Condo Association Management Blog

You cost shall be largely determined by the services you require the management company to supply. A way to get started is to inviyer several licensed management companies to brief you on their services. These briefings will aquaint you with the range of services available to you. Next step would be to issue a request for proposal to management companies. 
 
I would further suggest you download a copy of the New Jersy Condominium Act. You may find you are not in compliance with portions of that law. For examplete can be only one annual meeting. The main purpose of the annual meeting is to elect the members of the board of directors. How do yoyu adopt a yearly budget which is a;lso a requirement in your state law. Do you have any bylaws??

Not more than 12% of your gross revenues (exclusive of special assessments). That should include payroll taxes and benefits.  
 
 
 
Mark

Our condo is in downtown St. Paul, MN. We have 119 units on seven floors. Our contractor manager costs us $81,000 per year.

We pay approximately 24K/year for 120 units. We have extensive grounds and ourunits are over 30 years old requiring a great deal of work. Our management co does a great job! (we are in IL)

Jay - After reading Sue's comment I think you should look for another quote...when my condo was looking for quotes for our association most companies came back with between 40-50 per unit per month. This would still be 2.5 times higher than Sue's management co.

I am Minnesota. Are there any state laws relative to condo budgeting in my state?

Our Mgmt company is charging (on average) ~$100/month/unit (we have studios, 1-3 BR units, so some are paying almost twice that). It is 28% of our operating budget. They take care of just about everything and we have a clubhouse, etc. Is this excessive to anyone else? They are trying to raise rates again.

Is it excessive?? You'll never know unless you get sevral other bids. The Management contact should be competeed at least every two years,. Not to do so could be a breach of the boards fiduciary responsibilities.

There are two ways to figure out condo management costs: 
(1)By comparing with other condo of similar number of units and similar common facilities to see if there is a prevalent price. For example, condo with 115-120 units cost about $50 per unit per month or less (Such as the one owned by subscriber Ms.Sue which is possible if there is absolutely no hidden profits and no plan of saving for the Reserve fund for repair and replacement of major common facilities and buildings' painting). Always make sure whether the monthly fees includes cable t.v. subscription service or having a large lawn area or virtual private park, which can cost additional sum per month per unit.  
CAUTION: Comparing different association's condo fees often overlook internal difficulties in different condo association that are not included in comparing condo fees cost.  
One can notice that there are warning signs of bilking and cheating of condo fees. Signs of excessive condo fees are employment of contractors for unnecessary repairs and nonexistent jobs being billed, and total lack of homeowners' participation in board meetings or absence of monthly or regular board meeting. 
(2) The second method of figuring condo fee's reasonableness is to accumulate past 12 months' financial monthly report. This method should be the only method to assess condo fees, as well as to assess "inquiry resistance" of your condo board.(The board can suddenly become unfriendly or become all-promise but no carrying-out of promises when you inquire into the financial situation of the association, instead of inquire about repairs needs for which the board welcome such business of contracting) You or you or a couple homeowners write notice or letter to the board, requiring the board to produced 12 months' bank checking account of the association to match with the 12 months' or one year's board financial report.  
Then find a bookkeeper or accountant to group the expenses or classify those expenses (Can use the CCR's Initial Budget as a classification guide), to determine what should be the monthly condo fees. 
 
Please note that in California, a Civil Code provision prohibits "Excessive assessments of homeowners fees" 
 
Does anyone have question regarding above?