Mgmt Co. fee's

Nancy:
Hope this is a misprint: (quote) "Mgmt Co holds twelve meetings a year." (one each month)

Where is your Board of Directors????????????????? Our board holds, and controls all meetings of the community.
I would prefer at times for the MC representative not to even attend our board meetings because it makes the meetings more congenial. But, in your case for them to hold the meetings, (your words) I probably would not attend.
Not very generous of them to tour your community, so few times.
For a community so large you don't pay much for services.
Our community (not much on benefits)is much smaller and pays twice as much to our MC.

Jim

James: Perhaps I was not too clear. The Mgmt Co. hosts the board meetings. All five of our BOD are expected to be present. They have to hold the meetings at a seperate public place, as the Mgmt Co. does not have room at their offices. This is an extra cost for us. We are all single family homes, so the Mgmt Co is a hired contractor. Before we moved to our new Mgmt Co, our Mgmt Co charges were 4,000 a month plus extras. Are you a Condo complex? If you are I would think Mgmt costs would be more, as they would have so much more for them to take care of. In our case each owner takes care of any painting, Insurance, etc. on their own homes.

NancyM2

Nancy;
We are private homes. Our board of nine directors are in complete charge of the community affairs. We can hire and fire any MC if they are not carrying out thier functions as specified in their contract. They are contracted to provide a service to your community, "NOT CONTROL IT". Our MC attends our board meetings just long enough to give the financial reports, answer any questions concerning violations of our rules/regulations and are welcome to leave. Your Board of Directors "MUST" be in complete charge at ALL times.

Jim

Melissa: we are single family homes.
Nancy

Nancy

We have a 500 single home community with a Clubhouse and an indoor pool. Our Builder/Developer hired a Management Company to do essentially the same functions you describe above. We only have six Board meeting per year but our assigned Property Manager (PM) was also expected to attend a dozen or so committee meetings. We spent about $70K per year for these services and extras such as postage and copying. Our assigned PM was not dedicated and was budgeted for only 11 hours per week. We were not happy with the services.

As our Builder/developer started to move out and residents took over our Transition Committee studied management options and came to the conclusion that we would receive best value from a dedicated, full-time, on-site, General Manager. We on the Board accepted the recommendation and appointed another Committee to implement it. We hired a GM last September and we think it was the best move we could have made.

We retained the Management Company for payroll and financial services including assessment collection at a cost of $30,600/year. The GM's salary and benefits are just over $50,000/year. Administrative support has been handled by already existing clubhouse staff.

I'll refrain from providing the long list of cost savings and performance improvements that we have realized since our GM came on board but they are substantial.

It does appear that your Management Company costs are on the high side but I should point out that we reside in a rural area where costs are generally lower.

DavidS

Nancy,

Wow, $ 120,000 plus extras per year to manage a 575 SFR association with no amenities? Heck, I live in Orange County and I'd manage it for you full time at that price!

It sounds like the biggest amount of work for the PM is the billing and record keeping of the the 575 members. If your dues aren't too high and you bill every month, maybe switch them to every three months to cut down on the amount of paperwork and time needed. That alone could save you a lot of money in management fees.

Nancy

PatrickH said it correctly. Wow!

If I understand correctly you have no amenities (clubhouse, pool, etc) and your only major expense is common grounds maintenance. Do you also maintain the residents property? To oversee this service, collect assessments, handle complaints, drive around the property a couple of times a month, set-up a dozen meetings and take care of legal issues which now amount to two lawsuits you now pay:

Management Company Fee: $120,000
Management Company Extras: $ 12,000
In-house Attorney: $160,000
Omsbudsman/GM: $ 82,000

Total $374,000 or $787/resident/year.

By comparison, with a $1,082,000 budget, over 20 contractors providing various maintenance services, coordination with a larger association of which we are a part and County oficials, almost daily inspections of the property, and scheduling of a wide range of resident activities and events our costs are roughly:

Management Company Fee: $ 30,600
GM Compensation: $ 52,000
Life Style Director: $ 46,000
General Handyman (part-time) $ 20,000
Other part time admin staff $ 20,000
Legal $ 2,400
Independent Auditor $ 5,000

Total $175,400 or $348/resident/year

At the risk of being criticized for jumping to conclusions Nancy, I believe that your Management Company are seriously ripping you off and others on your Board are cooperating.

Dave

Dave ~ Where do you live, and are their any houses for sale there ? I'm moving to your area. Better yet ~ do you have any board members that can be transplanted to our area. even though we have a lousey board some of our homes have Ocean view's (any board takers)

Nanc

P.S. These people will continue to get rich, and get by with what has been going on until they raise the dues. That won't be to far away as I have been watching the financial's and their spending it pretty darn fast. Right now our dues are $150.00 a month.

Intersting thread! We hired an MC a couple of years ago and their fees have gone up and up. Our dues were originally $150 per year and now they are up to $400. Our annual budget is upwards of $50,000 for a community of 187 homes. We have no ameneties other than a pool. The landscaping ranges from terible to non-existent. I have been trying to find a way to get rid of the MC but not all of the Board members are in agreement. Has anyone else gotten rid of their MC and what were the benefits/detriments of doing so?

I too have some concerns regarding the issues of fees and payroll. I live in an HOA with 3370 lots. We have some ammenities and pool usage from May 25 thru Sept 4. Overall, the facilities is utilized by about 250 per week (pool use not included) with the majority of this usage at Friday night's Happy Hour. So with all this passive activity by members and no real services being provided, the payroll averages close to 70% of the gross operating income. Is this normal? Do other HOA's also spend 70% of their annual association dues to pay for employees to collect the money, and to tend bar on Friday nites? Ok---so I am being a bit sarcastic and maybe the employees do a bit more---but still---is it typical to have close to 70% of Operating Income be spent on payroll?

I sure would appreciate your comments on the subject.