Self-Management in Stressful Times Some Communities Go It Alone—Others Outsource

While many condominium associations and co-op corporations hire professional property managers or management firms to handle the routine (and not-so-routine) tasks involved in running a multifamily building or HOA, a significant number take the opposite route, eschewing formal management and running their properties themselves. While most of these self-managed communities tend to be on the smaller side, self-management can be successful at any size, from a handful of units to hundreds. 

Self-management involves numerous skills, however; everything from accounting to minor home repairs may need to be handled directly by the board, rather than being delegated by a manager or firm. Obviously, anyone with a plumbing problem can call a plumber; you don’t have to be a professional manager to intervene when a leak rears its head. But that said, the most successful self-managed properties are those that do have a range of practical skills distributed between owners, and a positive, community-oriented view from members. It’s a ‘pitch-in’ sort of atmosphere, and it’s not for everyone.

The arrival of COVID-19 has had major implications for all properties and their management, of course, but the pandemic-related restrictions on close personal contact has had a particularly personal effect on smaller, self-managed communities. CooperatorNews spoke with several self-managed community leaders to understand how the global health crisis has changed the way they live and how they manage themselves.

Why Self-Manage?

Even outside of crisis situations like the pandemic, it’s worth examining why some associations and corporations choose to manage themselves. Often, it’s a matter of cost. Management agents generally have a minimum monthly charge per building or per unit, and that charge can be more than the individual owners can handle. For the sake of argument, consider a building or association for which the minimum charge for management services is $500 per month. That’s $6,000 per year. In a 50-unit property, that would come to $10 per month per unit. In a 25-unit property, that would come to $20 per month per unit. In a five-unit property, the management fee turns into $100 per month per unit. That’s a big chunk of monthly common charges or maintenance, and it’s not tax deductible. This is likely why smaller communities opt to self-manage in many cases.

In addition to all that, another part of the appeal of managing oneself has less to do with money and more to do with community, regardless of size. “Most management companies would not be here on a full-time basis,” says Domenick  Lorelli, former president of the Sonata Bay Club, an active adult community in  Bayville, which has been managing itself since 1993. “There are two big benefits to self-managing: the first is that it’s cheaper, and the second is the accessibility and you know the people personally. A property manager is here only on a part-time basis. So you don’t have access to any answers or solutions to your questions or problems until they are on site. Whereas with self-management, the people live here, and they are on site every day of the week. They can be available to talk to, or if you have any problems you can come up here [to the office] and have them handled the right way.”  

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