In: mark levine
February 2, 2016
Should We Collect A Move In Deposit, Fee Or Both?
Buildings suffer through a lot of wear and tear during move-ins and move-outs. For each move, there are always two sets of people who are coming and going and elevators, common spaces and the building staff are all taxed during this time. In addition, residents are sometimes disturbed as their elevators are either taken out completely or are under limited use while the movers reserve and utilize them during this time period. It’s for this reason that many buildings charge something in order to offset the costs that they are absorbing. These charges can be by way of a deposit, fee or both. Depending on your building, it may be prudent to charge both to protect the asset under your care.
Flip Taxes are a tool in Cooperative buildings all throughout New York City. Essentially, they’re a tax (or a fee) that the Cooperative collects at the closing of an apartment that is transferring hands between outgoing and incoming Shareholders.
If your building still operates with a boiler that runs on oil, or if you have an active storage tank that holds oil, the NYS Department of Environmental Conservation requires that your building keep an active permit, which is due for renewal every five years, for each and every active tank. The Bulk Storage Certificate is required for any size tank and depending on the size of your specific tank, there will be varying filing fees.
Property management, particularly in the New York City metro area, is a highly specialized field that handles tremendous, valuable assets. The barrier to entry into our field is pretty low, with a number of fly-by-night companies and inexperienced managers / companies in the field. They’re able to take on clients due to their cheaper pricing, which in many cases is the sole litmus test used by property owners and boards for their management hires. This begs to raise the question; should property managers and management companies be licensed in the State of New York or should it stay as it is; with no major restrictions or hurdles to jump over?
If you look to the state of Florida, real estate management companies are required to be Licensed Community Association Management firms and individual managers are required to possess the Community Association Manager license as well. Both of these licenses are obtained by passing background checks with the Federal Government, taking specialized courses, passing course tests, passing state level tests and then attending continuing education every two years. Once these tests are passed a license is issued through the Florida Department of Business and Professional Regulation and then the licensees and the firms are held accountable for their actions and also held liable for any violations of the state-level regulations. Rules are changing constantly and it is up to the licensee to ensure that they are following the law as it is written. No such laws or oversight exist in New York State.
In New York State, and a reason why so many real estate brokers turn to management in a downturn, a property management firm must be a Licensed Real Estate broker in order to collect rent (or maintenance / common charges) on behalf of the owner. Many companies do not know this law as it is not widely known and as a result do not maintain an active broker’s license for the firm. Other than that provision, there is no obligation by the management company to follow any statutes of law that relate specifically to the management of properties and the fiduciary responsibilities of a managing agent to the owner of the property. Of course all laws have to be followed with regards to the maintenance of a property and each property should be run efficiently in a law-abiding way, but there is no oversight at this time from the state to make sure that those who are running these properties themselves are both with a clean record and properly trained for the position.
Could the various buildings owners and boards in the area benefit from a systematic overhaul of the current system that would ensure that all of the employees managing their accounts be licensed and up-to-date with all current regulations and responsibilities? I think so. It would take a lot of work on both the state end and also with each individual property management company, but in the end it could benefit those who need it the most; the property owners who rely on us, as professionals, to maintain and properly manage their valuable assets.
– Mark Levine, RAM, CAM
In Property Management there are two types of property managers; the dedicated (full-time, on-site manager) and a portfolio manager. While many of the duties of either type of manager will be similar, there are some stark contrasts between the two.
A dedicated manager is a property manager that is responsible for only one client. Oftentimes, particularly if the property is large enough, the property manager will be on-site to deal with residents, staff and board issues as they pop up. The building, in turn is absorbing the complete cost of the salary + benefits of all management staff members that are assigned to their building full-time. This could include bookkeeping staff, assistant property managers and property managers. The management company, separately, will usually be handling the back-office or financial needs from their home base. A benefit of a dedicated property manager is that the manager assigned to the building will have a laser focus on the building and will not be involved in other issues throughout the portfolio of the management company.
A portfolio manager is exactly what it sounds like. Handling a portfolio of buildings, they could range in number from 2 to 8 properties, depending on the size and time requirements of the buildings that they are managing. Some managers may manage a very large building and then a small or medium-sized building whereas another may manage 8 smaller buildings. It really comes down to the expectation of time spent on each property.
In interviews, we’ll often be asked how many buildings the manager that is up for the particular job is currently handling. It’s a delicate balance when managing a portfolio of properties. Clients who retain a property manager that is working on a portfolio are typically not paying for a full-time property manager so this manager will be responsible for dealing with multiple buildings and boards at the same time.
Either way that a building should retain a property management companies services, they’ll always receive the same amount of attention and care from our staff and back-office and will receive the same financial and oversight services. Either way, it’s a win-win.