r, The Management Industry’s Product…The Board Members’ Expectations… Why Aren’t They One And The Same?

Greetings. This is the first in a series of informational bulletins addressed to clients and friends of A. R. Consulting.

“Condominium Board Members face the world’s most demanding shareholders…their neighbours.”

Pretty catchy, huh? More about that later. But now that I have your attention, I must tell you that I recently had to do one of the most difficult parts of my job. I had to inform two (out of three) very worthy management candidates that they did not get the contract to manage a condominium corporation whose Board of Directors had retained me to help them find new management.

This was particularly unpleasant because the leaders of both unsuccessful companies are aware of, and sympathetic to, the above quotation. They each understand what condominium directors are routinely faced with. And both provide a good product. It’s not that their companies “lost” a very close competition that I found so annoying. We all lose at some point in life, and hopefully learn from the experience. What bothered me about it is that there seem to be so few people in today’s management industry who get it, the way these gentlemen do.

There are a number of talented, sincere, even heroic on-site property managers who buy into this premise, and who conduct themselves accordingly. They’re true professionals in every sense of that word, and they have my undying admiration.

But there are just as many others, if not more, who don’t fit this pattern. And more importantly, some of the leaders of management companies don’t either, although many do. In fact, I will go so far as to say this: I don’t know of any other endeavour that is as inept at client relations as the condominium management industry.

And if the people in the industry can’t or won’t listen to and understand what their clients are up against (I mean really understand), how can the industry’s product match the clients’ rightful expectations? “Rightful” expectations being defined within, and based upon, (a) the parameters set by condominium legislation, (b) guidance from such programs as the Canadian Condominium Institute’s instructional courses, and (c) advice from independent condominium consultants. Add (d) common sense, and (e) concern for one’s neighbours and community.

The Background

I know whereof I speak. I got into this business in December, 1973. (Would you believe I was four years old, and a very quick learner? No? Whatever.) I won’t bore you with the details, but suffice to say that I joined a condominium management company as assistant controller. Within six months, I had a cauliflower ear from constantly being on the ‘phone. Not from doing accounting work, but from talking to the clients (the Board Members), helping them understand what, at that time, I barely understood myself: the intriguing dynamic of condominium.

Suddenly these weren’t rental buildings anymore. These were ownership situations, non-profit environments, elected representatives (the Board) governing the property in which they (almost always) resided. A Condominium Act, for gosh sakes.

We all learned together. Whereas many of the first “condominium property managers” had originally been superintendents of rental buildings, these were eventually supplanted by specialists in condominium. And management.

The Boards learned, too. Great (sometimes painful) progress was made, as they aspired to “watch the pennies and the dollars will take care of themselves.” They came to understand that there was more to management than the on-site manager. They learned that refusing to increase maintenance fees when necessary, on the premise that this made them “nice guys,” was shortsighted and foolhardy.

And the management industry learned too. We worked hands-on with the Act, the declarations, and by-laws. We tutored and mentored the managers. We ran booths and made speeches at conferences. We created our own specifications for landscaping and maintenance. We established committees and lifestyle programs. So why do I say the industry and the client still don’t “connect” the way they should?

The Present

Let me give you a formula:

  • the management company gives the Board advice
  • the Board makes decisions based on that advice, and other appropriate criteria
  • the management company carries out the decisions made by the Board
  • the Board, as the executive body responsible to the condominium corporation, monitors the management company’s execution of the Board’s decisions

That sequence describes the absolute basic minimum requirement as far as the relationships between the Board and management, management and the corporation, and the Board and the corporation. Does it describe your condominium environment?

Simply put, today’s management industry has established a more than adequate routine of preventive maintenance. And there is a decent understanding of the legislation and the lifestyle. But as often as not, there is a lack of what I’d consider an appropriate response, in general terms, to concerns and inquiries made at the Board level. It too frequently ranges from “leave us alone and let us manage” to outright hostility. (Been there, seen it.)

And I’m allowing for the fact that some Boards tend to micro-manage, which, if taken to extremes, is usually a big mistake.

Some ten years ago, I coined the quotation with which this article begins. I say that only because it reflects the most basic principle, in my opinion, of the entire condominium environment. Part of my job is conducting interviews of management companies, in the presence of the Boards, based on questionnaires I’ve designed for the occasion (so as to compare apples to apples). During one such session, one of the management candidates, a former associate of mine, answered one of the questions by referring to the quotation in question as if it were his own. While imitation is indeed the sincerest form of flattery, I’d have been more impressed if these words had indeed reflected his principles, rather than being a collection of “spin” meant to impress a potential client.

(It didn’t help his cause that my introductory literature to my clients includes multiple references to this quotation. Needless to say, his company didn’t get the gig.)
Remember Y2K? Were there concerns about accounting in your condominium? Did things go smoothly during the conversion to new accounting systems? Was the communication process to your satisfaction, while the problems were being sorted out, or not sorted out, as the case may be?

The Future

This’ll surprise you: I’m stating unequivocally that today’s management fees are too low. It’s difficult to find decent property managers who are willing to work nights, take heat from Boards and owner-residents, and be knowledgeable in eight or nine different areas ranging from finance to psychology to mechanical technology to legislation, for what the industry can currently pay them.

It’s management’s role to educate the Boards in this area. But the industry must do so from a position of strength. That is, they can’t pursue this pattern of not relating to the client, then go ask the client for more money. The industry must first show its mettle, not just with competence in, for instance, preventive maintenance. They must also demonstrate, beyond any doubt, that they truly understand what it’s like for a Board Member to answer to a neighbour on an elevator, at 6:30 p.m. on a rainy night, when Board Members are tired from a long tough day facing problems that they’re paid to face.

If this can be accomplished, I believe Board Members will be more receptive to hearing about the economic realities of the condominium management industry.

Notice I keep saying industry, not profession. Never mind governmental designations, and standardized exams: when the industry adopts the above quotation as a sincere credo, it’ll take the first giant step toward becoming a profession.
Alan Rosenberg is President of A. R. Consulting, which provides a variety of advisory services to Toronto-area condominium boards of directors. His long, rewarding career with a large condominium management company, most notably as Vice-President, included client liaison and counselling, legislative advice, financial reporting, creation of maintenance specifications, organizing building inspections, and editing of newsletters and other communications materials.

A. R. Consulting now assists condominiums in improving their own management situations. Alan’s comprehensive investigative and interviewing methods are renowned throughout the condo community.
E-mail: ar@condominiumconsulting.ca
Phone: 416-932-9510; Fax: 416-932-9769

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