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LOOK A LITTLE DEEPER!
By
Darlys Walker
Published June 8, 2016
The Miami Herald should do a complete
investigation story on all the ways that associations are being
ripped off by their management companies. As most of you know, my
firm manages throughout the southeast. In my professional opinion,
Florida by far, has laws to protect the condominium owners and not
so much for the homeowners. However, the one thing I see prevalent
in EVERY association that we take from another management company,
in Florida, is the amount of hidden fees and upcharges that the
boards are either unaware of, think its normal practice or just
don’t pay attention. Yes, there are companies, like us, who are
ethical and don’t try to gouge their clients. But beware, as we are
few and far between.
So what areas can you as board members pay close
attention to, ensuring you’re not being misled or ripped off? Here
are just a few:
Late fees payable to the management company
as opposed to the association
Excess transfer fees and move in/move out
fees payable to the management company.
Salaries added into the management fee as
opposed to broken out as a reimbursable at actual cost. **THIS
IS HUGE*** Standard practice- A management fee of $50,000 a
year, plus a CAM at $85,000 per year, plus taxes and benefits
for that CAM at $30,000 for a total monthly management fee of
$165,000 annually. But, the management company finds a manager
at $65,000 per year, which reduces taxes and benefits (at their
rate, which will be discussed next) at $23,400 combined results
in an annual savings of $26,600. Who do you think benefits from
these savings? The management company! Why? Because they build
in the cost of the staff they provide to the association, at a
set rate, and rolled it into the management fee!
Let’s talk about taxes and benefits. So most
Florida management firms add 32-36% to the total payroll, for
taxes and benefits. However, this amount is inflated with most
management companies. They are profiting anywhere from 5-10% off
of the association. You may not think this is much but look at
it this way. A community has a CAM at $75K, maintenance at$65K
and housekeeper at $30K. The total annual payroll is $170K,
taxes and benefits at 32%= $54,400 or taxes and benefits at 26%=
$44,200. A savings of $10,200 annually. Here is a little more
information, the average cost of healthcare to an employee
receiving free medical/dental/eye is approximately $495 per
employee, per month, with very low deductibles. 98% of the
management companies have the employee share the cost usually
$50-$75 per pay period. But the association is charged full
price, again who pockets the difference?
Have you
had this experience or do you have a good honest management company?
I would love to hear your thoughts.
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Darlys
Walker, Founder and CEO of Condominium Concepts
Management, Inc. (CCM), is recognized for her straight
talk, subject matter expertise, and valued insights
regarding real
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state
management, leasing, and HOAs. Her company serves a diverse
portfolio of properties, from 16-units up to 600 as well as
large mixed-use developments.
From its beginnings in 2000, CCM has become a well-respected
asset manager and now works with over 100 associations with
16,000 units served by over 300 employees. Darlys and her team
deliver resources and responsiveness through six regional
offices - in
Orlando, Miami, Jacksonville, Charleston,
Nashville
and Atlanta.
Darlys Walker is best known for her passion and precision,
understanding that the only difference that matters in today's
demanding marketplace is service delivery ... doing what is
promised and what is right. She knows that every community
serves two masters ... the property owner/developer and the
resident/homeowner. "If we are not equally responsive to
both, we are not doing our job," she states.
Her clients say it best: "Darlys really knows her
stuff" ... "at the top of her profession and it shows
in the caliber of her clients" ... "delivers quality
resources that match up well with needs and expectations that
are really rigorous."
She is a licensed Real Estate Broker in four states, holds an
Associate's Degree in Marketing and has earned the Accredited
Real Estate Manager designation from the Georgia Institute of
Real Estate Management. Also she is one of few certified as a
Lead-Based Paint Abatement & Removal Trainer in Georgia.
Darlys Walker and her team have been selected to manage the
condominium conversion process and day-to-day operations for
many of the Southeast's most high-profile condominium
communities including luxury high-rises, mid-rises and
garden-style homes. Most recently she has been recognized as an
expert in 're-versions' of communities from condominiums to
leased homes, as well as repositioning projects. A visionary and
a tireless perfectionist, Darlys demonstrates hands-on
leadership, working individually with each client and staff
associate to achieve defined business outcomes and satisfaction.
For more information about Darlys Walker and Condominium
Concepts Management, Inc. please visit www.condominiumconcepts.com.
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