Management fees vary widely by market, building size, and the services you need, so the most useful question is not "what is the going rate" but "what exactly am I paying for." Here is how to read and compare fee proposals.
How fees are usually structured
Most firms quote a base management fee, often expressed as a monthly amount for the association or a monthly amount per unit or home (sometimes called "per door"). The base fee covers the core services listed in the contract. Everything outside that list may be billed separately.
Some associations with on-site staff pay for those employees separately from the management fee. Ask how on-site staff costs are calculated and billed.
What the base fee should cover
Ask every firm to list, in writing, what is included. Common items:
- Monthly financial statements and bank reconciliations
- Collecting assessments and paying the association's bills
- Preparing a draft annual budget
- Attending a set number of board meetings each year
- Coordinating vendors and routine maintenance
- Handling resident requests and violation notices
Extra charges to ask about
These are often billed on top of the base fee. None of them are wrong, but you should know about them before you sign:
- Additional or after-hours meetings
- Resale and estoppel certificates, often paid by the selling owner
- Collection letters and late-fee processing
- Printing, postage, and mailing costs
- Coordinating large projects, insurance claims, or major repairs
- Move-in and move-out processing
- Setup or transition fees when you start with a new firm
How to compare proposals fairly
- Send the same scope to every firm. Otherwise the cheapest proposal is often just the one that left the most out.
- Build a simple table. Put the base fee and every extra charge side by side.
- Estimate a realistic year. Count how many meetings, projects, and resale certificates you usually have, and add up the total cost, not just the base fee.
- Ask about increases. How and when can the fee change during the contract?
- Read the termination terms. A low fee in a contract you cannot leave is not a bargain.
Questions for every proposal
- What exactly is included in the base fee?
- What is billed separately, and at what rates?
- How many associations will our manager handle?
- Can the fee change during the contract term?
- How much notice do we need to give to end the contract?
Have your association attorney review the final contract before the board votes.
Want proposals you can actually compare? Request proposals from the firms you pick, using one description of your building.