Frequently Asked Questions
How do I prevent problems with my management agent?
Property management problems are legendary, from incompetence to outright fraud. Though Delkap certainly hopes you'll give us an opportunity to show you how well we can manage your property, we've excerpted these guidelines from Habitat Magazine.
Accountants, property managers and board members have come up with a checklist all co-op and condo board should follow to make sure that their funds are being handled properly.
When offering a contract to a management company, expressly forbid commingling of your building's funds with funds from other buildings.
Compare your management company's monthly financial report with the prior month's report and with the report from the same month a year ago. Be on the lookout for abnormal fluctuations.
Make sure your management company provides the monthly bank statement and bank reconciliation, including your building's name, along with the monthly financial report. Make sure they jibe. Examine cancelled checks and copies of paid bills. And make sure you get a statement for every one of your accounts -not only checking, but escrow, reserve fund, money market, investments, and any others.
Insist on seeing a maintenance roll, including maintenance charged per apartment, other charges, maintenance collected per apartment, and other income collected. Make note of any arrears, and make sure the managing agent is taking appropriate collection action.
Designate a director as co-signatory on checks with the managing agent. Do not allow the managing agent access to the reserve fund, and limit the amount the managing agent can spend without a second signature on the check. $5,000 is a common cap. Have your accountant review your accounts at least annually.
Make sure the management company is bonded for at least the amount your building has in all of its accounts. Make sure you carry an up-to-date and adequate fidelity bond, a type of insurance also known as a "crime policy" or "employee dishonesty policy." That way you're protected in the event your safe-guards fail to prevent the management company from stealing money.