Management Companies

We are a new association in the process of hiring a management company. Above their monthly contracted fees, we are noticing paragraphs in their sample contracts asking for the costs for postage, envelops, etc. While we don't have an issue with some of these could some of you weigh in on what these extra costs are amounting to in your associations. Is 50 dollars a month or 100 dollars every quarter a good number to budget. Or is it zero? Asking the management company is like..> "Would you like money or MONEY?" We are only 96 lots. Thanks...Lynn

LyndenG,
The reason for including extra costs in the management agreement is because these are variables which are not controlled by management company. All additional items not listed in the agreement which are not included in the basic monthly rate are covered under extra costs. The Board may decide to send out numerous mailings. Meanwhile, they could include the cost of XX number of mailings in the basic monthly rate.

Management company charges for mailings etc don't just include the cost of the paper, postage, envelope. There is also a human being who must be paid to run the copier or postage machine, and part of the markup on those fees goes toward the necessary admin staff.

We lived in an association with 237 homes. Postage, reproduction, envelopes, etc. could run $500-$3,000 a year or more, depending on how many compliance violations, architectural change requests not processed by e-mail, annual meeting notices of more than six sheets, assessment invoices, special assessment invoices, and associated documents were involved. Even more if there is a newsletter mailed and not available electronically. A single mailing, regular first class postage, with one regular envelope and one sheet of paper printed on one side cost about $300.00.

In Texas much of this can (now) be done by e-mail, but only if the property owner "opts-in".

I recommend you discuss with the management company the proposed mailing volumes. Do not forget to include clerical hours/dollars to put all this together, reproduction expenses, mileage to FedEx, board meeting documents, annual meeting documents, assessment invoices, notifications following annual meetings, and other reproduction expenses. And postage--the postage expenses really escalate if you exceed one ounce or have to use envelopes larger than regular #9 or #10 business envelopes.

A prospective management company should not be expected to eat any of these expenses.

Good advice on consider what must be sent out versus what might be nice but not necessary. Must means US Mail, Nice means Email even if all do not have.