MC & bids

Started by JC3 • 4 replies • 1240 views

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JC3
Posts: 290

Posted:

How does a management company determine what to bid?
One interviewee asked for the amount of the budget and what we pay our present mc so that he would know what to bid: he would not bid too high for us, and not too low.
Are those reasons appropriate? Doesn't he have an idea of what he charges per house depending on the type of community--upscale, condo, types of ameneties or not, etc? Does he really need that information before the bid? Wouldn't that be a point of negotiation?

RogerB (Colorado)
Posts: 5,067

Posted:

JC3, the total dollars of budget can be provided if the Board want to provide it, but it is not necessary. The amount paid another MC should never be provided.

A management company considers 3 factors:
1) Overhead costs of their company;
2) Profit margin desired by the management company; and
3) The time involved in performing the duties wanted by the HOA.
The time involved will consist of some knowns and some unknowns. Key knowns are number of units, amount of common area and amenities, accounting time which will depend on frequency of assessments, number of meetings, number of inspections per month, and amount of work involved with contractors. The knowns are bid on a monthly basis. The unknowns which may occur from time to time are bid on an hourly basis and may include items such as time involved with attorneys and insurance.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

JC3: Roger is correct, he won't steer you wrong.
IMO, it is unprofessional for a mgmt. company to request what you 'were paying' the other company. They should have a 'per unit' price to charge you based on their responsibilities; but, if they want your business, be flexible for negotiation.

You have all the right questions to ask them; be careful in other instances of any unprofessionalism which may be shown. Your gut did speak to you here and you were right to question it.

ShawnaF (Colorado)
Posts: 84

Posted:

Not cool!!! I'd avoid that MC, they're already avoiding doing work. Put together a nice RFP which includes info about your community and what services you would like - review management company websites to see what they offer and compare/add/adjust your RFP to cover the services you need. Don't be ridiculously specific or unrealistic, let THEM be the experts and tell you the best way to do things and work with them for ideas after you've selected.

SidneyP (Florida)
Posts: 302

Posted:

I was wondering the same thing...We are 77 Townhouse units. We have a budget of $62,986.) $818. per unit a year)..We have never had full compliance in paying assessment fees, anywhere from 6 to 22>(which we have now) delinquencies. The three years the HO's have been in charge of the association we have run out of money before dues were due again. The Board (which I found out by requesting the financials) has taken from the Reserves to pay bills and also used money from dues that has come end early for the coming year to pay last years bills.....With the Board of course knowing this, they, for the 3rd time in two years was suppose to be taking bids once again for a new MC.....We were told at a meeting that they had hired a new company w/o bids because they said no other MC answered except this one (this MC also owens a unit in the sub-division....This MC's basic fee was $300. dollars more than the other two we had before.

This MC charges:
basic service......................................$850.
added telephone......... ...........................20.
PO Box
mileage-bank, post office, visits to property
additional accounting fees
additional office fees
meeting fees........................................125.
plus a misc.????

We have no amenities, a very small park, a small lake. Our expenses are, lawn service, Lake Doctor, electric...these are our bills other than the MC.

My question to the PM was; Why would you take our HOA since you knew we couldn't afford your company? Surely you knew these facts before you excepted to take our Association. I received no answer, except, your President signed the contract. The only thing I can think of is that they also have a 3 year contract and if we want to cancel, the association must pay them 3 months fees. They can't lose but our small HOA can and will. Of course the same question was ask of the Board...Why would they put the HO's in a situation which will surely bring the HO's a "Special Assessment" this year.

Is this a fair fee for what little they have to do for us? I don't think so.

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