management Option

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 self-managed communities tend to be on the smaller side, the strategy can be successful at any size, from a handful of units to hundreds. 

Self-management involves a broad set of 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 know what to do when a leak rears its head. But that said, the most successful self-managed properties are those whose owners do have a range of practical skills and a positive, community-oriented attitude—and this ‘pitch-in’ sort of atmosphere may not be for everyone.

The pandemic had major implications for all properties and their management of course, but restrictions on close personal contact had an especially 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 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 alike very budget-conscious, 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 [for their board service] with forgiveness of some common charges. Economically and in terms of skills, it made sense for us. We started to self-manage in 2019, 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.”

The association had an issue in late 2020 with the building’s old-style intercom system. They switched to a company that specializes in providing communication systems and services to small, non-staffed buildings. “That overhaul was seamless,” says Weinstein, “because we dealt with them directly—no middle-man in the form of a manager. Nothing was lost in communication or translation.” 

In terms of how COVID-19 affected their property and its management, Weinstein says, “We had to make some adjustments. There was more foot traffic, as everyone was home and everything was getting delivered, so we had the building cleaned twice as much as before. We also saw more repairs resulting from more wear-and-tear. Early on we had issues with members not wearing masks or sanitizing properly, but we got it under control quickly. In terms of payments and collections, everything was done online remotely even before the pandemic, so that didn’t change. Seventy-five percent of our members pay via direct payment online, and 25% slip a check under the treasurer’s door. He makes deposits and payments online, through his phone. There isn’t any physical component to our cash flow items at all.” Weinstein says the board still does all their meetings on the Zoom video conferencing platform. 

New England Strong

High View condos, located on Cape Cod in Sandwich, Massachusetts, is a 96-unit condominium community. The units are located in four three-level garden apartment style buildings that were constructed in phases between 1974 and 1982. The property is not age-restricted, and features a clubhouse. 

Ursula Price is High View’s treasurer, and has served as such since 1993. She says that when the property converted to condominium ownership, it had a contracted management company. The association changed companies several times, but the residents (several of whom were professionals in architecture, engineering, or real estate themselves) weren’t thrilled with any of them—mostly because of deferred maintenance. Residents with relevant, applicable experience took over the board and ultimately ended the management relationship. 

Since then, says Price, “Self-management has served us well. The dynamic of the property has changed. With the pandemic, people were home much more, and they noticed things like maintenance projects left too long without being addressed, which caused some conflict. Younger owners tend to want more work done to improve the look of the property.”

For example, Price continues, “There’s been an issue with landscaping—some contention between older and younger residents. We have 12 acres—but our landscaper hasn’t had the staff needed to do the work, and some of the older residents don’t want to spend the money.” That said, Price adds that they really didn’t experience any other vendor problems during the pandemic. All their vendors are family-operated businesses, and there was no interruption in services this past spring or summer. Neighbors have also stepped up to help neighbors—especially the elderly —and even when some conflict arose over some community members wanting the association’s indoor pool open, the issue was eventually resolved. 

As health guidelines evolved over the course of the pandemic, the High View board abided by the governor’s mandates and those of the local Board of Health. Maintenance on the pool had been five days a week prior to the crisis, but was expanded to daily cleaning and sanitization, including the clubhouse. When shared facilities were cleared to reopen, the association’s attorney drafted indemnification forms, and the board required waivers from pool users. The Sandwich Board of Health inspected the pool and clubhouse, and initially advised against opening it for use—but the board went back to the drawing board and was eventually able to map out protocols that satisfied the health inspectors that the amenity could be opened with minimal risk.”

Midwestern Practical

Jose Rodriguez is the president of a three-story, 26-unit walk-up condominium association at 1618 West Wallen Avenue in Chicago. The building also features a courtyard and garden, and became a condominium in 2006.

Overall, Rodriquez says, the community’s response to and management of the pandemic went smoothly. “The most difficult part was figuring out what the guidelines were for prevention of spread, and compliance with city and state rules,” he says. “What the governor and mayor said was often different; for example, we were in lockdown in Chicago, but nearby suburbs were open.”

Rodriguez goes on to say that “the pandemic changed some of the things we do concerning cleaning of common areas. We had to hire someone who could do COVID cleaning. We did it ourselves before the pandemic on a volunteer basis, but we hired someone to come in twice a week to do the stairwells and sanitize to protect owners and incur less liability for the association. It was an added expense, but the decision was based on our attorney’s advice, and the community as a whole taking a decision together.”

At one point, the board considered hiring a full-time manager as a result of the pandemic, but ultimately decided it was just too expensive. Also, the board was concerned that if people lost their jobs and couldn’t pay their monthly common charges, the association would have even less money to spare. So far, self-management has proven the right move for this particular community. 

Shifting to Off-Site Management

Not every community is ready—or able —to go it alone, however. Stuart Halper, vice president of New York-based Impact Management, specializes in small to mid-sized co-op and condominium properties, and says he’s seen some self-managed properties shift to off-site management (including his firm) since the pandemic hit. “Many of them are small properties coming off of self-management,” he says, “however—could I say that it’s specifically because of COVID-19 that they’ve turned to [professional] management? I don’t really know the answer to that.” 

However, Halper goes on to say that he believes one particular reason they have seen an increase in new clients during the pandemic is that “We remained open throughout the pandemic. We never shut down, nor did we go fully remote. I do believe that made a significant difference when we’ve interviewed with a lot of smaller properties. We’ve found that many management companies—especially the smaller ones—were working remotely and continued to work remotely, and some of their clients have not been satisfied with their performance.”

Two years of pandemic disruption has been challenging for properties large and small, professionally managed and self-managed alike. At the end of the day, the strategy that works best for your particular community lies more with the individuals in it and their willingness to pitch in, cooperate, and adjust to a frequently-changing landscape.                

AJ Sidransky is a staff writer/reporter for CooperatorNews, and a published novelist. He can be reached at alan@yrinc.com.

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Comments

  • I work with many self-managed buildings in NYC as a contracted Superintendent through Task Master United. We worked closely with the board to help cover many aspects of management, along with routine maintenance and building cleaning. Some properties have us on call to schedule and oversee contractor appointments. Others are looking for regular site visits for building maintenance inspections to report to the Board. They also want someone trustworthy with access to the apartments to assist residents with repairs, maintenance, and 24/7 emergency assistance. The Board members are usually knowledgeable and somewhat available to take on tasks that they don't need to outsource. So, although services vary significantly from building to building, they request what's required to save money.